The big NAIC accounting news in March was the announcement of the completion of the Principles-Based Bond Project. All of the Statements of Statutory Accounting Principles (SSAPs) have been revised and are ready to go for 2025. At least until they need to be revised! In addition, the NAIC decided to slightly change its National Meeting format by moving the time slot for the joint meeting of the Executive Committee and Plenary to the last time slot of the third day, instead of having it be the only meeting on the morning of the fourth day. Afterward, the NAIC sent out a survey to attendees asking for opinions on the format change. Time will tell if that time slot becomes the new normal. There was a lot of NAIC-related activity that happened in March, mostly centered around the NAIC’s Spring National Meeting.
Blanks Working Group (BWG) – March 4, 2024 via email
BWG released four additional blanks exposures for comment via email. Those items were:
| Reference # | Subject | Disposition |
|---|---|---|
| 2024-07 | Updates Notes to Financials #5S(A) to add separate accounts to the net negative Interest Maintenance Reserve (IMR) disclosure; adds new general interrogatory attestation for separate accounts for the Life/Fraternal statement. | Exposed for comment through April 23, 2024. |
| 2024-08 | Provides Asset Valuation Reserve (AVR) & IMR instructions covering allocation guidance for debt security NAIC Designation changes, as well as changes to mortgage loans and perpetual preferred stock for Life/Fraternal statement. | Exposed for comment through April 23, 2024. |
| 2024-09 | Adds a Note to Financials #5T to report the aggregate collateral loans by qualifying investment collateral to all statements. | Exposed for comment through April 23, 2024. |
| 2024-10 | Removes disclosures for the Affordable Care Act (ACA) transitional reinsurance program and the risk corridors program from Notes to Financials 24E (L/H), and 24F (P/C). | Exposed for comment through April 23, 2024. |
All of the proposals have a suggested implementation of December 31, 2024 and, therefore, will be considered for adoption at the next BWG meeting on May 23, 2024.
The remainder of the meeting summaries are all from the NAIC Spring National Meeting.
Life Actuarial Task Force (LATF) – March 14 and 15, 2024
LAFT begins its meetings days before the official start of the NAIC National Meetings. During this time, the Task Force adopted and/or received reports from its various working and subgroup groups. AAT (Asset Adequacy Test) Reinsurance Exposure 031724 was released for a 60-day comment period, ending May 17, 2024. The exposure proposes a requirement for asset adequacy analysis using a cash flow testing methodology for life and annuity reinsurance transactions. The proposal can be found on LATF’s webpage.
NAIC/Consumer Liaison Committee – March 15, 2024
One of the charges of this group is to oversee the NAIC’s Consumer Participation Program (Program). During this meeting, the Committee discussed the Program’s 2024 budget, discussed changes to the consumer representatives’ application, and suggested changes to the Plan of Operation for the Program. The Committee heard presentations on the following topics:
- Uninsured American homes
- How insurance companies exploit consumer protections acts
- Tips for consumers to use when buying property insurance
- The new Section 1557 of the ACA
- CMS inoperability, the prior authorization rules, and other federal updates
Risk-Focused Surveillance Working Group – March 16, 2024
The meeting began with a report from the Affiliated Investment Management Agreement Drafting Group regarding its work on affiliated investment management agreements, capital maintenance plans, ownership structures of insurers, and surplus note issuance. All of these topics were the result of a 2022 referral from the Macroprudential Working Group. The Drafting Group referred issues related to capital maintenance agreements and surplus notes to the Financial Analysis Solvency Tools Working Group, developed an annual statement interrogatory proposal clarifying that insurers should disclose investment sub-advisors in their response to General Interrogatory #29.05, and crafted suggested edits to the NAIC’s Financial Analysis Handbook and Financial Condition Examiners Handbook containing additional guidance on reviewing affiliated investment management agreements and services provided to insurers. The Working Group then exposed the proposed edits to the two handbooks for a 45-day comment period ending April 30. The meeting ended with a discussion of plans for 2024 Peer Review Program sessions.
