States have surrendered much of their power to a private organization with almost no transparency. New Mexico’s Insurance Superintendent Alice Kane recently told state lawmakers that insurers declined to renew more than 6,200 homeowner policies in 2025, the highest number ever. The reflex is to blame greedy insurers and actuaries in Hartford, Conn., pricing wildfire risk in counties they couldn’t find on a map.

The nonrenewal crisis got New Mexicans to look closely at their insurance market for the first time in years. That market, it turns out, is strange. Many rules governing it weren’t written in Santa Fe, or in Hartford, or by anyone accountable to voters. They were written in Kansas City, Mo., by a private nonprofit.

Americans paid more than $3 trillion in premiums in 2025 for property and casualty, title, life, accident and health insurance. In most cases, insurers don’t answer to federal regulators, because Congress largely leaves insurance to the states. The states built a kind of clearinghouse to determine standard formulas such as how much capital an insurer must hold against every asset on its books. All 50 states participate in the same arrangement. Welcome to the National Association of Insurance Commissioners (NAIC).

The Government Accountability Office reported in June that the NAIC committee responsible for accrediting state insurance regulators doesn’t make its accreditation findings public. Accreditation determines whether other states will accept a state’s solvency examinations and, in practice, places intense pressure on legislatures to enact specified model laws. The deliberations happen in a room a state resident can’t enter and produce a record he can’t read.

New Mexico’s insurance code now requires insurers to file forms “prescribed by the national association of insurance commissioners,” replacing the previous “provided by the superintendent” language. Lawyers call this dynamic incorporation by reference: when a statute adopts an outside body’s manual as it currently stands, the next revision can alter binding obligations without a vote or a governor’s signature. Daniel Schwarcz of the University of Minnesota Law School argued in a 2018 paper that this arrangement violates nondelegation principles in every state constitution. The GAO report found no wrongdoing but noted the NAIC’s governance and financial information is comparable to what an IRS Form 990 collects.