What is the primary purpose of state insurance departments?

The primary purpose of state insurance departments is to regulate insurance companies and protect consumers. State insurance departments oversee the insurance industry within their respective states to ensure that insurance companies remain financially solvent, adhere to fair trade practices, and comply with state laws. This regulatory role is vital in maintaining the integrity of the insurance market, protecting consumer rights, and promoting public confidence in insurance providers. By enforcing statutes and regulations, state insurance departments help to ensure that consumers are treated fairly and have access to reliable insurance products that meet their needs.

While providing insurance policies, setting premium rates, and approving rates based on competition are functions that may involve a combination of state regulation and market forces, the primary function of state insurance departments is to serve as regulatory bodies that oversee and safeguard the insurance market for consumers.