Disaster resiliency, AI use among NAIC's 2024 priorities
The association will continue advocating for pre-disaster mitigation funding and offering state regulators scenario analysis resources.
As it looks toward the year ahead, the National Association of Insurance Commissioners’ strategic priorities aim to address a diverse range of industry pressure points such as growing natural catastrophe risks, marketing considerations and the use of artificial intelligence.
NAIC President and Connecticut Insurance Commissioner Andrew N. Mais stated that the state-based regulatory system is well prepared to address the challenges of an increasingly interconnected world through coordination, cooperation and collaboration.
“The NAIC’s regulatory priorities for 2024 reflect our commitment to pursuing innovative and effective solutions to the most pressing issues affecting consumers, the insurance sector and markets,” Mais said in a release.
Addressing climate risks & natural catastrophes: The NAIC’s National Climate Resilience Strategy for Insurance is a proposal that would unify data collection and utilization as well as resiliency action. To better utilize data in addressing natural catastrophe resiliency, the NAIC is planning a Climate Risk Dashboard that will measure and evaluate protection gaps.
The association will also work to develop resiliency tools, while continuing to advocate for pre-disaster mitigation funding and offering state regulators scenario analysis resources.
Financial oversight & transparency: The NAIC hopes to “reduce reliance on credit rating providers and modernize the role of NAIC’s Securities Valuation Office” with its Framework for Insurers Investment Regulations. The framework hopes to find the most effective ways to regulate insurers’ investments in the “modern environment of insurance regulation,” the association reported.
Continuing implementation of the Asset Adequacy Testing framework is also on the NAIC’s agenda for the year. The framework aims to bring more transparency to the assessment of cash flows for carriers’ structured security holdings.
Weeding out bad actors: To protect the integrity of the insurance sector, the NAIC and state agencies are taking a multifaceted approach to combat deceptive practices in insurance marketing.
To assist consumers in making smart insurance decisions, the NAIC is developing an online tool that will let people check insurance producers’ licenses. Additional information on producers will also be available on state insurance regulator websites.
Race, financial inclusion & protection gaps: The association will work to identify issues related to race and insurance and financial inclusion as well as ways it can help close protection gaps. The NAIC noted these issues are often interrelated and “span personal, political, and public policy realms.”
Addressing AI & cyber risks: The rapid development and dissemination of AI and other cutting-edge technologies carry equal amounts of opportunity and risk, while making the regulatory landscape all the more complex. During the coming year, the NAIC will champion the adoption of the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers.
The organization will also continue to research and monitor for trends in cybersecurity. It will also continue to propose and prop up a regulatory framework that addresses third-party data and predictive models.
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