Is insurance a state-run industry?

Insurance in the United States operates primarily as a state-regulated industry. Each state has its own insurance regulations and regulatory bodies that oversee the insurance market within their jurisdiction. This state-level regulation allows for the customization of insurance laws to reflect the specific needs and characteristics of the local population and businesses.

The existence of state-specific regulations means that insurance companies must comply with a unique set of requirements in each state where they operate, such as licensing, rates, solvency measures, and consumer protections. This decentralized approach ensures that insurance is tailored to local market conditions and consumer needs.

While there are federal regulations that affect certain aspects of the insurance industry—such as the Employee Retirement Income Security Act (ERISA) and the Health Insurance Portability and Accountability Act (HIPAA)—the core of insurance regulation remains within the purview of state governments. This is what makes the statement that insurance regulations are state-specific true and correct.