Government & Regulatory Relations (GRR) recently attended the National Council of Insurance Legislators (NCOIL) Summer Meeting.
The Property & Casualty Insurance Committee continued discussion of several model acts, including: the NCOIL Delivery Network Company (DNC) Insurance Model Act; the NCOIL Dog Breed Insurance Underwriting Study & Breed Protection Model Act; and the NCOIL Insurance Underwriting Transparency Model Act. Discussions will continue during interim Committee calls so that votes on each model can be held at the NCOIL November Annual Meeting. Given that Zurich writes coverage for DNCs, we will continue our engagement with the industry coalition, which includes insurers, DNCs and trade associations, to ensure the model act reflects Zurich’s business interests.
The meeting included a session on the Federal Insurance Office (FIO) priorities. Steven Seitz, Director of FIO highlighted the state progress on implementation of the reinsurance collateral provisions contained in the EU-US Covered Agreement. Director Seitz indicated that climate change is FIO’s top priority and that FIO is looking to assess whether there are any gaps in regulation and supervision of climate-related risks that may be adversely affecting the insurance system. Regarding climate-related data, FIO is assessing the availability of state-level data to analyze the impacts of climate-related risks on disadvantaged and vulnerable communities.
Eight regulators from the following jurisdictions participated in the NCOIL – NAIC Dialogue: Director Lori Wing-Heier (AK), Commissioner Trinidad Navarro (DE), Commissioner John King (GA), Director Dean Cameron (ID), Commissioner Kathleen Birrane (MD), Commissioner Marlene Caride (NJ), Commissioner Glen Mulready (OK), and Acting Commissioner Mike Humphreys (PA).
Commissioner Birrane (MD) provided extensive remarks on the issue of algorithmic accountability and the activities of the NAIC’s newly formed Innovation, Cybersecurity, and Technology (H) Committee. She noted the importance of collaboration with industry and that the Committee has established a collaboration forum as it considers proxy discrimination and algorithms. Specifically, she said the Committee was focused on algorithmic bias, including what it is, how it can lead to illegal discrimination, and where it exists in the insurance ecosystem. The Committee expects to share related work products by the December 2022 NAIC Fall National Meeting.
The meeting included a general session on social inflation, i.e., the recent trend of increased litigation awards outpacing economic inflation and leading to higher loss costs. Zurich has undertaken a proactive strategy, in conjunction with our national trade associations and other industry stakeholders, to combat the adverse effects of social inflation.