NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS:

Report to the Chairman

Committee on Ways and Means

House of Representatives

June 2026

GAO-26-107956

United States Government Accountability Office

 

A report to the Chairman of the Committee on Ways and Means, House of Representatives.

For more information, contact: Alicia Puente Cackley at cackleya@gao.gov.

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.

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 example, NAIC reported revenues and expenses in its annual budget and audited financial statements, which its executive committee reviews. NAIC also described its activities and membership structure in annual reports and bylaws.

In some cases, the information NAIC publicly reports is less granular than what Form 990 collects. For example, NAIC’s conflict-of-interest policy describes disclosure requirements for members but not for key employees, such as its chief executive officer. In addition, NAIC did not publicly report compensation for key employees. NAIC’s publicly available information also did not include certain items collected in Form 990, such as information related to fundraising and lobbying.

Why GAO Did This Study

The U.S. insurance industry is primarily regulated by states through state insurance regulators. NAIC is a private, tax-exempt organization whose membership comprises state insurance regulators.

GAO was asked to review NAIC’s role and its history of IRS filing requirements. This report describes NAIC's role in the state regulation of insurance and reviews and compares IRS's applicable filing requirements with what NAIC publicly reports.

GAO reviewed NAIC documents, including annual reports, budgets, and bylaws, and compared NAIC governance and financial information with that required by IRS Form 990. GAO also interviewed representatives of NAIC and IRS. In addition, GAO interviewed a nongeneralizable sample of five state insurance regulators (selected to reflect a range of agency sizes, geographic locations, and other factors) and six stakeholder groups (selected to reflect the perspectives of insurers, state legislators, and consumers).

 

 

 

 

 

 

 

 

 

Abbreviations
IRS	Internal Revenue Service
NAIC	National Association of Insurance Commissioners

June 18, 2026

The Honorable Jason Smith
Chairman
Committee on Ways and Means
House of Representatives

Dear Chairman Smith:

In the United States, the insurance industry is primarily regulated by the states, with each state’s insurance commissioner’s office or similar department responsible for overseeing insurance entities. The National Association of Insurance Commissioners (NAIC) is a private, tax-exempt organization whose membership comprises state insurance commissioners’ offices or departments (state insurance regulators). As of March 2026, state insurance regulators from all 50 states, the District of Columbia, and the U.S. territories were NAIC members.[1]

You asked us to review the role that NAIC plays in the state regulation of insurance and its filing requirements with the Internal Revenue Service (IRS). This report (1) describes NAIC’s role in state regulation of insurance and (2) reviews IRS filing requirements for NAIC and examples of similar organizations and compares NAIC’s publicly reported information with requirements in IRS filings.

For the first objective, we reviewed NAIC governance, financial, and guidance documents, including annual reports, policies, budgets, bylaws, handbooks, manuals, and public information on the activities of its committees. We also interviewed officials from NAIC and the U.S. Department of the Treasury’s Federal Insurance Office, which coordinates federal insurance policy. In addition, we interviewed a nongeneralizable sample of five state insurance regulators, selected to reflect diversity in size, insurance premium volume, and geography.[2] We also interviewed six stakeholder groups, which included industry associations, a national legislative organization, and a nonprofit advocacy group. These stakeholder groups were selected because they represented different types of insurance and had previously participated in NAIC meetings, among other factors.[3] The information gathered from our interviews cannot be generalized to all state insurance regulators or stakeholder groups that interact with NAIC.

For our second objective, we reviewed documentation provided by NAIC on its IRS filing requirements, including documentation related to its Form 990 exception status and IRS private letter rulings.[4] We compared information NAIC disclosed in its governance and financial documents with disclosures required in IRS Form 990. Additionally, we identified four examples of tax-exempt organizations similar to NAIC by analyzing publicly available data from IRS’s August 2025 Exempt Organizations Business Master File Extract and reviewing prior GAO reports.[5] We used the IRS data to determine these organizations’ requirements for filing Form 990. We also used information from NAIC documentation and interviews with IRS officials. For more detailed information about our scope and methodology, see appendix I.

