Insurance regulation in the United States is predominantly performed by:

• A. The federal government
• B. International bodies
• C. The states
• D. Local municipalities

Answer: (C)

Insurance regulation in the United States is handled primarily by state governments. States license agents, approve policy forms and rates, and oversee insurers operating within their borders to protect consumers and ensure solvency. The framework for this arrangement was established when federal regulation of the business of insurance was limited by the McCarran-Ferguson Act, reaffirming that states regulate insurance, with federal involvement only in narrowly defined areas. While the federal government does have some specific program roles (like flood insurance or terrorism risk insurance) in particular areas, the general rule is state-level regulation. International bodies and local municipalities do not regulate the private insurance market nationwide.