Highlights
Background
The National Association of Insurance Commissioners (NAIC) is a private, tax-exempt group made up of state insurance regulators. It writes model laws for states to adopt, runs the accreditation program that decides which regulators its peers will trust, and operates the data systems insurers are legally required to use.
In June 2026, the Government Accountability Office (GAO) released a report on the NAIC, requested by House Ways and Means Chairman Jason Smith. While the report is careful in its tone, the findings are not.
Finding #1: NAIC doesn’t file an IRS Form 990, while other similar tax exempt groups do.
GAO found that NAIC has not filed an IRS Form 990 disclosure since 1955, on the theory that it is exempt from filing as a “wholly-owned instrumentality of the states.” According to GAO, several similarly-situated policy groups which do comparable work – the Conference of State Bank Supervisors, the North American Securities Administrators Association, and the Money Transmitter Regulators Association are all required to file a Form 990. But NAIC doesn’t.
Since Eisenhower was president, NAIC has operated with less public financial transparency than most local nonprofits. NAIC’s position is that it’s governmental enough to skip disclosure but private enough to skip accountability. It cannot be both. Tax exemption should not mean transparency exemption.
Finding #2: NAIC provides no transparency on executive compensation.
GAO found that NAIC does not publicly disclose CEO or executive compensation. Michigan is the one exception: state law requires NAIC to report it there. Michigan gets executive compensation transparency. The American public does not.
So the people paying the bills aren’t allowed to see who’s cashing the checks.
Finding #3: NAIC’s accountability policies exist. You just can’t read them.
According to GAO, NAIC’s conflict-of-interest policy covers its member commissioners but not its own CEO or senior staff. GAO learned that an employee version exists, buried in a non-public handbook. GAO found no public whistleblower policy and no public document retention policy. The IRS identifies both as basic governance practices for tax-exempt organizations.
NAIC expects transparency from insurers while failing to be transparent itself. An organization charged with writing governance standards for a massive industry should not hide something as simple as its own accountability policies. Elected officials are accountable to their constituencies, but the same cannot be said for NAIC.
Finding #4: The regulated pay the regulator’s bills
GAO found that about 94 percent of NAIC’s 2024 revenue came from insurance company fees: filing fees, database fees, valuation fees, data sales. The industry writes the checks. NAIC writes the standards.
The problem is not corruption, but rather structure. When an organization is funded almost entirely by the entities its standards govern, the appearance problem is unavoidable.
Finding #5: The “regulator-only” problem
GAO found that while some NAIC meetings are open to the public, others aren’t. Accreditation findings, the reviews that determine whether a state regulator meets NAIC’s standards, are never made public, and the deliberations happen among regulators only.
The more consequential the decision, the less transparent the process. If accreditation is powerful enough to shape state law, it’s important enough to be transparent.
The Big Picture
No single finding here is disqualifying alone. Together: A private organization, exempt from IRS disclosure, funded by the industry it regulates, silent on executive pay and governance, deciding accreditation behind closed doors, shaping insurance regulation in all 50 states.
GAO has now handed Congress and the IRS independent grounds to act. NAIC should voluntarily publish Form 990-equivalent disclosures. Congress should revisit a 70-year-old exemption granted long before NAIC became the regulatory force it is today.
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