We conducted this performance audit from November 2024 to June 2026 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Background

History of the National Association of Insurance Commissioners

Insurance in the United States is primarily governed by state law, and state insurance regulators carry out regulation and enforcement responsibilities for their state. For example, each state’s insurance regulator licenses insurance companies and agents that do business in their state and reviews insurance product filings and premium rates for approval, as required. Regulators also conduct periodic examinations to monitor insurance companies’ financial solvency, which helps ensure that these companies can pay claims, and to monitor their market conduct.

NAIC was established in 1871 as a support organization for state insurance regulators. While each state establishes its own insurance laws and regulations, regulators needed a forum to discuss common regulatory concerns. NAIC developed resources to support the national system of state-based insurance regulation, including the accreditation program and standardized data collection efforts. As of March 2026, NAIC’s membership included the state insurance regulators from all 50 states, the District of Columbia, and the U.S. territories (American Samoa, Guam, Puerto Rico, U.S. Virgin Islands, and Northern Mariana Islands).

NAIC Committees and Offices

NAIC conducts its work through a member-led committee structure, composed of an executive committee and standing committees. The executive committee also selects the NAIC chief executive officer, who oversees NAIC staff offices that provide support to members.

Executive committee. NAIC is led by an executive committee that helps ensure its business and affairs are consistent with its certificate of incorporation and bylaws.[6] The executive committee identifies organizational priorities and provides recommendations to members related to committee work. It also oversees NAIC’s chief executive officer and staff offices, including revising the annual budget and reviewing senior management compensation.

Standing committees. NAIC established eight standing committees to organize its work.[7] Within these committees, members consider issues such as market regulation and consumer affairs, financial regulation standards, and innovation and technology. Each committee may also establish working groups or task forces to carry out its responsibilities.

NAIC staff offices. NAIC staff offices are managed by NAIC’s chief executive officer, who is selected by and works at the direction of the executive committee. According to NAIC bylaws, the chief executive officer cannot be a state insurance regulator. The offices consist of staff who work for the organization and provide administrative, technical, legal, and other support to NAIC committees and members. For example, NAIC’s legal division supports the accreditation program by reviewing state laws and reporting to the accreditation committee. These staff are not state insurance regulators, and NAIC bylaws outline the various functions in which the staff may be involved. NAIC has staff offices in Washington, D.C.; Kansas City, Missouri; and New York, New York.

NAIC Publications and Meetings

NAIC publishes reports and documents related to its internal governance, data collection efforts, and procedures on its website.[8] These include

·         bylaws, certificate of incorporation, conflict-of-interest policy, and committee membership lists;

·         annual budgets and annual reports that include audited financial statements; and

·         handbooks, manuals, and procedures used as resources for state insurance regulators.

NAIC organizes multiple meetings throughout the year. According to its bylaws, NAIC must hold at least two national meetings each year to, among other things, bring members together to consider and vote on various issues. NAIC committees also hold meetings throughout the year. Some meetings are open to the public, while others are restricted to members.[9] Information and summaries of national and committee meetings are posted on NAIC’s website.[10]

NAIC Interactions with Federal and Other Entities

NAIC, at the direction of its members, works with federal agencies on insurance-related issues, including flood insurance, terrorism insurance, health insurance, and crop insurance. These agencies include the Federal Insurance Office, Federal Emergency Management Agency, U.S. Department of Health and Human Services, and U.S. Department of Agriculture. For example, NAIC works with the Federal Insurance Office to develop and support the annual collection of insurance company data related to terrorism risk insurance.[11] These data are also provided to state insurance regulators.

NAIC’s executive committee designates a state insurance regulator to serve as a nonvoting member on the Financial Stability Oversight Council, which was created in 2010 to identify and respond to potential risks to the stability of the U.S. financial system, among other responsibilities.[12]

In addition, NAIC and its members work with international insurance regulators on insurance issues. NAIC facilitates and coordinates its members’ interactions with international insurance regulators. For example, NAIC and its members are part of the International Association of Insurance Supervisors, an international standard-setting body composed of insurance regulators from more than 200 jurisdictions. The other U.S. participants are the Board of Governors of the Federal Reserve System and the Federal Insurance Office.

NAIC’s Role in State Regulation of Insurance

What is NAIC’s role in developing standards for the insurance industry?

