State insurance commissioners: elected vs appointed

Eleven states elect their insurance commissioner by statewide vote: California, Delaware, Georgia, Kansas, Louisiana, Mississippi, Montana, North Carolina, North Dakota, Oklahoma and Washington. Everywhere else the head of the insurance department is appointed, usually by the governor, often with Senate confirmation, and in a few states through a board or commission. The title varies too: commissioner, superintendent or director.

The list above comes from a Faegre Drinker roundup of the 2020 elections; it also lists the U.S. Virgin Islands. Constitutional and statutory changes are rare but possible, so confirm your own state on its department's website.

What a commissioner actually controls

The commissioner sits atop the department of insurance and holds the powers the state legislature has granted. In most states that means:

• Approving or disapproving rates and policy forms, within whatever the rate law allows (prior approval vs file-and-use rate laws).
• Licensing insurers and agents, and suspending or revoking those licenses.
• Ordering financial examinations and, when an insurer is failing, seeking rehabilitation or liquidation in court as receiver.
• Fining insurers and ordering corrective action after a market conduct exam or a complaint investigation.
• In some states, issuing emergency orders after a disaster, such as a moratorium on cancellations and nonrenewals (disaster moratoriums on cancellations and nonrenewals).
• Representing the state at the NAIC, where commissioners vote on model laws and accreditation standards (What the NAIC does).

The statute matters more than the title. A commissioner in a prior-approval state has a veto over every rate increase. A commissioner in a state where insurers use rates first and file later has to find a problem after the fact and act on it.

The two models

Both critiques are real, and neither model reliably produces tougher or softer regulation. The rate law, the department's staff and the state's catastrophe exposure usually shape outcomes more than the selection method. Pointing to a single study that proves one model better would claim more than anyone has shown.

What a commissioner cannot do

Voters and homeowners sometimes expect more from the office than the law provides. In most states a commissioner cannot:

• Force an insurer to write policies. Insurers may reduce or leave a market, and regulators can slow or condition the exit but rarely stop it outright. See why insurers are pulling out of states.
• Set a rate by decree. Even in a prior-approval state, the commissioner reviews an insurer's filing against statutory standards such as whether the rate is excessive, inadequate or unfairly discriminatory. A rate that meets the standard is typically approved even if it is unpopular.
• Pay or reverse an individual claim decision. The department can investigate, and in some states mediate, but the dispute itself ends in negotiation, an appraisal or a court.
• Change the law. Rate standards, claims deadlines and residual market rules come from the legislature. A commissioner can propose, bulletin and enforce, not legislate.

Reading a campaign promise against this list is the quickest way to tell a realistic proposal from a slogan.

Examples from state guides

• California. The commissioner is elected under Insurance Code section 12900, for four-year terms limited to two. The elected office sits on top of a strict prior-approval rate law under Proposition 103. The commissioner's regulatory moves, including the changes described in California's Sustainable Insurance Strategy, are therefore politically visible. See California.
• Louisiana and Oklahoma. Both elect their commissioners, and in both homeowners premiums have become a campaign and legislative issue. See Louisiana and Oklahoma.
• North Carolina. The elected commissioner reviews homeowners rate filings that come from an industry rate bureau, a distinctive structure covered in North Carolina's rate bureau and homeowners rates.
• Texas, Florida and New York. Appointed regulators. Texas has a commissioner appointed by the governor. Florida's Office of Insurance Regulation is led by a commissioner chosen through the state's Financial Services Commission. New York's Department of Financial Services is led by a superintendent appointed by the governor. See Texas, Florida and New York.

Why it matters to a homeowner

You do not need a political theory to use this. Three practical points follow.

1. In an election year, the commissioner's race may affect the rules. In an elected state, candidates often campaign on rate increases, nonrenewals and claims handling. Check what they propose against what the statute lets the office do. Many promised remedies need the legislature.
2. Your complaint goes to the department either way. The process is the same whether the office is elected or appointed. See how to file a complaint with your state insurance department.
3. Emergency powers depend on the statute, not the selection method. After a hurricane or wildfire, whether the commissioner can freeze cancellations or extend claim deadlines turns on state law.

How to find who runs your department

1. Open your state's insurance department website; the commissioner's name and biography are on the home or "about" page.
2. Check the page for how the office is filled, or the state's insurance code (often Title 1 or the department's organizing chapter).
3. If the position is elected, find the next election date through your secretary of state.
4. For rate and market news in your state, use the home insurance rules by state and your state guide, which list the regulator's contact details.

Key takeaways

• Eleven states elect their insurance commissioner (as listed in a 2020 roundup); the rest appoint, mostly through the governor.
• The commissioner's power comes from the state insurance code, especially the rate-regulation law, not from how the office is filled.
• Both elected and appointed systems have drawbacks, and no study cited here proves one is better for consumers.
• Complaints and claim help work the same way in either system: through the state department.
• Verify your state's current setup on the department's website before relying on any list.