Which act empowers US states to regulate their own insurance industries?

The McCarran-Ferguson Act is fundamental in shaping how the insurance industry is regulated in the United States. This act, passed in 1945, grants individual states the authority to regulate their own insurance companies and practices, even if federal laws exist. This means that, while the federal government can influence the insurance sector, states have the primary responsibility for regulating the business of insurance, including the licensing of insurance providers and the establishment of policy forms and rates. The act also recognizes that insurance is a matter of local concern and allows states to impose their own regulations that best meet the needs of their residents.

In contrast, the other options, while important pieces of legislation, do not pertain specifically to insurance regulation. The Glass-Steagall Act primarily dealt with separating commercial and investment banking and was a response to the financial crises of the early 20th century. The Gramm-Leach-Bliley Act repealed parts of the Glass-Steagall Act to allow for affiliations among banks, securities firms, and insurance companies. The Insurance Company Regulation Act is not widely recognized and does not carry the significance of the McCarran-Ferguson Act regarding state regulation of insurance.