NAIC provides a forum to help its members develop nationwide industry standards in areas where regulatory consistency is needed. NAIC committees develop these standards by drafting model laws—draft legislation intended to be enacted across states.[13] According to NAIC staff, model laws are generally developed around issues where uniformity among state insurance regulators could assist the regulation of financial solvency or market conduct.[14] As part of the drafting process, committees solicit and consider comments from industry, consumer, and other groups, according to NAIC staff. Five of the six stakeholder groups we spoke with noted that they provided feedback to NAIC members on model laws in various ways. Once a model law is drafted, NAIC committees and members may vote to dedicate state resources toward encouraging the passage of the law in each state.

NAIC members then share the model law with their state legislatures, which ultimately decide whether and how to enact it. The model law becomes law only if enacted by a state’s legislature and signed by the governor. Figure 1 provides an overview of the process for developing and adopting model laws.

Note: NAIC committees may also draft model regulations that state regulators may choose to implement through the regulatory rather than the legislative process.

NAIC has drafted model laws to establish insurance industry standards across all insurance lines (including life, health, and property/casualty insurance) and for multiple parties in the insurance industry (such as insurance companies, agents, brokers, and producers). NAIC’s model laws address a range of regulatory areas, including financial solvency, risk management, financial reporting, and consumer protection.[15] For example:

·         Risk-Based Capital Model Act: Establishes risk-based capital requirements and regulatory reporting requirements for insurance companies.[16]

·         Unfair Trade Practices Act: Prohibits insurance companies and other insurance-related businesses from engaging in misrepresentation, false advertising, and unfair discrimination.[17]

·         Producer Licensing Act: Outlines the qualifications and procedures for licensing certain insurance producers.[18]

How does NAIC’s accreditation program support standardization?

NAIC’s accreditation program seeks to standardize state regulation of insurance by establishing baseline oversight requirements for monitoring insurance companies’ financial solvency.[19] As of March 2026, the state insurance regulators from all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands were accredited.

A state insurance regulator becomes accredited when it meets NAIC’s requirements for assessing whether insurance companies are financially solvent and able to pay out claims owed to policyholders. The requirements are broken out into the following categories:

·         Model laws. NAIC model laws (or those substantially similar) pertaining to oversight of the solvency of insurance companies must be enacted into state law.[20] These model laws also require state insurance regulators to follow certain NAIC manuals and procedures, such as NAIC’s accounting procedures, valuation standards, and formats for collecting financial information from insurance companies.[21] In addition, they require state insurance regulators to periodically examine all licensed insurance companies but allow regulators to rely on examinations conducted by another accredited state insurance regulator.[22]

·         Regulatory practices and procedures. Regulatory practices and procedures must be in place to support state insurance regulators’ oversight of insurance companies’ financial solvency. For example, state insurance regulators need to have sufficient qualified staff to assess insurance companies’ financial health and establish procedures for supervisory review of examination findings. These accreditation practices and procedures also include following certain NAIC handbooks and formats for documenting examination findings.[23]

·         Organizational personnel and practices. Practices must be in place for establishing minimum educational and experience requirements for personnel and to provide necessary training for personnel responsible for financial surveillance and regulation.

·         Primary licensing, redomestication, and change-of-control procedures. State regulators must have sufficient qualified staff and internal procedures related to licensing new insurance companies or companies looking to transfer their incorporation to another state (known as redomestication).

NAIC staff, an independent team of consultants, and committee members review whether a state insurance regulator meets these requirements for initial and continued accreditation, according to the NAIC accreditation handbook. To determine initial accreditation status and every 5 years thereafter, NAIC staff complete a legal and on-site review. Additionally, the state insurance regulator completes an interim review annually based on NAIC guidelines to evaluate its accreditation status, according to NAIC’s accreditation handbook:

·         Legal review. NAIC’s legal division assesses whether state regulators meet the model law and regulation requirements.

·         On-site review. An independent team of consultants examines a sample of the regulator’s reports and financial analysis files and interviews regulators’ staff to determine whether the required procedures and practices are in place.[24]

·         Interim reviews. Every year, state insurance regulators complete an NAIC self-evaluation guide that asks about any changes to laws, regulations, or procedures required for accreditation. NAIC staff review the self-evaluation and provide a summary of the findings to the accreditation committee.

