What regulations protect policyholders?

First, state insurance regulators apply more conservative accounting requirements by not allowing certain assets to be included in capital and surplus. Second, many states have implemented investment limitations to reduce exposure to a single issuer by limiting or preventing risky types of transactions. Lastly, in addition to regulatory reviews, insurers must undergo annual independent audits. State regulators monitor the risk of insurers at least quarterly and more for at-risk insurers.