Who Regulates Insurance Underwriting?

When you purchase an insurance policy, an underwriter reviews your application for acceptability and rating. You may wonder: Who ensures that underwriters are acting ethically and fairly?

State Regulatory Agencies

Insurance is primarily regulated on a state level. Each state has an insurance department that oversees the actions and practices of insurance underwriters.

Acceptability

State insurance laws and regulations determine how underwriters can evaluate, accept and decline risks. Although insurance companies and underwriters have some latitude, they must adhere to insurance department mandates.

Discrimination

Each state insurance department sets discrimination standards that underwriters must follow when evaluating applications. Although many discrimination guidelines are set on a federal level, the states must enforce the guidelines.

Complaints

Complaints about underwriting practices can be submitted to your state's insurance department. The insurance department investigates complaints for potentially unethical practices.

Company Guidelines

While regulatory power ultimately rests in the hands of the state insurance departments, these regulatory agencies rely on insurance companies to establish and maintain underwriting guidelines. In many cases, insurers must file copies of these guidelines for insurance department approval.

References

• Homeowners Insurance Center: Who Regulates the Insurance Industry?