Accounting Standard Updates
12 Days of SSAP: The NAIC’s Hot List
Article reading time: 1 minute 40 seconds
Hot Take:
JLK Rosenberger is carrying on our holiday tradition of taking a new perspective on a holiday classic – the Twelve Days of Christmas. Rather than filling your head with turtle doves and gold rings, we are focusing on the latest changes to SSAP and how they will impact your insurance entity in 2023 and beyond.
Today’s post provides a summary of the NAIC’s focus in 2022 and a window into where the NAIC committee systems will be committing their focus for 2023.
Full Article
This post will provide a quick update on the NAIC’s priorities during 2022 and what we can expect the regulators to work on going into 2023.
As regulators are currently reviewing and approving charges for 2023, the following categories are presently listed as priorities:
- Cybersecurity, Consumer Data/Artificial Intelligence (AI) and Innovation
- Race and Insurance
- Long-term Care Insurance
- Climate/Natural Catastrophe Risks and Resiliency
Let’s take a closer look at the focus in each of these areas:
Cybersecurity, Consumer Data/Artificial Intelligence and Innovation
Last December, NAIC members voted to form the Innovation, Cybersecurity, and Technology (H) Committee to address emerging technologies, AI, and overall cybersecurity practices in insurance. The committee was created to address regulators’ concerns about the adequacy of current state laws and regulatory tools that provide protections to consumers in rapidly changing environments, which remained the committee’s primary focus during 2022. Based on proposed charges for 2023, the committee’s goals are not expected to change much, with the emphasis remaining on gathering information on marketplace dynamics, best practices, and evaluating the impacts of technological innovation on consumers.
Race and Insurance
Special (EX) Committee on Race and Insurance is also relatively new and was formed in mid-2020 to address and prevent practices that may be viewed as discriminatory or disadvantageous to people of color or historically underrepresented groups. During 2022, the committee was closely working with the Innovation, Cybersecurity, and Technology Committee in a joint effort to coordinate their work on identifying issues affecting people of color and/or historically underrepresented groups, particularly in predictive modeling, price algorithms, and AI. It is expected to remain the focus of this group going into 2023.
Long-term Care Insurance
This area has been a high priority for regulators for quite some time. Regulators recognize the issues carriers face related to policyholders’ increasing life expectancies, increased medical care costs, and complexities in pricing and reserving in a given environment. The plan is to continue working with the industry and consumers to find common ground solutions and ensure the solvency of long-term care insurers.
Climate/Natural Catastrophe Risks and Resiliency
The Climate and Resiliency (EX) Task Force formed in 2020 is also quite new. The task force was created in response to the increasing number of natural disasters on US soil in the past several years. The task force’s mission remains to coordinate discussion on climate-related risk and resiliency issues, including dialogue among state insurance regulators, industry, and other stakeholders.