Statutory Accounting Principles Working Group (SAPWG) – March 16, 2024
What appeared to be a very full agenda didn’t take near the two hours allotted to the meeting. The meeting followed its normal course, with items that had previously been exposed addressed first, followed by new items. Here is a brief synopsis of that activity.
| Reference # | Subject | Disposition |
|---|---|---|
| 2019-21 | Revisions cover accounting for debt securities that do not qualify as bonds under the new bond definition and provide new measurement methods for residual interests to SSAP No. 21R – Other Admitted Assets. | Adopted effective January 1, 2025; however, the measurement method guidance for residuals may be adopted for 2024. |
With the above adoption, SAPWG announced the completion of the Principles-Based Bond Definition project—at least for 2025 implementation. Those who work in statutory accounting and reporting know the affected SSAPs are bound to be revised soon. To make this transition beginning January 1, 2025, interested parties (IPs) have been having a series of weekly meetings to exchange information and compile a list of questions for submission to the NAIC staff for clarification. These meetings will continue at least until the end of this year.
| Reference # | Subject | Disposition |
|---|---|---|
| 2022-12 | Nullification of INT 03-02: Modification to an Existing Intercompany Pooling and revisions to SSAP No. 25 – Affiliates and Other Related Parties and SSAP No. 63 – Underwriting Pools addressing transfers of assets when modifying intercompany pooling arrangements. | Re-exposed for comment through May 31, 2024. |
This nullification of INT 03-02 has been in the works for over a year now. Industry had expressed some concerns over the nullification, which now seem to have been addressed.
| Reference # | Subject | Disposition |
|---|---|---|
| 2022-14 | SSAPs No. 93R – Low-Income Housing Tax Credit Property Investments, 94R – Transferable and Non-Transferable State Tax Credits, 34 – Investment Income, and 48 – Joint Ventures, Partnerships and Limited Liability Companies were revised to update guidance on the handling of tax credit investments. | Adopted effective January 1, 2025. |
These revisions expand the scope of tax credit investments and are considered a new accounting concept. A proposal for annual statement reporting changes will be prepared and sent to BWG for future reporting and a referral also will be sent to the Life Risk-Based Capital (RBC) Working Group. NAIC will be drafting an issue paper documenting the work done.
| Reference # | Subject | Disposition |
|---|---|---|
| 2023-25 | Rejection of Accounting Standards Update (ASU) 2023-03 – SEC Updates, as not applicable to statutory accounting. | Rejection adopted effective immediately. |
| 2023-26 | Suggested SSAP No. 15 – Debt and Holding Company Obligations and SSAP No. 103R – Transfers and Servicing of Financial Assets and Extinguishments of Liabilities revisions would add certain disclosures from ASU 2023-06 on unused commitments, lines of credit, securities lending, repurchase agreements, and reverse repurchase agreements. | Exposed for comment through May 31, 2024. |
| 2023-27 | Rejection of ASU 2023-04 – SEC Updates – Crypto as not applicable to statutory accounting. | Rejection adopted effective immediately. |
| 2023-29 | Clarifies the IMR/AVR handling for preferred stock. | Adopted effective immediately. |
The above adoption does not change any accounting in the Accounting Practices and Procedures (AP&P) Manual but will result in a revision to the Life/Fraternal Annual Statement Instructions being submitted to BWG. The revisions specify that gains/losses from perpetual preferred stock, including SVO-Identified Preferred Stock ETFs, and mandatory convertible preferred stocks (regardless of whether redeemable or perpetual) are captured in the AVR, not the IMR.
