b'TABLE OF CONTENTSContinuing Focus on Race and InsuranceIn 2021, the NAICs Special (EX) Committee on Race andColorado Insurance Commissioner with the Insurance (the R&I Committee) continued its efforts to: authority to promulgate rules to guard against the 1.Research and analyze the level of diversity anduse by insurers of external consumer data and inclusion within the insurance industry, andinformation sources in a way which unfairly make recommendations on action steps. discriminates against an individual based on that individuals protected characteristics.2.Research and analyze the level of diversity andThe intention behind SB21-169 is to require inclusion within the NAIC and state insuranceinsurers doing business in Colorado to stress test regulator community, and maketheir big data systems and to take corrective recommendations on action steps. action to address consumer harms identified from 3.Examine and determine which practices orsuch testing. This testing is required in order to barriers exist in the various insurance sectorsprotect Colorado consumers from insurance (P&C, Life and Health) that potentiallypractices that result in unfair discrimination on the disadvantage people of color and/or historicallybasis of race, color, national or ethnic origin, underrepresented groups, and makereligion, sex, sexual orientation, disability, gender recommendations on action steps. identity or gender expression.At the Fall National Meeting, the R&I CommitteeThe fundamental concern of the Colorado DOI, noted that in 2022 it would be developing severalwhich underlies SB21-169, is that the rapid white papers, including on unfair discrimination andexpansion of big data has transformed insurance disparate treatment in the P&C industry andpractices in ways that are still being understood. provider networks and cultural competency in theData presented by the Colorado DOI showed that health insurance industry. In addition, the R&Iuse of certain algorithms can operationally result in Committee received a presentation from thebiases against certain minority communities, and it Colorado Division of Insurance (Colorado DOI),is the goal of SB21-169 to capture such instruments as well as presentations from the American Propertyfor modification before they are introduced to Casualty Insurance Association, Blue Cross Blueconsumers. The central principle of the law is that a Shield of Illinois and Zurich North America. simple correlation to risk will not be sufficient if an underlying insurance practice also correlates to a Colorado Legislation protected class and negatively impacts that class. Specifically, SB21-169 imposes a three-prong test to The Colorado DOIs presentation related to a billdetermine if an insurance practice results in unfair (SB21-169) that was signed by the governor ofdiscrimination: (1) the use of external data or Colorado on July 6, 2021, and became effective ontechnology has a correlation to a protected status; September 6, 2021. This legislation provides the(2) the correlation results in a disproportionately MAYER BROWN |91'