Resilient regulatory systems in a world of complexity

The U.S. system of state-based insurance regulation has existed for over 150 years, and its state-based foundation is an anomaly in financial services regulation. The resilience of state-based regulation is due to its decentralized structure, which prioritizes experimentation, coupled with the collaboration fostered through the NAIC, which creates the foundations for efficient intervention when necessary. This balance is well-suited to regulating insurance markets, which are best described as complex adaptive systems.