| Reference # | Subject | Disposition |
|---|---|---|
| 2023-30 | Wording in SSAP No. 97 – Investments in Subsidiary, Controlled and Affiliated Entities (SCA entities) was revised to align all references to admissibility of SCAs and downstream noninsurance holding companies. | Adopted effective immediately. |
| 2023-31 | Incorporates language from Model 630 – Mortgage Guaranty Insurance into SSAP No. 58 – Mortgage Guaranty Insurance and Appendix A-630 – Mortgage Guaranty Insurance. | NAIC staff to work on needed revisions for future consideration. |
| 2024-01 | Re-exposure of SSAP No. 26R – Bonds revisions providing guidance for the reporting of collateral loans on Schedule BA. | Exposed for comment through May 31, 2024. |
The above exposure included a specific request for comments from regulators and industry regarding the types of debt securities issued by funds that should be considered as operating entities, and suggested language to define the extent of debt that may be issued to fund operations.
| Reference # | Subject | Disposition |
|---|---|---|
| 2024-02 | Revisions to SSAP No. 19 – Furniture, Fixtures, Equipment, and Leasehold Improvements and SSAP No. 73 – Health Care Delivery Assets and Leasehold Improvements would adopt ASU 2023-01 with modification. | Exposed for comment through May 31, 2024. |
| 2024-03 | Would adopt with modifications the definition of crypto assets found in ASU 2023-08 – Intangibles – Goodwill and Other – Crypto Assets into SSAP No. 20 – Admitted Assets and clarify that directly held crypto assets are nonadmitted; adoption of this proposal also would nullify INT 21-01 – Accounting for Cryptocurrencies. | Exposed for comment through May 31, 2024. |
| 2024-04 | Will address statutory differences between securities lending and repurchase agreements that should be considered as “conforming agreement” securities lending in SSAP No. 103R. | Exposed for comment through May 31, 2024. |
| 2024-05 | Removes the first sentence of Appendix A – 791 Life and Health Reinsurance Agreements, paragraph 2c, Question and Answer. | Exposed for comment through May 31, 2024. |
| 2024-06 | Proposes revisions to SSAP No. 61R – Life, Deposit-Type and Accident and Health Reinsurance regarding risk transfer analysis on combination reinsurance contracts; resulting from a Valuation Analysis Working Group referral. | Re-exposed for comment through May 31, 2024. |
| 2024-07 | Proposes adding an additional part to Schedule S and Schedule F for the reporting of assets held under a funds withheld arrangement and also identifying MODCO assets. | Exposed for comment through May 31, 2024. |
| 2024-08 | Revisions to several SSAPs provide a consistent definition and accounting and reporting guidance for residuals. | Exposed for comment through May 31, 2024. |
| 2024-09 | Removes some missed language in a previous revision to SSAP No. 2R regarding which types of assets can no longer be reported as cash and/or cash equivalents. | Exposed for comment through May 31, 2024. |
| 2024-10 | NAIC staff directed to work with industry to determine current applications and differences in the reporting of book value assets in separate accounts and possibly develop revisions to SSAP No. 56R – Separate Accounts. | Exposed for comment through May 31, 2024. |
| 2024-11 | Incorporates income tax disclosures from ASU 2023-09 into SSAP No. 101 – Income Taxes, while deleting the required disclosure from paragraph 23b. | Exposed for comment through May 31, 2024. |
| 2024-12 | SSAP No. 27 – Off-Balance-Sheet and Credit Risk Disclosures revisions remove FAS 105 references, specifically notes financial instruments excluded from the SSAP, and updates Note to Financials #16 disclosures for derivatives and non-derivative financial instruments. | Exposed for comment through May 31, 2024. |
| 2024-13 | Updates to SSAP No. 107 – Risk-Sharing Provisions of the Affordable Care Act would remove the transitional reinsurance program and the risk corridor disclosures. | Exposed for comment through April 19, 2024. |
| 2024-14EP | AP&P Manual editorial revisions. | Exposed for comment through May 31, 2024. |
The only proposed editorial revision exposure was to remove the “R” from the title of all previously revised SSAPs. The “R,” indicating substantial revisions to an SSAP had occurred, is considered no longer useful due to the number of SSAPs that have been revised.
