How often must examinations of admitted insurance companies be conducted?

Insurance companies that are admitted to operate in Indiana and other jurisdictions are subject to regular examinations to ensure their financial health and compliance with state regulations. The correct frequency for these examinations is at least once every five years, which is designed to uphold the integrity of the insurance market and protect policyholders.

Conducting examinations every five years allows regulators to adequately assess the ongoing solvency, business practices, and risk management of insurance companies. This timeframe strikes a balance between thorough oversight and the operational realities of insurance companies. Companies must remain financially stable and adhere to standards set forth by state laws, and these examinations play a critical role in that process.

In contrast, examinations every year or every three years might not be necessary for all companies, as some may be stable and compliant, while others may require more frequent oversight based on their specific circumstances.

The option of conducting examinations only as deemed necessary implies a more reactive approach, which could lead to lapses in oversight. Regular scheduled examinations establish a routine check to prevent any potential issues from escalating, thereby fostering a healthier insurance market.