What is the primary purpose of state insurance departments?

The primary purpose of state insurance departments is to regulate insurance providers. This regulatory role encompasses overseeing the operations of insurance companies to ensure they operate fairly, transparently, and in accordance with state laws. Insurance departments set standards for how insurers conduct business, ensure they have sufficient financial reserves to pay claims, and protect consumers from unfair practices. By regulating the industry, these departments help maintain stability and confidence in the insurance market.

In this context, while managing claims processing, selling insurance, or creating insurance policies are part of the broader insurance landscape, they do not fall under the primary function of the state insurance departments. Their focus is specifically on regulation and oversight, which is crucial for maintaining consumer protection and market integrity.