What is the purpose of "statutory requirements" in insurance regulation?

The purpose of statutory requirements in insurance regulation is to ensure that insurance practices protect policyholders and maintain market integrity. These requirements are legally mandated guidelines that govern how insurance companies operate. This includes regulations designed to safeguard the financial stability of insurance companies, ensuring they can meet their future obligations to policyholders.

By establishing these requirements, regulators aim to foster trust in the insurance market, which ultimately benefits consumers. Various laws and regulations address issues such as licensing, financial solvency, rate-setting, and fair treatment of customers, all of which contribute to a secure and competitive insurance environment. This serves to protect consumers from potential excessive risk-taking by insurers and helps ensure that claims will be paid when they arise.

While certain options may suggest benefits like decreasing premiums or simplifying claims, these are not the primary purpose of statutory requirements. They may occur as secondary effects but do not define the primary intent of regulation, which focuses primarily on consumer protection and maintaining the integrity of the insurance marketplace.