The Working Group heard updates on GAAP activity, the work of the IMR/AVR Ad Hoc Subgroup, and the IAIS Audit and Accounting Working Group. In celebration of the AP&P’s 20th anniversary, NAIC staff recognized several regulators that have been part of the development of the AP&P from its inception.
In case you missed the notification, the new 2024 AP&P Manual is now available. Like last year, those subscribing to the Bookshelf online AP&P also will be able to download a corresponding PDF file.
Regulatory Framework Task Force – March 16, 2024
The Task Force adopted the report of the following groups:
- Accident and Sickness Insurance Minimum Standards Subgroup. The Subgroup also reported it is reviewing comments received on the previous exposure of the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (Model #171) and hopes to have a revised draft done by the Summer National Meeting
- Employee Retirement Income Security Act Working Group
- Mental Health Parity and Addiction Equity Acts Working Group
- Pharmacy Benefit Manager Regulatory Issues Subgroup. The 2024 charges for this Subgroup also were exposed for a 30-day comment period. The Task Force wants to expand the scope of the work of the Subgroup to include other entities in the prescription drug system
The American Bankers Association Health Savings Account (HSA) Council provided a presentation on embedded insurance code provisions protecting HSAs. At the conclusion of the presentation, the Task Force was asked to work with state departments of insurance to adopt embedded insurance code provisions to protect HSAs. The meeting ended with information on World Hypertension Day, which is May 17.
Financial Regulation Standards and Accreditation (F) Committee – March 16, 2024
The F Committee announced it had met previously during the Spring National Meeting in a regulator-only session. During that session, it discussed state-specific accreditation issues and voted to continue accreditation of the California and Arizona insurance departments.
Valuation of Securities Task Force (VOSTF) – March 16, 2024
During the meeting, the Task Force discussed comments that had been received on a proposal to revise the Purposes and Procedures Manual of the NAIC Investment Analysis Office (P&P Manual) definition of an NAIC Designation. Also discussed was a proposed P&P Manual revision that would give the Securities Valuation Office (SVO) discretion over NAIC Designations assigned through the filing exempt process. The SVO will continue to work with industry on both proposals. The SVO also will continue to work with IPs on a practical expedient to determine the issue date for private letter rating filings. Two proposed amendments to the P&P Manual were released for a 30-day comment period ending April 17, 2024. One proposal would update the U.S. Government Agency and Other U.S. Government Obligation abbreviations. The second proposal would update references to the SSAPs in the guidance for subsidiary, controlled and affiliated, and related party bond or preferred stock investments. The SVO presented its annual report. NAIC staff updated the Task Force on the collateralized loan obligation modeling methodology, which was scheduled to be in place by year-end 2024. However, at this time it appears the systems are not in place and implementation will most likely have to be delayed until 2025. The meeting wrapped up with a summary of projects SAPWG is working on that could impact the work of the Task Force.
International Insurance Relations (G) Committee – March 16, 2024
The Committee conducted a discussion of international activities related to insurer investing. The discussion included a presentation from the International Monetary Fund and the Bermuda Monetary Authority. Updates on the activities of the International Association of Insurance Supervisors (IAIS) were provided. In addition, updates on other international activities were provided. Activities discussed included recent meetings, events, and speaking engagements with international insurance regulators, developments of the EU-U.S. Insurance Dialogue Project, the NAIC Spring Virtual International Fellows Program, developments at the Organisation for Economic Co-operation and Development, and the Sustainable Insurance Forum.
Risk-Based Capital (RBC) Investment Risk and Evaluation Working Group – March 17, 2024
The Working Group heard updates from the VOSTF and SAPWG regarding work each is conducting that may ultimately affect RBC formulas. The American Academy of Actuaries (the Academy) provided an update on its asset-backed securities RBC project and, in particular, collateralized loan obligations. The Academy’s goal is to complete its work by the Fall National meeting but will be providing more updates during the Summer National Meeting. The Academy also plans to review the Oliver Wyman study on RBC for residual tranches, which was released for comment during the Working Group’s meeting for a 21-day comment period ending April 8, 2024. The Oliver Wyman study was a result of the Working Group’s decision in 2023 to raise the RBC factor for residual tranches to a 45% factor. The study is available on the Working Group’s webpage under the Exposure Drafts tab. (As a reminder, the Working Group previously exposed two other items for comment, which also can be found under the Exposed Documents tab.)
