On Wednesday February 22, 2023, the National Association of Insurance Commissioners (“NAIC”) Accelerated Underwriting (A) Working Group exposed for a 45-day comment period draft regulatory guidance while simultaneously exposing for a 30-day comment period a referral to the Market Conduct Examination Guidelines (D) Working Group proposing revisions to the NAIC Market Conduct Handbook. This is a significant shift from the working group’s prior work mostly gathering information to affirmatively flexing supervisory authority over insurance carriers’ existing accelerated underwriting practices.
The regulators in attendance stressed the need for the regulatory guidance to address current market activity while asserting authority under existing state law to regulate accelerated underwriting programs in the same way as traditional underwriting programs. This assertion of broad regulatory authority is centered on the anti-discrimination provisions of the Unfair Trade Practices Act (Model# 880). The draft regulatory guidance asserts that the applicable standard for review by state regulators should be whether a life insurance carrier’s accelerated underwriting programs are fair, transparent, and secure.
The working group is not scheduled to meet during the Spring National Meeting next month. Thus the working group will most likely reconvene in April to discuss the public comments received on both workstreams. An additional public comment period would then follow meaning final approval could follow at the Summer National Meeting (in August) if not sooner.
Locke Lord will continue to monitor for any developments. If you have questions, please contact your Locke Lord relationship partner or the authors.