Reporting Developments Affecting the Insurance and Reinsurance Industries


NAIC Technology Groups Ramping Up Before the Spring National ‎Meeting

The National Association of Insurance Commissioners (“NAIC”) will convene next month in Phoenix, Arizona, for its Spring National Meeting. The Innovation, Cybersecurity, and Technology (H) Committee (the “H Committee”) and its working groups are ratcheting up their work in anticipation of next month’s national meeting. Earlier this week the NAIC announced that issues pertaining to the use of AI by insurers and cyber risk are among its 2024 Strategic Priorities while two H Committee working groups exposed separate technology related deliverables for public comment periods closing next month before the Spring National Meeting.

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A Deep Dive into the Diligent Effort (Search) Requirement

The excess and surplus lines insurance market is a rapidly-growing avenue for the placement of insurance policies in the United States. Many alien (non-U.S.) insurance carriers write surplus lines insurance coverage via their inclusion on the NAIC IID Quarterly Listing of Alien Insurers, and there has been exponential growth in the formation of “domestic surplus lines insurers” that are U.S.-based insurers authorized for the express purpose of writing only surplus lines insurance.

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Oklahoma PBM Law’s Uncertain Appeal to the Supreme Court

On January 2, 2024, the United States Court of Appeals for the Tenth Circuit (“Tenth Circuit”) denied the State of Oklahoma’s motion for a stay pending appeal to the United States Supreme Court and one week later transferred jurisdiction back to the district court regarding Pharmaceutical Care Management Association v. Mulready. What this means is that the Tenth Circuit’s August 2023 ruling striking down provisions of Oklahoma’s Patient’s Right to Pharmacy Choice Act‎ as preempted by the federal Employee ‎Retirement Income Security Act (“ERISA”) and Medicare Part D, remains in effect, and thus Oklahoma may not enforce those preempted provisions of its law. ‎Arguably, there is now a circuit split between the Eighth and Tenth Circuits as to the extent of federal preemption regarding efforts by states to regulate pharmacy benefit managers. Oklahoma is expected to appeal to the United States Supreme Court. Whether or not the Supreme Court will choose to accept the case is uncertain.

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Join Us for the First in Our Series on AI

Increased use and influence of artificial intelligence systems by companies and consumers bring with them new and dynamic oversight, compliance, governance and disclosure challenges. Legal and risk management professionals must develop processes and policies for AI tools that work within the requirements of the law as it is today, while also anticipating the coming wave of legal, regulatory and technological changes. Over the next few months, Locke Lord lawyers will tackle some of the most pressing AI concerns in a series of complimentary webinars discussing practical, real-world challenges facing organizations.

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Artificial Intelligence Regulation in the ‎Insurance Industry – 2023 a Year in Review‎

2023 has been a very productive year for regulators advancing their efforts to understand new technologies and consider whether and how to regulate the rapidly developing technologies, including artificial intelligence, predictive models and algorithms. Keeping in mind that existing insurance laws and regulations often are broad enough to sweep in the new technologies, both the industry and regulators desire a better understanding of how the technologies are being used and how to approach their regulation. In 2023, many initiatives took root and spurred further efforts to protect consumers in the wake of new technological innovations impacting the insurance industry.

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Tenth Circuit Denies En Banc Hearing in PBM Case, Will the Supreme Court Hear the ‎Case?‎

On December 12, the United States Court of Appeals for the Tenth Circuit (“Tenth Circuit”) denied en banc hearing to the Attorney General of the State of Oklahoma in Pharmacy Care Management Association v. Mulready. The Oklahoma Attorney General’s office is likely to appeal to the Supreme Court. Arguably, there may now be a circuit split as the Eighth Circuit had previously ruled that ERISA did not preempt regulation of pharmacy benefit managers (“PBMs”) by the North Dakota Insurance Department while the Tenth Circuit ruled that similar regulation is preempted by ERISA.

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