The Securities and Exchange Commission has statutory authority over accounting standards used by publicly traded companies traded on U.S. exchanges. Under the direction of the SEC, the Financial Accounting Standards Board (FASB) develops U.S. Generally Accepted Accounting Principles (GAAP). U.S. Statutory Accounting Principles (SAP) utilizes this framework but there are distinct differences between the two, including SAP's focus on solvency regulation. The FASB sets standards based on their conceptual framework and offer guidance on how to implement these standards. The mission of the Financial Accounting Standards Board (FASB) is to establish and improve standards of financial accounting and reporting that provides decision-useful information to investors and other users of financial reporting. All authoritative GAAP is reviewed and considered by the NAIC's Statutory Accounting Principles Working Group for statutory accounting. The GAAP guidance can be adopted; adopted with modification; or rejected for statutory accounting purposes.
The International Association of Insurance Supervisors (IAIS) is a standard-setting organization comprised of the primary insurance regulator from countries around the world. The U.S. is represented by certain states as appointed by the NAIC and by the Director of the Federal Insurance Office (FIO). The role of the IAIS grew in the wake of the financial crisis as more emphasis was placed on a perceived need to establish global rules related to financial regulation of insurance companies. The primary work product of the IAIS takes the form of something called the Insurance Core Principles, which seeks to establish best practices for insurance regulators to review and perhaps adopt in their home jurisdiction. NAMIC advocacy staff are routinely engaged in IAIS working-group and committee meetings and represent the interest of NAMIC members through comment letters and testimony.
The National Association of Insurance Commissioners (NAIC) is a self-described standard setting organization comprised of the primary insurance regulator from all 50 states (plus, Washington DC, Puerto Rico, Guam and American Somoa). The NAIC creates model laws and regulations on all aspects and lines of insurance. Further, the NAIC serves as a quasi-regulatory body as it relates to financial regulation and has established an accreditation program whereby a state earns accreditation status by enacting certain NAIC model laws. This authority requires NAMIC advocacy staff to constantly be engaged in the NAIC process at all levels. NAMIC staff represent member interests at the three in-person National meetings the NAIC hosts and numerous interim conference calls and working-group meetings.