At the Summer 2023 National Meeting of the US National Association of Insurance Commissioners (“NAIC”), a number of sessions were focused on environmental, social and governance (“ESG”) initiatives, led by the Special (EX) Committee on Race and Insurance (the “R&I Committee”) and the Climate and Resiliency (EX) Task Force (“C&R Task Force”), both of which report to the NAIC Executive (EX) Committee. While neither the C&R Task Force nor the R&I Committee announced any major developments or exposed any substantive items for review or comment, both bodies reported on the ongoing progress of important initiatives which they have been overseeing during the past few years. In addition, the Property and Casualty Insurance (C) Committee (the “P&C Committee”) announced plans for a data call to better understand protection gaps and the availability and affordability of insurance.
Special (EX) Committee on Race and Insurance
At its August 14, 2023 meeting, the R&I Committee received updates from America’s Health Insurance Plans on health equity and from the Member Diversity Leaders Forum. The latter is a forum for state insurance regulators to share diversity, equity and inclusion (“DE&I”) best practices and generally discuss ways in which DE&I matters can be addressed; the update at this meeting discussed ongoing regulator DE&I meetings and sharing of DE&I best practices nationally and internationally, as well as regulator diversity training coursework.
In addition, the R&I Committee received reports from its Property/Casualty, Life and Health workstreams, which are looking at issues such as algorithm bias, unfair bias in underwriting and rating, issues for minority communities throughout the product cycle (i.e., from marketing/access to insurance through underwriting/rating, claims handling and fraud detection), preventive care and mental health coverage.
Climate and Resiliency (EX) Task Force
At its August 15, 2023 meeting, the C&R Task Force heard a presentation from the Julie Ann Wrigley Global Futures Laboratory at Arizona State University regarding the rise in global temperature and effects on rising sea levels and other catastrophic perils. In addition, the C&R Task Force heard a presentation from Ceres, a nonprofit organization, regarding inclusive insurance (covering issues such as the protection gap and offering of inclusive insurance including through innovative products such as microinsurance and parametric insurance) and climate risk disclosures. The California Department of Insurance also gave a presentation to the C&R Task Force on atmospheric river storms in Western states. Finally, the C&R Task Force received an update from its Solvency workstream, which focused on the financial impact on insurers from climate change and referrals to other NAIC groups for further work in this area.
Property and Casualty Insurance (C) Committee
The P&C Committee announced at its meeting on August 15, 2023 that an NAIC drafting group is developing a data call to collect property insurance data to help the P&C Committee better understand property insurance markets and insurance protection gaps, including with respect to availability and affordability of insurance. Severe weather events, higher reinsurance costs and inflation are raising insurance availability and affordability concerns across the US states including variations in different regions of given states. The data template will be developed to meet specific needs of state insurance regulators with the goal of having a long-term robust data collection strategy to help regulators in assessing and responding to protection gaps, availability and affordability.
To view additional updates from the US NAIC Summer 2023 National Meeting, visit our meeting highlights page.