Insurance is governed by states in the US. The Supreme Court of US long recognized the importance of having an organized law for insurance companies mainly to deal with 2 facets of insurance companies; these are regulation of claim handling and regulation of the business of insurance. Consumers invest their saving in insurance companies but the performance of the insurance companies depends on its future obligations. The interests protected are so important such as an individual’s ability to pay for death or damage, accidents, to replace destroyed properties etc. Another reason for the regulation is the complex structure and the insured’s inability to assess the company’s future. So the laws relating to insurance tries to eradicate the problems. Regulations ensure solvency, insurer’s ability to pay and other standardized practices. Another regulation that applies to the insurance companies is to prevent

destructive competition among the companies seen during price fixing. If any insolvency occurs the company fails to pay its obligation and the customer’s interest is hampered.

The laws relating to Insurance companies are fair pricing, protecting the consumer’s interest, preventing unfair practices, and most important is to ensuring the availability of insurance coverage.

The National Association of Insurance Commissioners (NAIC) is the organisation of insurance regulators of the 50 states, the district of Columbia, and the five U.S. territories. The NAIC provides a platform for forming uniform policy. The primary responsibility of any State Regulator is to protect the interest of the Insurance Consumer and NAIC helps fulfilling them. NAIC research and analyze the insurance laws provides advice to state insurance regulator, and serves as in-house counsel to the associations.

Despite the persistence of state regulatory authority The National Association of Insurance Commissioners (NAIC) has been playing a major role in centralizing the control. The objective of the body is to serve the public by assisting the State Insurance Supervisory Officials, individually and collectively. In achieving objectives like maintenance and improvement of state regulation of insurance in a responsive manner, ensuring reliability of insurance companies to guarantee against loss, fair and equitable treatment of policyholders and claimants.