Government & Regulatory Relations (GRR) recently attended the National Association of Insurance Commissioners (NAIC) Meeting in mid-December.
Members of the Zurich GRR Team engaged with state regulators from across the country on issues such as climate resiliency and sustainability, innovation and technology, cybersecurity, solvency, and other issues of importance to our business. Zurich North America’s Head of Life, Accident & Health, David Fike, also met with the Chair of the Health Insurance and Managed Care (B) Committee, Commissioner Glen Mulready (OK) and other regulators to discuss the importance of supplemental health benefits in the marketplace. Below is a recap of some of the major issues discussed over the course of the event.
Climate Resiliency and Sustainability
During the meeting, multiple committees focused on climate change challenges, including discussions regarding modifications to the financial regulatory framework to address climate-related risks, regulatory review of wildfire models, and examples of climate change mitigation efforts undertaken by a number of states.
Further, stakeholders such as the Center for Economic Justice suggested the conversion of the existing National Flood Insurance Program to a TRIA-like backstop, which would require insurers to offer flood coverage as part of their property and homeowners’ policies—a stance unlike previous positions advocating for mandatory flood coverage as a part of property policies.
Innovation, Technology, and Cybersecurity
The Privacy Protections (H) Working Group announced that they would soon release an initial draft of a new privacy model that would replace both the NAIC Insurance Information Act and Privacy Model Act and the Privacy of Consumer Financial Health and Information Regulation.
Additionally, the Big Data and Artificial Intelligence (H) Working Group plans on issuing a set of model questions concerning insurers’ use and governance of artificial intelligence (AI). After receiving public comments, both issues will be subject to further discussions at the spring and summer meetings. Meanwhile, the Innovation Cybersecurity and Technology (H) Committee received a presentation from a study on the “Feasibility of Transparency and Explainability to Consumers Regarding Adverse Decisions from the Use of Big Data and Artificial Intelligence,” followed by a panel discussion between committee members and the commissioners in attendance. The Innovation Cybersecurity and Technology (H) Committee has also begun work on a model bulletin to act as a regulatory framework on the use of AI. We expect the NAIC to reveal some portions of the bulletin for comment in early 2023, with a final draft to be ready for approval by the December 2023 Fall Meeting.
To allay concerns regarding the acquisition of insurers, the Group Solvency Issues (E) Working Group is drafting a proposal requesting more information from potential acquirers including disclosure of respective acquirer’s economic goals, dividend expectations, and ability to provide additional capital support. In doing so, the Working Group’s proposal thwarts the exploitation of complex holding company structures and the avoidance of regulatory disclosure requirements by insured acquirors in the future.
Discussions with state regulators across the country will continue at NAIC’s next meeting in the Spring of March 2023.
Learn more about Zurich North America-Government and Regulatory Relations’ top priorities here.