What is the primary purpose of statutory insurance laws in the United States?

The primary purpose of statutory insurance laws in the United States is to regulate the insurance industry and ensure consumer protection. These laws are designed to oversee insurance companies and their practices, ensuring they operate fairly and transparently. By providing a framework for insurance operations, statutory laws help safeguard consumers from unethical practices and financial instability within the industry. They establish guidelines for how companies must conduct business, including capital requirements, licensing, and the handling of claims, thus promoting a stable market where consumers can receive the benefits of the insurance they purchase with confidence.

While promoting competition among insurance companies is a positive effect of regulation, it is not the primary purpose of these laws. Limiting the number of insurance policies or establishing minimum coverage levels may be components of specific regulations, but these are not the overarching goals of insurance statutes. The primary focus remains on consumer safety and industry oversight, ensuring that those purchasing insurance are treated fairly and have access to benefits as promised in their policies.