The NAIC committee responsible for the accreditation program considers findings from initial reviews to determine whether the state insurance regulator should be accredited. For subsequent reviews that occur every 5 years, the committee also considers the findings from the legal and on-site reviews to determine whether the state insurance regulator should remain accredited. NAIC does not make these findings public, and NAIC staff noted that committee discussions are limited to regulators.

If requirements are not met, NAIC may suspend or revoke a state insurance regulator’s accreditation status.[25] According to NAIC staff, seven state insurance regulators have had their accreditation status suspended since the program’s inception in 1990 and five were reaccredited within 2 years of suspension. Examples of reasons for suspension include not having the required model laws in place and noncompliance with examination or financial analysis standards. As previously noted, all state insurance regulators were accredited as of March 2026. NAIC publicly posts which regulators have had their accreditation status suspended or revoked under certain circumstances and removes the name of the regulator from the list of accredited jurisdictions, according to NAIC staff.[26] Additionally, regulators may publicly acknowledge a change in their accreditation status.

The five state insurance regulators we interviewed identified benefits from the standardization of insurance regulation through the accreditation program. For example, they said the accreditation program allows them to rely on other accredited regulators’ assessments of an insurance company’s financial health because those regulators meet NAIC oversight standards. In addition, they noted cost savings from being able to accept an examination completed by another accredited regulator rather than conducting a separate examination themselves. If a state insurance regulator was not accredited, other regulators might not trust the quality of its financial solvency oversight and examinations, according to state officials. As a result, each regulator might need to conduct an additional, potentially duplicative financial solvency examination of those insurance companies, increasing regulatory costs.

Two industry associations whose representatives we interviewed also identified benefits to the accreditation program. In particular, they noted that it reduces insurance companies’ regulatory burden because they generally need to respond only to one state regulator rather than regulators in each state in which they operate.

State insurance regulators also identified challenges with the accreditation program. For example, three regulators noted challenges meeting the organizational personnel requirement to maintain sufficient and qualified staff because of shrinking budgets or competition with the private sector for this type of talent. Two of these regulators noted that a lack of qualified staff also affected its ability to complete planned examinations and meet other examination-related standards to maintain accreditation. Lastly, one regulator noted meeting the requirement that certain model laws be enacted can be difficult because it can take years for a model law to become state law, particularly if the legislature meets infrequently or makes substantial changes to the model law language.

What is NAIC’s role in collecting information to assist with state regulation of insurance?

NAIC manages centralized data systems that collect information from state insurance regulators and insurance companies. These systems help regulators fulfill oversight responsibilities and share information. According to NAIC, some of these data collection efforts are codified in state law. For example, laws required for accreditation may include requirements for insurance companies to file financial statements with NAIC.[27] NAIC also receives fees from insurance companies that submit data and from licensing and selling these data to third parties as part of its role as a central repository of information.

NAIC has created several data collection systems and resources to assist state insurance regulators, including:

·         Interstate systems. These systems help regulators communicate and share regulatory information. For example, the Financial Exam Electronic Tracking System allows regulators to share their examination reports with each other. Two regulators we interviewed also noted that the Regulatory Information Retrieval System, which contains records of regulatory actions taken against insurance companies in different states, helped them proactively identify issues.

·         Regulatory back-end systems. These systems help regulators perform day-to-day responsibilities, such as tracking consumer complaints, reviewing rate changes, and collecting taxes. For instance, the System for Electronic Rate and Form Filing is a centralized online platform through which insurance companies submit rate and form filings for regulatory review and approval. Three regulators told us that this system has helped streamline and expedite their reviews and that electronic filings allow them to run queries and reports across all filings to gain additional insights.

·         Analyses. NAIC provides oversight resources and reports based on industry data to support regulatory oversight. For example, NAIC’s financial analysis solvency tools, such as company profiles and financial condition ratios, use information from insurance company filings stored in NAIC’s financial data repository. NAIC also collects and analyzes information on insurance companies’ securities holdings to assign a measure of investment risk, called an NAIC designation.[28] Regulators use these designations to assess insurance companies’ financial condition, particularly whether they can cover potential claims and remain solvent. All five regulators we interviewed said they rely on these analytical tools in their regulatory work, such as identifying troubled companies and focusing resources to monitor them. They also noted that NAIC staff expertise is helpful in technical areas such as securities valuation.

