Jurisdiction: United States

NAIC Cybersecurity Working Group Adds Cyber Coverage to its Focus

Over the last few years, the work of the Cybersecurity (H) Working Group of the National Association of Insurance Commissioners (“NAIC”) has focused on cybersecurity risk to insurance licensees such as insurance carriers, insurance intermediaries, and third-party service providers to insurance licensees. This year the working group’s work will consist of two parallel tracks: the traditional cybersecurity risk, and a new emphasis on cyber insurance coverage. In her discussion of proposed topics for the 2024 work plan, the Chair highlighted cyber coverage questions specific to ransomware, D&O, and whether or not cyber insurance products are providing the coverage that policyholders expect.

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How Will the NAIC Regulate Third-Party Data and Models?‎

The National Association of Insurance Commissioners (“NAIC”) has created a new Third-Party ‎Data and Models (H) Task Force which is charged with developing and proposing a framework ‎for the regulatory oversight of third-party data and predictive models. At the Spring National ‎Meeting in Phoenix, the Chair of this task force, Colorado Insurance Commissioner Michael ‎Conway, informed those in attendance that the task force anticipates a two-year workplan.‎

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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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