At what level is most insurance regulated?

Insurance is primarily regulated at the state level due to the historical context and the structure of the insurance industry in the United States. Each state has its own insurance department that oversees the activities of insurance companies, including the licensing of insurers, the approval of policy forms and rates, and the enforcement of consumer protection laws. This state-based regulation allows for tailored approaches that consider the unique conditions and needs of each state's residents.

The rationale behind state regulation also includes the tradition of localized governance where states have the autonomy to establish their own requirements and standards in order to protect consumers effectively. This decentralization means that while there are certain federal guidelines that can impact the insurance industry, such as those related to specific types of insurance (like health insurance), the overarching regulatory framework and the authority to regulate most types of insurance products reside with the states.

In contrast, federal regulation is generally more limited in scope, typically applying to certain aspects of the financial industry or specific types of insurance, rather than the entire field. International regulation does not significantly apply to how domestic insurance markets operate, and while local levels may administer minor regulations, the primary oversight remains at the state level.