What Does Regulator Mean?
A regulator is a term referring to a person or a group who supervises the activities of a certain industry. In insurance, a regulator ensures that the laws, directives, rules, and regulations concerning the insurance industry are followed. Commonly, regulators are state insurance departments directed and authorized by statutory law.
Insuranceopedia Explains Regulator
Insurance regulators oversee the insurance industry in a certain state. They check business practices, investigate cases, carry out penalties, and provide (and even revoke) licenses. The fundamental purpose of an insurance regulator is to protect both insurers and the insured. Industry laws are particular about maintaining the solvency of an insurance company because once a company suffers a financial failure, it risks the ability to cover its policyholders.
Although regulators are governed by statutory laws as ratified by state legislatures, administrative adjudication, court decisions, and federal law also plays a crucial role in their activities.