What Does An Insurance Commissioner Do?
Insurance commissioners are elected or appointed state-level positions in the United States. As such, each of the fifty states has one insurance commissioner who acts as the chief of their respective insurance departments. They are elected by the people in eleven states but are appointed by the governors in 37 states and by multi-member commissions in the remaining two. The public elects insurance commissioners in California, Delaware, Montana, North Carolina, Washington, Georgia, Kansas, Louisiana, Mississippi, North Dakota and Oklahoma.
Meanwhile, governors appoint individuals to the position in the states of Alabama, Alaska, Florida, Hawaii, Idaho, Indiana, Michigan, Nebraska, Nevada, New Hampshire, New Jersey, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Wisconsin, Arizona, Arkansas, Colorado, Connecticut, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Missouri, New York, Oregon, Vermont, West Virginia and Wyoming. On the other hand, the Public Regulation Commission appoints the insurance commissioner in New Mexico while the State Corporation Commission does the appointing in Virginia.
In a nutshell, the role of insurance commissioners involves licensing, regulation and consumer protection. Insurance commissioners are responsible for checking the applications of insurance firms who want to do business in the state and issuing their licenses so they can operate. They must also regulate the operations of insurers operating in their jurisdiction. They must see to it that insurance firms have financial reserves that can cover claims made by its policyholders.
There are insurance products that are mandatory in most states. For instance, some car insurance products must be purchased by motorists so they can be protected in the event of accidents. The role of insurance commissioners is to make sure that these remain affordable for consumers and prevent insurers from exploiting consumers who need to comply with this legal requirement. At the same time, insurance commissioners must see to it that the rights of insurers to earn a profit from their business operations are also protected. Thus, they must thoroughly review all pertinent financial data before approving insurance rates.
In addition to controlling the rates, insurance commissioners must also see to it that insurance products sold in the state are responsive to changes in the legal, health and economic spheres. This means that they have to be constantly updated on the happenings in these areas as well as any pending legislation that could affect the insurance industry as a whole. They must also see to it that the products sold in the state provide sufficient coverage to the policyholders while still allowing insurers to maintain good business.
Another important task that insurance commissioners do is to look into complaints made by policyholders and other entities against insurance firms operating in the state. Independent investigators conduct the actual inquiries but insurance commissioners typically head these teams. Based on the investigations, they will determine if the insurer has violated laws and determine the kind of penalty or case that must be imposed on or filed against the firm. Insurance commissioners must see to it that all insurers follow the laws so that the playing field is level for all companies and that all rights of policyholders are going to be protected.