Reporting Developments Affecting the Insurance and Reinsurance Industries


NAIC’s Work on Privacy Model Grinds On

The NAIC’s Privacy Protections (H) Working Group met over the weekend as part of the NAIC’s Summer National Meeting. The working group announced that later in the year it will seek an extension on its efforts to create a unified privacy model act (#674) which will likely push back final adoption into sometime next year. Multiple states have publicly announced that they will not support the current proposed Version 1.2, and at least one state referred to it as fundamentally flawed. The opposed states do not want to move forward with the current version. The Chair announced that the working group will continue to receive public comments while it digests comments previously received and continues the direct one-on-one outreach to companies and trades.

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NAIC Working to Extend Authority Over Health Insurance Lead Generators

Late last month, the NAIC Improper Marketing of Health Insurance (D) Working Group met in ‎a public session to discuss revisions to the Unfair Trade Practices Act (Model# 880) to include ‎health insurance lead generators. The main thrust of the proposed revisions is to extend the ‎prohibited practices of Section 4 of the Unfair Trade Practices Act to health insurance lead ‎generators and to impose upon lead generators record keeping requirements subject to ‎examination by state insurance regulators. The health insurance industry, as represented by ‎AHIP, publicly supports the proposed revisions to the Unfair Trade Practices Act as do multiple ‎consumer representatives.‎

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NAIC Committee on Race & Insurance Considers Barriers to Preventive ‎Health Services

The health workstream of the NAIC’s Special (EX) Committee on Race & Insurance, co-‎chaired by Maryland and Minnesota, met yesterday. The overarching theme of the meeting was ‎access to preventive services, particularly as it pertains to chronic diseases, emphasizing ‎underserved populations, especially people of color. The regulators heard presentations from ‎three academic and community advocacy experts‎.

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Connecticut Amends Its Captive Insurance Laws

On June 23, 2023, the Connecticut Insurance Department (the “Department”) issued a press release announcing Governor Ted Lamont signed Public Act No. 23-15, An Act Concerning Captive Insurance Companies, (the “Act”) into law.  Effective October 1, 2023, the Act makes various changes to Connecticut’s captive insurance laws.  In particular, the Act now permits captive insurance companies to “accept or transfer risk by means of a parametric contract,” which will allow businesses to more easily cover unique risks, according to the Department. 

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Texas Legislature to ESG: Don’t Mess With Texas‎

The 88th Regular Session (2023) of the Texas Legislature voted to enact Senate Bill 833 (“SB 833”), ‎‎which aims to prohibit ‎insurers operating in Texas from using environmental, social, or governance ‎‎‎(“ESG”) models, ‎scores, factors, or standards to charge different rates to businesses or risks in the ‎‎same class ‎facing essentially the same hazards.‎ Because of the divergent approach states have ‎taken regarding ESG issues, SB 833 may present unique challenges for insurance companies ‎operating across ‎multiple jurisdictions. To navigate this complex landscape, insurance companies ‎need to develop ‎flexible strategies ‎that can accommodate the contrasting regulatory expectations in ‎the states coined ‎‎“anti-ESG” versus the “pro-ESG” states. This scenario not only involves ‎managing ‎legal and compliance ‎risks but also managing reputational risks.

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California Department of Insurance Issues Survey on Automated Decision Tools

Last month, the California Department of Insurance sent a survey to more than 50 property & casualty insurers to gather information about the use of automated decision tools in rating, underwriting, claims handling, fraud detection, marketing loss prevention and other operative areas

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NAIC Picking Up Steam as it Drafts New Privacy Model

Since the NAIC Spring National Meeting in late March, the Privacy Protections (H) Working Group has continued its work to draft a new unitary privacy model. Over April, the Working Group met one-on-one with industry and interested parties. Since then, the Working Group met twice to receive public comments on discrete topics. The Working Group will ratchet up that level of activity with two full days of in-person public drafting sessions, starting this week. The Working Group plans to circulate a new full draft by the end of the month followed by three more meetings to receive public comments before the Summer National Meeting in August.

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