What are interstate compacts?
Interstate compacts are contracts between states that allow them to cooperate on multi-state or national issues while retaining local control. Interstate compacts are mentioned specifically in the U. S. Constitution. Although they historically have been used to address border disputes and water rights, the use of interstate compacts has expanded significantly in recent decades to cover tax issues, drivers’ licensing and vehicle registration, environmental issues, emergency management and other issues. Over 200 interstate compacts currently exist, and every state belongs to at least 14 compacts. What is the reason for the insurance compact? The compact promises to preserve the state system of insurance regulation against federal encroachment while raising insurance product standards, improving the quality of product review, and giving companies the regulatory efficiency that they need to compete in the modern marketplace. Insurance is now part of the integrated financial marketplace, an
