b'INSURANCE REGULATORY|US/NAICIf adopted, the COE would: (1) facilitate insuranceTask Force will consider during an interim meeting regulator access to catastrophe modelingbefore the NAICs 2022 Spring National Meeting.documentation and provide assistance in distillingSecond, at the Fall National Meeting, the C&R Task the technical information received; (2) provideForce exposed for comment a proposal from the general technical education and training materialsClimate Risk Disclosure Workstream for a on the mechanics of commercial models andredesigned NAIC Climate Risk Disclosure Survey. treatment of perils and risk exposures; and (3)The Workstream had been asked to redesign the conduct applied research analysis using varioussurvey by taking into account appropriate climate model platforms to proactively answer therisk disclosures within the insurance sector and regulatory so what questions that may need to beevaluating the existing survey in terms of alignment addressed for regulatory resilience priorities. with other sectors and international standards. The support services offered through the COE arePrior to the redesign project, the survey included not intended to take the place of individual stateeight questions regarding how insurers consider insurance department activities involvingclimate-related risks in their risk and investment catastrophe models, such as model and rate filingmanagement practices, including how insurers review, nor would the COE approve vendoridentify and assess climate-related risks and their models. Rather, the COE will engage with allpotential impact to the insurers business strategies. vendors willing to participate for all perils withIn addition, the survey considers how insurers technical documentation available for stateengage with stakeholders on the topic of risk insurance regulators. The COE will establish amanagement. For the past several years, six states governance structure to ensure that the COEparticipated in the survey, representing nearly 70% remains transparent and impartial. The COE willof the market measured by direct written premium. periodically report to relevant NAIC committees (including the Technology Workstream of the C&RIn 2021, fifteen states participated in the survey, Task Force and the Catastrophe Insurance (C)representing nearly 80% of the market. All insurers Working Group of the Property and Casualtywriting at least $100 million in direct written Insurance (C) Committee. premium in any participating state were required to Further, the COE will only provide fact-basedcomplete the survey annually. For the past two information and relevant objective analysis, as andyears, insurers were allowed to utilize the reporting when requested. The COE will conduct research usingsystem of the Task Force on Climate-Related catastrophe models to support risk mitigation andFinancial Disclosure (TCFD) of the Financial resilience efforts, critical for reducing future probableStability Board (FSB) in lieu of the NAIC survey losses. In addition, the COE will safeguard informationquestions. The TCFD includes four themes: (1) received from participating catastrophe modelinggovernance, (2) strategy, (3) risk management and (4) vendors through legally binding data-use agreements. metrics and targets. In October 2021, the FSOC, as part of its Report on Climate-Related Financial Risk, The Technology Workstream recommended therecommended that climate-related disclosure tools adoption of the proposal for the COE, which the C&Rbuild upon the four core elements of the TCFD.86|Global Insurance Industry Year in Review 2021'