Life Risk-Based Capital Working Group – March 17, 2024
After receiving updates from three of its subgroups, the Generator of Economic Scenarios Subgroup, the Longevity Risk Subgroup, and the Variable Annuities Capital and Reserve Subgroup, the Working Group heard an update on the Academy’s work on its C-3 Risk project. The discussion then turned to repurchase agreements and their RBC treatment. Proposal 2024-03-L was exposed for comment through April 15, 2023. The proposal would reduce the factor to 0.2% for programs that meet conforming program criteria and where the counterparty is rated BBB or higher. All other repurchase agreements would continue with the current 1.26% charge. The meeting ended with a presentation by the Academy on covariance as a possible topic for review. The presentation pointed out that with all the various updates to the formula through the years, the correlation of the different risk components has not been revisited since the formula’s original inception. A later meeting will be scheduled to discuss this issue.
Joint Meeting of Catastrophe Risk Subgroup and Property and Casualty RBC Working Group – March 17, 2024
The following specific items were addressed during the meeting:
| Reference # | Subject | Disposition |
|---|---|---|
| 2023-13-CR | Provides collection of additional data regarding a company’s catastrophe reinsurance program via interrogatories added to the RBC formula. | Adopted effective 2024. |
| 2023-14-P | Removed pet insurance from the inland marine line of business and treats it separately, but R4 and R5 factors will not change at this time. | Adopted effective 2024. |
| 2023-15-CR | Adds reporting for severe convective storm for information gathering only; will not affect the RBC results. | Adopted effective 2024. |
| 2023-17-CR | Would add disclosures of climate conditioned catastrophe exposures for informational purposes only. | Re-exposed for comment through April 8, 2024. |
| 2024-01-P | Changes the data capture format for Schedule P information. | Adopted effective 2024. |
With the annual statement now collecting a full 10 years’ worth of data in Schedule P for all lines of business, data collection for the Property/Casualty RBC formula was changed. Pages PR301 through PR303 were deleted, while more direct vendor links will be used on pages PR111, 112, 113, 114, 121, 122, and PR211, 212, 213, 214, 221, and 222.
| Reference # | Subject | Disposition |
|---|---|---|
| 2024-10-P | Clarifies the reporting of stop-loss health premiums. | Exposed for comment through April 16, 2024. |
| 2024-11-P | Annual review and changes to the underwriting risk factors and investment income factor adjustment. | Exposed for comment through April 16, 2024. |
Both groups adopted their working agendas. Attention was then focused on a discussion of wildfire and convective storm impact analysis.
Accounting Practices and Procedures Task Force – March 17, 2024
This meeting was business as usual. The Task Force adopted its previous meeting minutes, adopted the minutes of the last SAPWG and BWG meetings, and then adjourned the meeting.
Executive (EX) Committee – March 17, 2024
The Committee adopted the report of the joint meeting of EX and the Internal Administration (EX1) Subcommittee, which occurred on the previous day. Some of the actions taken during that joint meeting were the ratification of a memorandum of understanding between the NAIC and the Federal Insurance Office, changing the setting of the 2026 Spring National Meeting to San Diego, and the hiring of a consultant to develop a framework for the regulation of insurer investments project. The reports of three of the Committee’s task forces were adopted: the Climate and Resiliency Task Force, the Government Relations Leadership Council, and the Special Committee on Race and Insurance.
