Why some state insurance regulators are stricter than others

Insurers can face tougher regulatory oversight in smaller states that have more resources than one might expect, as seen in comparisons of the industry to the state regulators.

Why large states usually have more regulatory scrutiny

States that are larger in terms of geography, population or both may be expected to have greater oversight. When comparing regulatory staffs to the number of insurance companies, this comparison proves correct.

Why some small states have stricter oversight

However, some smaller states have more regulatory resources when compared to the size of the industry in their states. This shows up when measuring state regulators' budgets in comparison to the insurance premiums collected each year.

Governing philosophies influence regulatory strength

When comparing the sizes of regulatory staffs to the amount of premiums collected, the results are less consistent. This measurement reveals that a pro-business approach can bring looser oversight even with more available resources, as in Delaware.

Conversely, a pro-business approach attracting a certain subset of the industry can make that state's oversight stronger, especially when a regulator gets more personnel to focus on that segment, as seen in Vermont.

In other cases, the size of the insurance industry in a large state eclipses the regulator's budget by a large margin — as seen in Massachusetts and Minnesota.