Follow Us



Vermont, North Carolina at Opposite Ends of Insurance Regulatory Report

Staff Writer | December 01, 2015

The R Street Institute has released its annual report card on insurance regulation, awarding Vermont and four other states with a grade of “A” and North Carolina a grade of “F.”


The 2015 Insurance Regulation Report Card, R Street’s annual publication, examines which states do the best job of regulating the business of insurance, by assigning scores in 10 different areas, including monitoring solvency, policing fraud, protecting consumers, and fostering competitive markets.

“Reviewing the data on insurance in 2015, we see mostly stable trends in consumer and business freedom in state insurance markets,” says R Street editor-in-chief and senior fellow R.J. Lehmann, the author of the study. “In some states—notably Florida—real efforts were made to scale back, or otherwise place on more sound financial footing, residual insurance markets and state-run insurance entities. Other states, notably North Carolina, appear to be moving in the wrong direction.”

Vermont received consistent scores across almost all areas of the scorecard, specifically in consumer protection, politicization, auto and homeowners insurance environments, rate freedom and clarity, and regulatory restrictions. Taken cumulatively, its scores gave it the best rate in the nation. Other states receiving “A” grades were Utah, Iowa, Virginia and Kentucky.

At the other end of the spectrum, North Carolina received a failing grade, in part due to the state's inflexible rate bureau system and recent growth of the residual market FAIR Plan and Beach Plan. Also scoring near the bottom with “D” grades were Louisiana, New York, Texas, Florida, California, Hawaii, and Montana.

The report also noted that states continue to draw far more in regulatory fees and assessments than they spend on insurance regulation. The 50 states, Puerto Rico and the District of Colum­bia spent $1.33 billion on insurance regulation in 2014 but collected more than double that amount, roughly $3 billion, in reg­ulatory fees and assessments from the insurance industry.

"These surplus regulatory fees and assessments end up in state coffers to patch other holes in state budgets," Lehmann said. "They serve as a hidden tax on insurance consumers, raising the cost of coverage for everyone."

If premium taxes, fines and other revenues are included in the tally, only six percent of the $21.9 billion states collected from the insurance industry last year was spent on insurance regulation, down from 6.4 percent the prior year and 6.6 percent in 2012.

Featured articles



The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.

  • Electronic Chat: Ken Mitchel

    Robert Regis Hyle

    I would say that data mining technologies are under-used for most small to mid-size insurance entities, likely because it is such a large undertaking... READ MORE


The tide is up! It's time to register for ITA LIVE 2019, our annual educational and networking conference! Our theme is "The InsurTech Revolution: Cutting Through the Hype." and we'll be bringing in a torrent of industry thought leaders, amazing insight and wonderful perspectives on the world of insurtech and its impact on the insurance landscape.

ITA LIVE 2019 will present real-life examples of true startup technologies that are helping insurers gain real advantage -- and a competitive edge -- in the marketplace. We’ll highlight the more successful InsurTech partnerships, while offering case studies that demonstrate exciting innovation and cutting-edge techniques impacting all aspects of the insurance ecosystem.

Ride the wave to LIVE 2019. Sign up today! We look forward to seeing you in May, 2019!


only online

Only Online Archive

ITA Pro Buyers' Guide

Vendor Views

Partner News