Who is primarily responsible for the regulation of insurance companies?

The regulation of insurance companies is primarily the responsibility of state departments of insurance. Each state has its own regulatory body to oversee the insurance market within its jurisdiction. This includes the authority to grant licenses to insurers, monitor their financial health, enforce compliance with statutory and regulatory requirements, and protect the interests of policyholders.

State regulation allows for localized oversight that can reflect the specific needs and circumstances of each state's insurance market. This decentralized system is a long-standing approach in the United States, with regulations varying from state to state to accommodate local laws and consumer protections.

While the federal government does play a role in certain aspects of insurance regulation—primarily through legislation that impacts specific lines of insurance, such as health insurance—insurance as a whole is regulated at the state level. Insurance brokers and agents, while important for facilitating transactions and connecting policyholders with insurers, do not carry regulatory responsibilities. Their focus is on selling insurance and serving as intermediaries, rather than overseeing the regulatory compliance of insurance companies.