Status reports were received from:
- 2025 Annual Report of the NAIC Designation Program Advisory Board
- Model law development of amendments to:
- Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (#171)
- Unfair Trade Practices Act (#880)
- Insurance Consumer Privacy ProtectionModel Law (#674)
Reports also were received from:
- The National Insurance Producer Registry
- Interstate Insurance Product Regulation Commission
Capital Adequacy Task Force – March 17, 2024
The Task Force adopted the reports of its various RBC working groups. The RBC Purposes & Guidelines Ad Hoc Subgroup, the Asset Concentration Ad Hoc Subgroup, and the Geographic Concentration Ad Hoc Subgroup provided updates of its activities to the Task Force. Because of these reports, the Task Force sent referrals to the RBC Investment Risk and Evaluation Working Group and the Catastrophe Risk Subgroup for additional review of asset concentration and geographic concentration issues, respectively. The Purposes and Guidelines Subgroup was asked to address the issue of the RBC Preamble and the possibility of removing the two current RBC amounts reported in the Five-Year Historical Data in the annual statements.
The following actions on RBC proposals were taken.
| Reference # | Subject | Disposition |
|---|---|---|
| See discussion in the summary for the joint meeting of Catastrophe Risk Subgroup and the Property and Casualty RBC Working Group. | Adopted effective 2024. |
| 2024-02-CA | Amendments to the Health RBC and the Property/Casualty RBC would add a line for separate reporting of residual tranches and apply a 45% factor. | Exposed for comment through April 16. |
| 2024-08-CA | Revisions to the Health RBC and the Property/Casualty RBC remove references to “H0 Component” and “R0 Component” for column 12 of the affiliated worksheet. | Exposed for comment through April 16. |
A referral from the Life RBC Working Group to SAPWG and the Capital Adequacy Task Force was exposed for comment through April 16. The referral addresses accounting differences between repurchase agreements and security lending programs.
A memorandum sent by SAPWG concerning recently adopted collateral loan reporting changes was exposed for comment until May 1, 2024. The memorandum was addressed to the Capital Adequacy Task Force, the Property and Casualty RBC Working Group, the Health RBC Working Group, the Life RBC Working Group, the RBC Investment Risk and Evaluation Working Group, and the Blanks Working Group.
The Health RBC Working Group provided an update on its H2 component project. Since this proposal encompasses the reporting of health insurance, any changes to the Health RBC will have to be reviewed and considered for the health sections of the Life/Fraternal RBC and the Property/Casualty RBC.
Cybersecurity Working Group – March 17, 2024
The Working Group adopted the Cybersecurity Event Response Plan. The Plan provides guidance to state insurance regulators on what actions to take following a cybersecurity event. The discussion then moved to the Working Group’s work plan for 2024, including educational opportunities for regulators, discussions about the cyber insurance marketplace, and the updating of examination standards. Presentations were given by the Academy and CyberAcuView.
Life Insurance and Annuities (A) Committee – March 17, 2024
The A Committee heard an update on the generator of economic scenarios from the Life Actuarial Task Force. The Accelerated Underwriting Working Group reported on its progress in developing a regulatory guidance document. An update from the Annuity Suitability Working Group indicated it will be developing regulatory guidance related to the safe harbor/comparable standards provision of the revised Suitability in Annuity Transactions Model Regulation (#275). At the end of the meeting, the American Council of Life Insurers expressed concerns about the Notice of Proposed Rulemaking affecting bank-owned life insurance that was issued in September 2023 by the U.S. Department of the Treasury, the Federal Reserve System, and the FDIC.
Financial Conditions (E) Committee – March 18, 2024
Beginning bright and early on Monday morning, the E Committee began its meeting by adopting and/or receiving the reports of its various task forces, working groups, and other NAIC groups reporting to it.
The E Committee exposed for comment three papers, all related to the Framework for Regulation of Insurer Investments – A Holistic Review. As a reminder, there were eight recommendations made in the Framework:
- Reduce or eliminate blind reliance on credit rating providers.
- The NAIC retains the ability to perform individualized credit assessments through the SVO.
- Enhance the SVO’s portfolio risk analytics capabilities.
- Enhancement of structured asset modeling capabilities.
- Establish a broad policy advisory function under the direction of regulators.
- An investment working group that acts in an advisory capacity to the E Committee’s various investment items.
