NAIC Considers Best Practices for Regulatory Review of Predictive Models and Analytics
NAIC Continues Work on Climate Risk and Resilience Issues
Legal Development 02 September 2020 02 September 2020
On July 31, 2020, the National Association of Insurance Commissioners (“NAIC”) Climate Risk and Resilience (C) Working Group (the “Working Group”) held a virtual meeting during which it received updates from several groups on ongoing projects and heard presentations from several industry members regarding their respective approaches to responding to climate change and sustainable insurance products.
Notably, the Working Group received an update from the American Academy of Actuaries and NAIC Center for Insurance Policy and Research (“CIPR”) on their separate but complementary projects related to analyzing results of the NAIC Climate Risk Disclosure Survey. The survey has been gathering information since 2010 about how insurers across all lines of business assess and manage risks related to climate change, including with respect to governance, risk management, climate modeling, stakeholder engagement, and the insurers’ own greenhouse gas management. CIPR intends to present the results of its analysis of the survey at the NAIC Insurance Summit in September, and both CIPR and the Working Group expecting to present more comprehensive insights regarding insurers’ responses to climate change by the end of this year.
The Working Group also received an update on California’s new Climate Smart Insurance Product Database, which is the first consumer oriented list of climate related insurance products. The purpose of California’s database is to promote public understanding of climate-related insurance products and encourage innovation in the insurance market to help reduce greenhouse gas emissions and promote resilience. For example, the database can be used to identify discounts for green energy use, and is searchable by specific insurance company, company type, category of insurance, and insurance products. The database is currently live and can be accessed here.