You may see the NAIC referenced when researching insurance companies. This can make you wonder about how it affects your coverage decisions. The NAIC will help you understand what you should expect from your insurance company.
NAIC stands for National Association of Insurance Commissioners. This organization is responsible for overseeing insurance regulation in the United States.
What is the NAIC?
The NAIC was established in 1871. Its purpose is to standardize the practices of insurance agencies in the United States. While some have questioned whether insurance should be regulated federally, the NAIC has ensured that everything is regulated at the state level for more than 50 years.
The NAIC is made up of insurance commissioners from all 50 states and the American territories Guam, American Samoa and Puerto Rico. The duties of an insurance commissioner include:
- Provide educational resources to state residents
- Answering questions regarding insurance policies and products
- Resolving complaints about insurance companies
- Information to the public about their rights regarding their coverage plans
- Insurance companies that are subject to regulation
- All insurance companies that operate within the state must comply with all applicable laws
A school principal would have a principal as an insurance commissioner. He or she ensures that all students (or consumers) are treated the same way by standardizing and supervising teachers (or in this instance, insurance companies).
The NAIC’s role at the national level is broadly the same as that of an individual insurance commissioner. It is able better supervise the whole insurance industry because it includes all state insurance commissioners in one organization. This ensures that all customers are treated fairly and that the insurance companies will do their best to help consumers in case of a covered event.
What is the significance of the NAIC?
The NAIC’s role in protecting consumers is to also help the state’s insurance commissioner protect them. The NAIC keeps a detailed record of all legitimate complaints against insurance companies so that consumers can make an informed decision about whether they would like to continue doing business with them. Consumers can also submit a formal complaint online if they have one.
Consumers can find detailed information on every type of insurance and the NAIC guidelines that each state should follow. They also have the ability to complain about their insurance company. You can get answers to your questions about coverage types, liability limits and discounts.
The NAIC also offers professional training. The NAIC offers formal education and training for state insurance regulators or professionals in the industry. The minimum time required to earn a certificate or professional degree from the NAIC is three years.
Each state has its own insurance bureau website. Although it does not have federal powers, the NAIC is essentially the national version.
What is the NAIC’s working principle?
Every insurance company that is authorized to do business in the United States receives a 5-digit NAIC code. It can have multiple NAIC codes for each affiliated company under Geico if it is a large company like Geico. Insurance companies offer many products, including homeowners insurance, auto and life insurance. Each policy type is considered a distinct company by NAIC.
Consumers can easily find complaints about companies and file complaints by using the NAIC codes. Consumers can also use NAIC numbers to find out where a company’s strengths are (for instance, auto insurance) and where they might need work (for instance, homeowners insurance).
What is the NAIC’s response to customer complaints?
Each complaint is recorded by the NAIC into a database that will be used to identify each insurance company. Based on the number and severity of each complaint, the NAIC generates a score. This score shows how many customers have complained about a company. The lower the percentage, the more customer-friendly the company will be.
Questions frequently asked
Where can I file a complaint to the NAIC?
To file a complaint about your insurance provider, you can do so at the NAIC’s Consumer Resources page. Here you can:
- Report fraud to your state’s commissar
- File a complaint
- Learn about the most common complaints
- Find out about other complaints against companies
How can I locate an NAIC number
The NAIC number of your insurance provider should be printed on your insurance card. You may not see NAIC printed next to the number. Look for a five-digit number if it doesn’t. The NAIC number should be the five-digit number. This number will also be on your insurance declaration page.
The number should be easy to find online. Enter your insurance provider followed by the type and number of policies you have with them.
The NAIC also publishes every number on its website. You can search for your company name by using the search bar.
Why would I need my NAIC number from my insurance company at the DMV
You may need the NAIC number of your insurance provider to file a DMV report or to file a claim with your provider.
Is there a NAIC in all 50 states?
Yes, all 50 states and each U.S. territory are included in the NAIC states. The NAIC serves U.S. citizens. If you are a citizen of the United States, or one of its territories you can use their services.
