Who is NAIC (National Association of Insurance Commissioners)?

The National Association of Insurance Commissioners (NAIC) is an insurance regulatory body that is represented nation-wide. It is an organization with no power, but considerable influence among insurers and insurance agents, which was established in order to provide uniform national regulation in the field of insurance.

NAIC Mission

In order to learn more about the National Association of Insurance Commissioners, here is a list of their objectives, as described by the association itself on its website:

• Protect the public interest;
• Promote competitive markets;
• Facilitate the fair and equitable treatment of insurance consumers;
• Promote the reliability, solvency and financial solidity of insurance institutions; and
• Support and improve state regulation of insurance.

The existence of the National Association of Insurance Commissioners is a relief for the customers who can now feel safer about buying insurance since NAIC has prohibited certain deceptive practices done by agents in the past, and is closely monitoring the activities of insurance companies.

One of the major regulations NAIC has drafted and introduced, is the Policy Illustration Model Regulation which requires insurers to present certain data to the potential policy owners, in the form of policy illustration.

Every policy illustration consists of a narrative summary and a numeric summary both of which help illustrate clearly and graphically the basic characteristics of the policy.

The narrative summary provides information about the underwriting class, death benefit option, riders and premium payment plan. It also contains certain non-guaranteed elements that are subject to change, such as interest-adjusted cost information, federal tax guidelines, and key definitions. The numeric summary shows the value of the accumulation account, cash-surrender values, the premium expenses, the death benefit, and the number of years for which the coverage will be in force. It is important that both the applicant and the agent sign the illustration.

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