State Adoption of Model Insurance Codes: An Empirical Analysis

What are the patterns of adoption of NAIC model insurance actsamong the states, and what explains the differences in stateresponse? This article provides an empirical analysis of thesequestions. State responses are analyzed comprehensively andfunctionally; two core regulatory functions—financialregulation and consumer protection—receive specific attention.The article then examines three types of explanations suggestedby the literature on model-code adoption: broad socioeconomicforces, narrow interest-group pressures, and the nature of publicinstitutions (specifically the legislature and the state insurancedepartment). The interest-group model is the most powerful,but the results it produces challenge the traditional view ofthe politics of insurance regulation.