How often is a domestic headquartered insurance company audited by the Commissioner’s office?

The correct answer is that a domestic headquartered insurance company is audited by the Commissioner’s office every five years. This interval is established to ensure that insurance companies maintain financial soundness and comply with state regulations without overwhelming them with too frequent audits. Audits serve to protect policyholders by ensuring that insurers are managing their financial practices responsibly and adhering to legal requirements.

The five-year cycle strikes a balance between regulatory oversight and operational efficiency for insurance companies. More frequent audits could lead to excessive administrative burdens, while longer intervals might not adequately safeguard consumer interests. By setting this five-year timeframe, regulators can effectively monitor the industry while allowing companies sufficient time to implement the necessary practices to remain compliant.