In 2024 (the most recent year actual revenue figures were available at the time of our analysis), approximately 94 percent of NAIC’s revenue came from fees paid by insurance companies to submit data to NAIC or from organizations that purchased NAIC data or used NAIC’s data systems.[29] For example, insurance companies pay a fee to file their financial statements with NAIC that is based on their premiums.[30] In addition, according to NAIC staff, NAIC sells nonconfidential data from its financial data repository to the public, including third party vendors that may redistribute the data, researchers, and academics.[31] According to NAIC’s budget documents, the revenue generated from filings supports the financial solvency monitoring tools provided to its members. Insurance companies also pay fees for NAIC to evaluate certain investment securities and assign NAIC designations and to use NAIC’s regulatory back-end systems.

NAIC’s IRS Filing Requirements and Publicly Reported Information

What are IRS’s filing requirements for tax-exempt organizations?

Tax-exempt organizations are required to file a Form 990-series information return or notice annually with IRS unless an exception applies.[32] Form 990 collects information about a tax-exempt organization’s mission, activities, governance, and finances, including

·         information on the organization’s mission and accomplishments of its largest programs;

·         governance information, such as the number of voting members of the governing body, the presence of various governance policies (e.g., whistleblower policies), and disclosure practices;

·         compensation paid to key employees, officers, and directors; and

·         financial information, including revenue, expenses, and assets.

Tax-exempt organizations use the Form 990-series returns to provide IRS with information required by the Internal Revenue Code.[33] The public may also rely on Form 990 or Form 990-EZ to obtain information on a particular tax-exempt organization, as stated in IRS’s Form 990 instructions.

The Form 990 filing exception applies to certain types of organizations, including

·         governmental organizations and affiliates of governmental organizations (including wholly-owned instrumentalities of one or more states),[34] and

·         churches.[35]

An organization that is excepted from the Form 990 filing requirement may request a ruling or determination from IRS confirming that it meets the requirements for the exception, but it is not required to do so.[36]

Under the Internal Revenue Code, tax-exempt organizations must make their Form 990 and their application for federal tax-exempt status available to the public.[37] Organizations must indicate in their Form 990 how they made these documents available (e.g., by posting them on their websites). In addition, IRS makes redacted copies of written determinations regarding Form 990 filing exceptions publicly available.[38]

What are NAIC’s IRS filing requirements?

NAIC has been excepted from filing Form 990 since 1955 (see fig. 2), according to our review of NAIC’s tax-exemption application documents provided by NAIC. In these documents, 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. NAIC is not required to file Form 990 because, according to NAIC documents, IRS determined in both 1955 and 1999 that NAIC was an instrumentality wholly owned by the states after it requested an exception from the filing requirement.[39] According to NAIC documents, for both requests, NAIC and its members provided information to IRS indicating that NAIC performed a governmental function on behalf of the states.

Note: IRS recognizes an organization’s exempt status if it meets specified eligibility criteria. See, e.g., 26 C.F.R. § 1.501(c)(3)-1(f)(1). NAIC is excepted from filing Form 990, which is a type of annual information return that tax-exempt organizations must file with the Internal Revenue Service (IRS) unless an exception applies. IRS considers certain criteria to determine whether an organization is an instrumentality wholly owned by the states, including whether the organization performs a governmental function on behalf of one or more states or political subdivisions.

What are the IRS filing requirements for examples of organizations similar to NAIC?

We identified four illustrative examples of tax-exempt organizations similar to NAIC that are national organizations and conduct activities that support their state members.[40] Of these four organizations, all except the National Association of Attorneys General were required to file Form 990, according to IRS’s August 2025 exempt organizations data.[41]

These examples were identified using the August 2025 IRS exempt organization data and background research. Specifically, we identified one organization (National Association of Attorneys General) that was classified in a similar manner to NAIC in the IRS data and consisted of state regulators.[42] We identified the other three organizations by reviewing publicly available information and prior GAO reports for organizations whose members included state regulatory agencies and served a coordination role with a federal government entity. We identified the following four examples:

·         The National Association of Attorneys General convenes state attorneys general, facilitates discussion and information sharing among its members, and provides members with technical resources and training.