- Reorganize and rename the SVO and VOSTF.
- RBC factor changes in the future should consider market impacts and constancy across asset classes.
The papers exposed for comment are:
- Memo from E Committee to Interested Parties
- Investment Framework as Revised E Committee
- Investment Framework Workplan
The exposure period for all papers ends April 8, 2024. The papers can be found on the E Committee’s web page.
Market Regulation and Consumer Affairs (D) Committee – March 18, 2024
The D Committee adopted a model law development request for the Public Adjuster Licensing Model Act (#228). This will involve amending the current model to strengthen governing standards on the conduct of public adjusters, including those acting in an unlicensed capacity and excessive fees. Revisions to the Product Filing Review Handbook were adopted and incorporated best practices for review of predictive models. The committee adopted the reports of its task forces and working groups. A presentation on readability and plan language standards in state insurance laws was given. Included was a request for the NAIC to evaluate the readability level of its model laws. A second presentation covered unlicensed entities offering protection for packages after they leave the custody of the merchant and the transportation carrier. The report included a request from regulators to clarify that shipping insurance is subject to the same licensing requirements as other types of insurance.
Health Insurance and Managed Care (B) Committee – March 18, 2024
After the Committee adopted or received reports from its various subgroups, working groups, and task forces, it was time for two different presentations. The report on ground ambulances provided information to regulators on understanding the basics of ground ambulance services in the United States. It highlighted the lack of consumer protections in the federal No Surprises Act from receiving surprise bills for these services. The next presentation highlighted the proposed nondiscrimination rule to the ACA’s Section 1557 from the consumer’s perspective. The final discussion of the meeting was an update from the federal Center for Consumer Information and Insurance Oversight on its recent activities.
Innovation, Cybersecurity and Technology (H) Committee – March 18, 2024
Much of the focus of this committee was artificial intelligence (AI). After adopting task force and working group reports, the H Committee heard a presentation from Uber and the Casualty Actuarial Society on working with AI and machine learning. NAIC staff provided an update on federal, state, and international activities related to AI. DLA Piper provided a presentation on international activities related to AI.
Property and Casualty Insurance (C) Committee – March 18, 2024
Like the rest of the “lettered” committees, the C Committee adopted the reports of its task forces and working groups. The group then heard presentations on ways to educate consumers about homeowners’ insurance and parametric products. Parametric insurance solutions pay a pre-established amount based on the occurrence of a physical event with certain characteristics. It covers the probability of a predefined event happening instead of indemnifying an actual loss incurred and can be paired with traditional indemnity insurance. The meeting ended with an update on the state insurance regulator property/casualty market intelligence data call, which was distributed to relevant insurers on March 8 and is due June 6.
Joint Meeting of Executive Committee and Plenary – March 18, 2024
This is always the last session of the NAIC’s National Meetings and signifies the end of the four-day event. If you have never attended one of these meetings in person, you might be surprised by the almost pageant-like atmosphere of the room. The room is always huge. This is necessary as it is set up to provide space for regulators from all of the U.S. states and territories at the head table(s) and ample space for those who come to view the activities. The tables are draped with the flags of all those jurisdictions. To facilitate being able to see what is occurring, very large projection screens are set up in the room and a camera crew is present to provide the image of the speaker to the entire room. Sometimes the meeting activity justifies that pageant-like atmosphere, sometimes (most of the time) it is just business as usual. The National Climate Resiliency Strategy for Insurance was adopted. This is the first-ever national climate resilience strategy for insurance. It takes the stance that while state regulators have supervised insurance markets for more than 150 years, the challenges of today are national in scope and require a unified approach. Plenary received the reports of all of the “lettered” committees. The Executive Committee approved the request to develop the Public Adjuster Licensing Model Act (#228). Amendments to the Unfair Trade Practices Act (#880) were adopted, as well as changes to the Market Conduct Annual Statement data element process. A status report on the state implementation of various NAIC-adopted model laws and regulations was provided.
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