What is a key objective of insurance industry regulation?

The primary objective of insurance industry regulation is to protect consumers and maintain insurer solvency. This dual focus ensures that policyholders have confidence in the financial stability of their insurers and that they are treated fairly. Protecting consumers involves ensuring that insurance products and practices are transparent, fair, and meet the needs of the public, while maintaining insurer solvency is critical to ensuring that insurers can pay claims and fulfill their obligations to policyholders. Regulators monitor the financial health of insurance companies, enforcing capital requirements and sound business practices to prevent insolvency, which would leave consumers unable to collect on their policies. This regulatory framework is designed to promote trust in the insurance system, ultimately benefiting both consumers and the industry at large.