When you research insurance companies, you may occasionally see a reference to the NAIC and wonder how that affects your coverage decisions. The NAIC can help you know what you should be able to get from your insurance provider.
NAIC stands for National Association of Insurance Commissioners. The organization oversees insurance regulation across the United States.
What is the NAIC?
Created in 1871, the NAIC’s role is to standardize insurance agencies and their practices in the United States. Although some people have debated whether the insurance industry should be federally controlled, everything has been regulated at the state level for over half a century thanks to the NAIC.
The NAIC is composed of insurance commissioners from each state and the American territories of Guam, American Samoa, Puerto Rico, the Virgin Islands and the Northern Mariana Islands. An insurance commissioner’s duties include:
- Providing educational resources to consumers in their state
- Answering questions about insurance products and policies
- Handling complaints towards insurance companies
- Advising the public on their rights in regards to their coverage plans
- Regulating insurance companies
- Ensuring that laws are properly followed by all insurance companies operating within the state
An insurance commissioner operates similarly to how a principal in a school does. By standardizing and overseeing the teachers (or in this case insurance companies), he or she makes sure that every student (or consumer) receives the same treatment.
Broadly, the NAIC’s role is the same as an individual insurance commissioner’s but at the national level. Because it includes all insurance commissioners of every state in one organized entity, it is able to better oversee the entire insurance industry. This ensures that all consumers are given the same fair treatment and that insurance companies do what they say they are going to do should a covered event occur for a consumer.
Why does the NAIC matter?
The NAIC’s role is to protect consumers—and, likewise, to help each state’s insurance commissioner protect consumers. It keeps a detailed report of every legitimate complaint lobbied against an insurance company so consumers can better decide if they want to give a company their business. Furthermore, if consumers have a complaint themselves, they can also formally submit one online.
On the NAIC website, consumers can read detailed, easy-to-understand information about every type of insurance, the NAIC guidelines for laws it thinks each state should adopt and submit complaints about their insurance company. Consumers can receive answers to their questions about things like liability limits, coverage types and discounts.
The NAIC also offers professional education. If you are a state insurance regulator or industry professional, you can receive formal training and education through the NAIC. Much like a university, to obtain a professional degree or certificate with the NAIC takes, at minimum, three years to complete.
Every state has an insurance bureau website. The NAIC is basically the national version even though it doesn’t have any federal powers.
How does the NAIC work?
The NAIC assigns a 5-digit code to every insurance company authorized to do business in the United States. If it’s a large company, such as Geico, it can have many NAIC codes for every affiliated company operating under Geico. Because insurance companies offer many types of products (homeowners insurance, auto insurance, life insurance, etc.), each policy type is treated as a unique company in NAIC’s eyes.
NAIC codes make it easy for consumers to look up complaints about a company and submit complaints themselves. NAIC numbers also help consumers look up where a company is strong (for example, auto insurance), and where it might need some work (for example, homeowners insurance).
What does the NAIC do with customer complaints?
The NAIC records each complaint into a database for each individual insurance company. The NAIC then generates a score for each company which is based on the number of complaints it has received. This score is meant to show what percentage of customers have made a complaint against a particular company. Therefore, the higher the percentage, the less customer-friendly the company is said to be.
Frequently asked questions
Where do I file a complaint with 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 fraudulent activities to your state’s commissioner
- File a complaint
- Read about the most common complaints
- Learn about other complaints filed against a company
How do I find an NAIC number?
Your insurance provider’s NAIC number should be on your insurance card. The number may not have NAIC printed near it. If not, look for a five-digit number. The five-digit number should be the NAIC number. This number will also be on your insurance declaration page.
You should also be able to easily find the number online. Type your insurance provider, followed by the type of policy you have with the provider, followed by NAIC number.
Lastly, the NAIC publishes each number on its website, so you can enter your company’s name in the search bar.
Why would I need my insurance provider’s NAIC number at the DMV?
It’ is possible you’ll need your insurance provider’s NAIC number when filing a report with the DMV or even when filing a claim with your provider.
Is the NAIC in all fifty states?
Yes, the NAIC states include all fifty states plus each U.S. territory. It ultimately serves U.S. citizens, so if you live in the United States or one of its territories, you can take advantage of NAIC’s services.