What GAO Found The National Association of Insurance Commissioners (NAIC) supports its members—state insurance regulators—in their regulation of insurance companies by providing a forum (such as committees, task forces, and working groups) to develop standards for insurance companies through model laws that states may consider enacting (see figure); facilitating standardization in monitoring the financial solvency of insurance companies across states through its accreditation program; and managing centralized data systems to help states carry out oversight and share information. NAIC’s Process for Developing Model Laws Since 1955, NAIC has been excepted from filing Form 990, a type of annual information return that tax-exempt organizations file with the Internal Revenue Service (IRS) unless an exception applies. According to NAIC documents, IRS granted the exception after determining that NAIC meets the exception as a wholly-owned instrumentality of the states, specifically as an organization that carries out functions on behalf of state governments. IRS reaffirmed this exception in 1999 when NAIC reorganized, became a corporation, and reapplied for federal tax-exempt status and a Form 990 filing exception, according to NAIC documentation. GAO’s review of publicly available NAIC documents found that they included governance and financial information generally comparable to that in Form 990. For…
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National Association of Insurance Commissioners: Role with State Insurance Regulators and IRS Reporting Requirements
Source: US GAO Reports — US Government, Public Domain