What is true regarding the National Association of Insurance Commissioners (NAIC)?

The National Association of Insurance Commissioners (NAIC) serves as a collective of state insurance regulators from the United States. Its primary roles include coordinating regulatory standards among states, sharing information, and developing model laws and regulations for state insurance departments.

The assertion that NAIC has no legal authority over insurance regulation is correct. The NAIC functions as a supportive body for state insurance commissioners, providing guidance and recommendations, but it does not have the power to enforce laws or regulations. Each individual state maintains the ultimate authority over its own insurance laws and has the discretion to adopt or reject the model laws and standards proposed by the NAIC. This decentralized structure allows states to adapt their insurance regulations to meet local needs and circumstances, although it also means that the NAIC cannot compel states to follow its recommendations.

In contrast, the other options imply a level of authority or requirement that does not align with NAIC's true role. The NAIC does not set law or policy directly and cannot mandate involvement from state commissioners or their legislatures. As such, the correct understanding of the NAIC is that it provides a collaborative platform for insurance regulators rather than exercising direct legal authority.