Insurance Regulatory Information System
What Does Insurance Regulatory Information System Mean?
The Insurance Regulatory Information System (IRIS) is a tool developed by the National Association of Insurance Commissioners (NAIC) to help states assess the financial health of insurance companies. Regulators primarily use IRIS to monitor insurance companies, ensuring they are not at risk of insolvency, which could result in large numbers of people losing their insurance coverage.
Insuranceopedia Explains Insurance Regulatory Information System
Designed to improve the efficiency of insurance regulation, IRIS primarily consists of databases and analytical tools. It processes the financial information that insurance companies are required to submit and calculates various ratios aimed at assessing liquidity and solvency. IRIS sets acceptable ranges for these ratios, and companies falling outside these ranges may be placed under the supervision of their local regulator. However, an insurance company might fall outside acceptable ranges for one or more ratios without facing financial difficulties, as some factors may be beyond their control. Overall, IRIS reports supplement each state’s database, providing insights into how insurance companies perform relative to one another.