·         The North American Securities Administrators Association and the Conference of State Bank Supervisors consist of securities and banking regulators, respectively, from all U.S. states and serve as nonvoting members of the Financial Stability Oversight Council, similar to NAIC. Both organizations also provide forums for state members to share information and coordinate regulatory activities.

·         The Money Transmitter Regulators Association convenes money transmitter regulators from states and territories. It provides a forum to exchange information among regulators’ staff, develops uniform examination standards, and offers educational opportunities.

What information collected by Form 990 does NAIC make publicly available?

NAIC generally provides publicly available information similar to information collected by Form 990, according to our review of available NAIC documentation.[43] For example, NAIC generally publishes governance and financial information in documents available online, including its certificate of incorporation, bylaws, annual reports, budgets, and audited financial statements. In particular, NAIC reports revenues and expenses in its annual audited financial statements and budgets, which are reviewed by NAIC’s executive committee. Additionally, NAIC describes its mission, activities, and membership structure in annual reports, bylaws, and certificate of incorporation.

In some cases, the information NAIC publicly reports is not as granular as the information Form 990 collects. For example:

·         Governance policies. The Form 990 section on governance policies asks organizations to disclose conflict-of-interest policies applicable to key employees. Although NAIC’s conflict-of-interest policy is public and describes disclosure requirements for members, we could not find public information on requirements for key employees, such as the chief executive officer and other top management officials referenced in Form 990. NAIC staff told us that NAIC’s employee handbook includes a conflict-of-interest policy for employees covering issues such as accepting gifts, awarding contracts, and insider trading. In addition, certain employment contracts also include a conflict-of- interest policy. Both of these documents are not publicly available.

·         Compensation disclosures. The Form 990 section on compensation requires organizations to disclose compensation for key employees, such as the chief executive officer. Based on our analysis, NAIC does not make this information publicly available, which NAIC staff confirmed. However, NAIC reported total employee salaries in its financial statements and budgets and provides confidential compensation information on key employees to some state and federal agencies.[44] For instance, NAIC is required to provide an annual report to the Michigan state insurance regulator and state legislature that includes such compensation information.[45]

We also could not find publicly available NAIC information on certain items collected in Form 990, including the following:

·         Revenue or expense information related to NAIC fundraising or lobbying.

·         The method for making NAIC’s tax exemption application available to the public. According to NAIC staff, the application is available upon request by e-mail or as a hard copy at its offices.

·         Governance policies such as whistleblower policy and document retention and destruction policies. While IRS’s Form 990 instructions describe these policies as not legally required, they also state that tax-exempt organizations should consider adopting them to help ensure sound operations and compliance with tax law.[46]

Agency and Third Party Comments

We provided a draft of this report to NAIC and the Department of the Treasury, including IRS and the Federal Insurance Office, for their review and comment. Each of these entities provided technical comments, which we incorporated as appropriate.

 

We are sending copies of this report to the appropriate congressional committees, the Secretary of the Treasury, and NAIC. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at cackleya@gao.gov. Contact points for our Offices of Congressional Relations and Media Relations may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix II.

Sincerely,

Alicia Puente Cackley
Director, Financial Markets and Community Investment

This report (1) describes the National Association of Insurance Commissioners’ (NAIC) role in state regulation of insurance and (2) reviews the Internal Revenue Service (IRS) filing requirements for NAIC and examples of similar organizations and compares NAIC’s publicly reported information with requirements in IRS filings.

