What is the primary function of the National Association of Insurance Commissioners (NAIC)?

The primary function of the National Association of Insurance Commissioners (NAIC) is to coordinate regulation among the states. The NAIC is an organization composed of state insurance regulators from the United States, and its main role is to develop standards and guidelines that help ensure a consistent regulatory framework for insurance across different states. This facilitates cooperation and information sharing among states, allowing them to effectively address issues like solvency, market conduct, and consumer protection.

By fostering uniformity, the NAIC helps to prevent regulatory arbitrage, where insurance companies might seek out states with more lenient regulations to operate. This coordination ensures that all states uphold similar standards in the insurance market, benefiting both regulators and consumers.

The other options do not accurately describe the NAIC's primary function. Providing insurance to low-income families pertains more to social programs rather than regulatory coordination. Setting premium rates is a market-driven process and not within the NAIC’s purview, as rates can vary widely due to competition and individual risk assessments. While profitability is a concern for insurance companies, ensuring their profitability is not a regulatory objective; instead, the focus is on ensuring compliance and fair practices within the industry.