1.12.1 National Association of Insurance Commissioners (NAIC)
Even though the National Association of Insurance Commissioners (NAIC) has no legal power of its own per se, the organization adheres to these main objectives:
- to encourage uniformity in state insurance laws and regulations;
- to assist in the administration of those laws and regulations by promoting efficiency;
- to protect the interests of policyowners and consumers; and
- to preserve state regulation of the insurance business.
The NAIC identified and addressed a main problem pertaining to advertising insurance products. They found that the usage of certain words may be misleading to consumers as well as deceitful inferences within the advertising medium. In an attempt to assist states in regulating misleading insurance advertising and direct mail solicitations, the NAIC developed an "Advertising Code" that most states follow. The Code provides certain guidelines and model legislation to help ensure the insurance industry maintains a high level of public trust.
Under the NAIC Uniform Trade Practices Act, the Department's CFO (the Chief Financial Officer of the Department of Financial Services) has the power to investigate insurance companies and producers, to issue cease and desist orders, and to impose penalties upon violators.
