To State the Obvious, There Is No One Way 50 Different States Craft Policy
By Katie Dzurec
Director, Public Policy Outreach (State)
(05/13/25)
At the 40,000-foot level, there is nothing but similarities between the federal and state policy processes. So if you’re still humming “I’m Just a Bill” (after Ted Gotsch’s February primer on the federal process), you can stick with it.
State legislatures function much like Congress. A bill is drafted and submitted, assigned to a committee or committees, is debated and amended and ultimately goes before the full legislature for a vote, and is then presented to the governor for active or passive approval or a veto. As long as these steps go smoothly, the bill becomes law. The same is true with rulemaking—if all goes well, a regulation is proposed, public comments are received and evaluated, and a final rule is published.
Alas, the road that state bills and regulations travel tends to get bumpy.
Legislation to Law
Ideas for legislation at the state level may come from many sources, including the governor’s office, state agencies, individuals (members of the legislature, or members of the public), and the language itself may come from various places. State insurance codes, for example, may be informed by model laws from the National Association of Insurance Commissioners (NAIC) or the National Council of Insurance Legislators (NCOIL). The insurance department itself may draft legislative language, leveraging feedback and insights from staff and other stakeholders.
Whatever the source, the intent behind any piece of legislation typically stems from a need or concern that has been identified, such as concerns related to federal preemption or the need to fix an issue or gap in coverage identified by industry partners or consumers. Regardless of which state is considering the bill or the source of the content and identified issue, once submitted by a legislator, the bill will be assigned to a committee.
Committee jurisdiction isn’t uniform across states or even across chambers, just like at the federal level. Both the committee process and the committees themselves vary. For example, one state may assign a proposed legislation on health care to a Joint Standing Committee on Health Coverage, Insurance and Financial Services, while another state may refer the same proposal to the House Insurance Committee and the Senate Committee on Insurance and Labor. What the committee can do with the legislation will also depend on the state.
The most important part of the committee process is where and when the public can engage. Subject matter experts share insights with committee members through testimony and legislators can ask experts questions and leverage other interactions and resources to gather additional details that are used to inform and potentially change the final proposed language. The committee process allows amendments (changes to the original bill) and redrafting to occur, and then the legislation can “move out” of committee following a vote. Or not.
In many states, a committee may choose to take no action, in which case the legislation goes nowhere and effectively dies, meaning it would need to be re-introduced for full consideration in a future legislative session. In contrast, other states require that every piece of legislation must receive a pass or no-pass recommendation from its assigned committee.
When a committee does report a bill out, the bill is set before the full chamber (the entire state Senate, for example) for discussion, potential debate, and a vote. A favorable vote means the bill goes to the other chamber for consideration and further action. The only exception in this process is Nebraska, which has a unicameral legislature. Depending on the individual state’s legislative structure, it is likely that the proposal will then repeat the process of discussion, public hearings, amendments, and a committee vote before going before the full chamber for discussion, potential debate, and a vote.
Just as in the federal legislative process, both state legislative chambers must agree on the final version of the bill—which means if the second chamber added any amendments or changed the proposed language, the original chamber must consider those changes and vote to approve the final language. If they cannot agree, all states provide a process that is intended to help broker agreement between the two sides. If they cannot agree, the bill fails and will need to be reintroduced and reconsidered in future legislative sessions. If the two chambers do agree, the proposed legislation is sent to the governor’s desk.
The governor’s options are pretty uniform across the states: sign the bill into law, veto the bill, or take no action. But, again, the devil is in the details. Whatever action the governor takes is like another choose-your-own adventure prompt, since states vary in default effective dates, veto processes (most states allow a line-item veto, but some do not), veto override requirements, and what no action means. In some states, no action taken by the governor results in a “pocket veto,” which essentially kills the bill, while in other states, if the governor takes no action within a certain timeframe, the bill automatically becomes law.
State Rules and Regulations
Just as at the federal level, state rules and regulations are used to implement or clarify legislation that has become law. In many cases, state law not only grants a specific agency the authority to promulgate regulations, but may mandate it. The process is largely like the federal process—a proposed rule is drafted, public comments are sought on the draft, those comments are then reviewed and the proposal is potentially revised, and the rule is finalized.
The individual steps in the process, along with the timeline, may differ dramatically from state to state. In many states, after proposed legislation becomes the law, an agency may put out a request for information to help collect information from stakeholders, industry partners, subject matter experts, and consumer advocates. Agency staff may draft the proposed language or the state agency may opt to base their proposed rule on NAIC model regulations.
Once the language has been drafted, the agency will then ask for public comment. In addition to accepting written comments, many states hold hearings during which members of the public can present comments for consideration. Following the public comment period, the agency will then reflect upon the comments received, potentially edit and revise the proposed regulation, and then ultimately finalize and publish the new rule.
Just like the federal process, state policymaking processes are not always easy to follow, no matter what School House Rock may have told us. One distinction between the two is the enhanced engagement and opportunity to provide feedback on proposed language at the state level.
While the processes themselves tend to be a quicker timeline at the state level, there is also a greater opportunity to provide feedback, context, suggestions, and insight directly to the policymakers who are making these crucial decisions. When we consider how integral state oversight and regulation of the insurance industry really is, it becomes even more vital that actuaries and the Academy remain engaged, aware of, and fully participatory in the state policymaking process.