What Does Insurance Regulation Mean?
Insurance regulation refers to the government overseeing the insurance market to ensure fairness and professionalism among those working for the insurance industry, to prevent the market from collapsing, and to democratize insurance. Laws are created for the industry and an agency is put up to make sure these laws are observed.
Insuranceopedia Explains Insurance Regulation
In the United States, the state governments regulate the insurance companies. It provides the license for a company to operate and for a person to work for insurance in a professional manner. It also settles disputes and grievances, whether by the insured or the insurer based on its insurance laws. However, the federal government has often intruded, passed laws, and set up minimum standards for every insurance company to follow no matter in which state it is located. This is because of the number of bankruptcies in the past that the states were unable to prevent.