NAIC Summer 2020 Meeting Summary
The NAIC Summer 2020 National Meeting, which occurred during July 27 through August 14, was the NAIC’s first comprehensive virtual meeting. The NAIC utilized a video conferencing platform for multimedia presentations, video broadcast options for key speakers, and multiple join options for interested parties.
Statutory Accounting Updates
Interpretations With Effective Date Extensions
The SAPWG extended the effective dates of interpretations (INTs) 20-02T, 20-04 T and 20-05T through third quarter financial reporting. The INTs are set to expire December 30, 2020 (prior to 2020 annual reporting).
Reinsurance (E) Task Force
The Reinsurance Task Force presented a status report on the implementation of the 2019 Revisions to Credit for Reinsurance Model Law #785 and Model Regulation #786 which are pending adoption in many states. These models are scheduled to become accreditation standards by 2022, and nationwide adoption is crucial to the United States participation in the International Covered Agreement. As of July 7, 2020, 11 jurisdictions have adopted #785 and 17 jurisdictions are under legislative consideration. The Commonwealth of Virginia is the sole adopter of #786. Several meeting participants expressed concerns over the tight timelines to present the revised models given the impact of COVID-19 on the timing of legislative sessions.
Special Session on Race and Insurance
The NAIC Center for Insurance Policy and Research (CIPR) hosted three special sessions that included panels of experts who provided unique and educated insights to the NAIC on COVID-19: Lessons Learned, Hurricanes & Resiliency, and Race & Insurance. With an eye toward current events, a summary of the Race & Insurance session seemed particularly important.
The first group of panelists discussed how racism is perpetuated in the insurance industry and how minorities lack trust in the industry due to historical discriminatory practices. The panelists offered several solutions for the path forward, including:
- Recruiting more black insurance agents and financial advisors,
- Addressing financial literacy challenges in minority communities, and
- Promoting leadership development programs for black high performers so there are more black voices in insurance company leadership.
A second panel focused on insurance industry practices that inhibit diversity and inclusion, such as:
- Using big data gathered from social networks,
- Using credit scoring for tiered pricing as a proxy for racial bias, and
- Disparities in healthcare due to the lack of affordable health insurance that excludes essential benefits.
Proposed solutions include:
- Detecting discriminatory practices by collecting market conduct regulation data in the same robust manner as that used for financial regulation,
- Improving consumer education on insurance policies and coverage, and
- Ensuring equity in healthcare coverages by preventing unfair differences in healthcare coverage.
The final panel consisted of seven Insurance Department Commissioners and Directors that shared their personal experiences with racism and diversity and initiatives in their jurisdictions and spheres of influence to promote inclusion and diversity.
To effect change in the industry, the NAIC created a Special Committee on Race and Insurance composed of Insurance Commissioners and Directors from 51 jurisdictions. The Special Committee’s first meeting will be held on September 17, 2020. The NAIC recently released “The Regulators” podcast on Race & Insurance and posted an open position for an NAIC Diversity Officer.
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