For the first objective, we reviewed NAIC governance and organizational documents, including annual reports, policies, budgets, and bylaws. These included documents such as NAIC’s 2026 budget, open meeting policy, and committee index and responsibilities.[47] To describe NAIC’s role in developing industry standards and its accreditation program, we also reviewed NAIC’s list of model laws, accreditation handbook, and manuals related to accounting practices and valuation of securities.[48] To describe NAIC’s data collection efforts, we reviewed its technology products and services catalog, data collection tools used to collect financial and market conduct information from insurance companies, and revenue from these efforts reported in NAIC’s 2024 audited financial statements (the most recent year actual revenue figures were available). We also interviewed NAIC staff about how the organization supports state regulation of insurance and interviewed officials from the Department of the Treasury’s Federal Insurance Office, which coordinates federal insurance policy.

In addition, to obtain perspectives from NAIC members, we interviewed staff from a nongeneralizable sample of five state insurance regulators: the Illinois Department of Insurance, Kentucky Department of Insurance, North Dakota Insurance and Securities Department, Vermont Department of Financial Regulation, and Washington Office of the Insurance Commissioner.[49] We selected these regulators to reflect variation in staff size and resources. The selection also reflected variation in the number of insurance companies overseen. Other considerations included the volume of insurance premiums and geographic location. We discussed their interactions with NAIC and perspectives on its role. The information from our interviews cannot be generalized to all state insurance regulators that interact with NAIC.

We also interviewed representatives of six stakeholder groups: three industry groups—the American Property Casualty Insurance Association, Independent Insurance Agents and Brokers of America, and National Association of Mutual Insurance Companies—as well as the National Council of Insurance Legislators (a national legislative organization), the Center for Economic Justice (a nonprofit advocacy group), and the American Consumer Institute Center for Citizen Research (think tank). We selected the stakeholder groups to provide a range of perspectives from insurance market stakeholders, including those representing insurance companies and participants across various types of insurance and roles, state legislatures, and consumers. Other considerations included stakeholder groups’ membership size and prior participation in NAIC meetings. We discussed their perspectives on NAIC’s role in state insurance regulation. The information from our interviews cannot be generalized to all stakeholder groups that interact with NAIC.

For our second objective, we used documentation provided by NAIC and interviewed IRS officials. To describe NAIC’s IRS filing history and requirements, we reviewed documents provided by NAIC. These included NAIC proceedings for NAIC meetings from 1952–1956 and 1999, NAIC’s 1999 application for tax-exempt status, NAIC’s records pertaining to IRS private letter rulings, and IRS guidance on forms related to exception status.[50]

We also analyzed publicly available data from IRS’s Exempt Organizations Business Master File Extract as of August 2025. This dataset contains information on tax-exempt organizations, such as employer identification number, name, classification for tax deduction purposes, and filing requirements for the annual exempt organization return (Form 990).[51] To identify illustrative examples of exempt organizations that may be similar to NAIC, we reviewed 362 organizations that had the same data value as NAIC for the “foundation code” variable in the dataset (i.e., organizations classified as “governmental units”).[52] From these organizations, we searched their names for keywords such as “national,” “North America,” “state,” “regulators,” “supervisors,” or “administrators.” We chose these keywords to help identify entities that consist of state regulators across the United States. Through this analysis, we identified one example of an organization similar to NAIC.

We also reviewed publicly available information from our background research and prior GAO reports to identify additional organizations whose members include state regulatory agencies and that serve a coordination role with a federal government entity, such as the Financial Stability Oversight Council.[53] Through this method, we identified three additional examples of similar organizations to NAIC, bringing the total number of illustrative examples reviewed for this objective to four.[54]

We reviewed the websites of these four organizations to understand their membership structures, geographic coverage, activities, and resources provided to members. We also reviewed the August 2025 exempt organizations data to determine their tax classification and whether they were required to file Form 990. To assess the reliability of the IRS data, we reviewed IRS’s information on the variables of its dataset, conducted electronic data testing, and interviewed IRS officials. We determined the IRS data were sufficiently reliable for the purposes of providing information on the Form 990 filing requirements of selected tax-exempt organizations.

To determine what information NAIC makes publicly available compared with information IRS collects from tax-exempt organizations on Form 990, we identified NAIC documents on its website, including its 2024 annual report and audited financial statements, bylaws, and certificate of incorporation.[55] Our review may not have included all publicly available NAIC information. We compared this information with that required in parts I, III, VI, VII, VIII, IX, X, XI, and XII of IRS’s 2024 Form 990, which request information on organizational activities, governance, management, policies, and finances.[56]

We did not compare NAIC’s publicly disclosed information with the parts of Form 990 that require organizations to complete additional schedules based on specific activities or that request more detailed information on compliance with tax laws or completion of tax forms. Reviewing these would have required knowledge of NAIC’s internal operations and tax compliance history, which were not within the scope of our review.

