Which of the following is NOT a purpose of insurance regulation?

The purpose of insurance regulation encompasses various critical functions aimed at protecting consumers and ensuring the integrity of the insurance market. Among these, monitoring fraudulent claims serves to maintain trust in the insurance system by deterring dishonesty and abusive practices. Ensuring fair pricing is another mandate of insurance regulation, which involves overseeing that the rates insurers charge are adequate, not discriminatory, and reflective of the risks being insured.

Protecting policyholder interests emphasizes the regulatory goal of safeguarding consumers, ensuring that they receive necessary information about their coverage, services, and rights. This regulation helps to maintain fairness in transactions between consumers and insurers, enhancing overall market stability.

In contrast, prohibiting insurance-rating is not a function of insurance regulation. The insurance-rating process is essential for determining premiums based on the risk associated with insuring an individual or entity. Instead, regulations focus on ensuring that the ratings used are fair, clearly justified, and not discriminatory, rather than outright banning the practice. This distinction clarifies why prohibiting insurance-rating does not align with the primary objectives of insurance regulation.