Who bears the cost of examinations conducted on insurance companies?

The cost of examinations conducted on insurance companies is borne by the insurance companies themselves. This practice is rooted in regulatory requirements where state insurance departments periodically review the financial health and compliance of insurers. The rationale behind this is that insurance companies must ensure their operations adhere to state regulations, and since these examinations are essential for maintaining solvency and protecting policyholders, it is appropriate for the insurers to finance these assessments.

Additionally, by having the insurance companies cover the costs, it helps avoid any potential conflicts of interest that could arise if the state or clients were to bear these costs. This ensures that the insurance companies are fully accountable for their operations and compliance, reinforcing the integrity of the insurance market as a whole.