We conducted this performance audit from November 2024 to June 2026 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

GAO Contact

Alicia Puente Cackley, cackleya@gao.gov

Staff Acknowledgments

In addition to the contact named above, Nadine Garrick Raidbard (Assistant Director), Christine Ramos (Analyst in Charge), Lauren Capitini, Chelsea Carter, Anna Chung, LaToya Coleman, Jessica Lucas Judy, Jill Lacey, Krista Loose, Marc Molino, Sonya Phillips, Lindsay Shapray, Mary Stack, Jennifer Stratton, and See Yee (Denise) Wong made key contributions to this report.

Tax Administration: Opportunities Exist to Improve Oversight of Hospitals’ Tax-Exempt Status. GAO‑20‑679. Washington, D.C.: September 17, 2020.

Tax Exempt Organizations: IRS Increasingly Uses Data in Examination Selection, but Could Further Improve Selection Processes. GAO‑20‑454. Washington, D.C.: June 16, 2020.

Lender-Placed Insurance: More Robust Data Could Improve Oversight. GAO‑15‑631. Washington, D.C.: September 8, 2015.

Insurance Markets: Impacts of and Regulatory Response to the 2007-2009 Financial Crisis. GAO‑13‑583. Washington, D.C.: June 27, 2013.

Risk Retention Groups: Clarifications Could Facilitate States’ Implementation of the Liability Risk Retention Act. GAO‑12‑16. Washington, D.C.: December 8, 2011.

Consumer Finance: Regulatory Coverage Generally Exists for Financial Planners, but Consumer Protection Issues Remain. GAO‑11‑235. Washington, D.C.: January 18, 2011.

Title Insurance: Actions Needed to Improve Oversight of the Title Industry and Better Protect Consumers. GAO‑07‑401. Washington, D.C.: April 13, 2007.

Insurance Regulation: Common Standards and Improved Coordination Needed to Strengthen Market Regulation. GAO‑03‑433. Washington, D.C.: September 30, 2003.

Insurance Regulation: The NAIC Accreditation Program Can Be Improved. GAO‑01‑948. Washington, D.C.: August 31, 2001.

Regulatory Initiatives of the National Association of Insurance Commissioners. GAO‑01‑885R. Washington, D.C.: July 6, 2001.

Insurance Regulation: Scandal Highlights Need for Strengthened Regulatory Oversight. GAO/GGD‑00‑198. Washington, D.C.: September 19, 2000.

Insurance Regulation: The National Association of Insurance Commissioners’ Accreditation Program Continues to Exhibit Fundamental Problems. GAO/T‑GGD‑93‑26. Washington, D.C.: June 9, 1993.

Insurance Regulation: Weak Oversight Allowed Executive Life to Report Inflated Bonds Values. GAO/GGD‑93‑35. Washington, D.C.: December 9, 1992.

Insurance Regulation: The Financial Regulation Standards and Accreditation Program of the National Association of Insurance Commissioners. GAO/T‑GGD‑92‑27. Washington, D.C.: April 9, 1992.

Insurance Regulation: The Failures of Four Large Life Insurers. GAO/T‑GGD‑92‑13. Washington, D.C.: February 18, 1992.

Insurance Regulation: Assessment of the National Association of Insurance Commissioners. GAO/T‑GGD‑91‑61. Washington, D.C.: July 29, 1991.

Insurance Regulation: Assessment of the National Association of the Insurance Commissioners. GAO/T‑GGD‑91‑37. Washington, D.C.: May 22, 1991.

Insurance Regulation: The Insurance Regulatory Information System Needs Improvement. GAO/GGD‑91‑20. Washington, D.C.: November 21, 1990.

Insurance Regulation: Problems in the State Monitoring of Property/Casualty Insurer Solvency. GAO/GGD‑89‑129. Washington, D.C.: September 29, 1989.

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