US NAIC Fall 2024 National Meeting Highlights: ESG Initiatives

The US National Association of Insurance Commissioners (“NAIC”) held its Fall National Meeting in Denver, CO on November 16-19, 2024. During the Fall National Meeting, the Special (EX) Committee on Race and Insurance (“R&I Committee”) met on November 17, and the Climate and Resiliency (EX) Task Force (“CRTF”) met on November 19.

The R&I Committee received updates and presentations on the following workstreams at its November 17 meeting:

• Health Workstream: Since the NAIC’s Summer National Meeting in Chicago in August, the Health workstream has focused on issues regarding the collection of race and ethnicity data for health coverage and its evolution, as well as its benefits and implications. The Health Workstream is planning regulator-to-regulator sessions to consider further its work and year-end initiatives.
• Life Workstream: The Life Workstream finalized its endorsement supporting legislation in the states that would require a financial literacy course as a prerequisite for high-school graduation. The Life Workstream regards such a course--which among other things would introduce insurance types and concepts—to be fundamental to an individual’s future financial success. The R&I Committee adopted this endorsement during its November 17 meeting.
• P&C Workstream: The R&I Committee’s P&C Workstream met on November 16. During this meeting, the R&I Committee’s P&C Workstream heard an update from the District of Columbia Department of Insurance, Securities and Banking about its report relating to unintentional bias in private passenger automobile insurance (the “DC Report”). The DC Report—which is not an actuarial analysis—concludes that race is not an attribute of increased risk, and investigates systemic issues that lead to higher losses that may be correlated with a driver’s race. In addition, the DC Report analyzes insurance premium by race—including with respect to types of claims, losses, and loss amounts—in order to examine whether steps can be taken by the private passenger automobile insurance industry to minimize unintentional biases. Finally, the R&I Committee discussed whether the methodology used in the DC Report could assist with similar research in the broader property insurance industry. The Consumer Federation of America and NAMIC provided public comments identifying the strong process in developing the DC Report and requesting next steps, including studying consumer protections in telematics products.
• Member Diversity Initiative: The R&I Committee’s Member Diversity Initiative Workstream shared that the hallmark of its work is led by celebrating individual diversities. The Member Diversity Initiative has focused on community engagement, finding value in engaging in dialogue with multiple members of communities with diverse and meaningful viewpoints.

The R&I Committee is transitioning to the lettered NAIC Committees rather than continued engagement as a special committee for 2025, and its workstreams will continue with the existing committee memberships.

The CRTF heard updates and presentations on the following matters during its November 19 meeting:

• The CRTF received an update on deliverables from the National Climate Resilience Strategy for Insurance report (the “Climate Resilience Strategy”). This included an update regarding the development of the Natural Catastrophe Risk Dashboard, which is intended to be a tool for insurance regulators to understand climate risks such as wildfire risks, convective storm risks and flood risks, as well as considerations for protection gaps. The CRTF also heard updates regarding risk-mitigation efforts from the Louisiana Department of Insurance (DOI) regarding its fortified roof program, which provides for mandatory insurance premium discounts for fortified roofs, and a roof endorsement, which all insurers must provide to insureds for total loss of roof. The CRTF also heard from the Minnesota Department of Commerce regarding its risk-mitigation efforts.
• United Policyholders gave a presentation on lessons learned from recent wildfire disasters and common challenges for consumers that result from wildfires, both in the immediate aftermath and in the long term. The CRTF also received an update on regulatory work before and after wildfire events.
• The British Columbia Financial Services Authority gave a presentation on the development of a national flood insurance program in Canada. The presentation focused on the country’s efforts to provide affordable and accessible flood insurance to high-risk properties—which are currently excluded from the private market—and to enhance consumer awareness and understanding of flood risk and insurance options.
• The NAIC staff provided an update regarding federal activities related to climate and resiliency, especially in light of the record-breaking number—and cost—of weather-related disasters in 2024. The update covered the legislative and regulatory initiatives launched by Congress and FEMA to address the gaps and challenges in the federal disaster response and recovery framework, such as increasing funding, streamlining processes, and encouraging risk reduction and adaptation.
• Finally, the CRTF also heard an update from the NAIC’s Center for Insurance Policy and Research regarding the NAIC Climate Scenario Resource Center, a new online platform that provides resources to P/C insurers and their advisors for completing the new climate scenario interrogatories in the year-end 2024 RBC filing.

To view additional updates from the US NAIC Fall 2024 National Meeting, visit our meeting highlights page.