The National Association of Insurance Commissioners (NAIC) has created a new task force to monitor technology, data collection and Cybersecurity developments in the insurance industry. The Innovation and Technology (EX) Task Force (IT Task Force) was formed on March 9, 2017 and reports directly to the NAIC’s Executive Committee. The IT Task Force will appoint and oversee the work of the following NAIC groups: the Big Data Working Group, the Cybersecurity Working Group and the Speed-to-Market Working Group. According to the NAIC’s March 9, 2017 press release, the IT Task Force’s purpose is to help insurance regulators stay informed about technology-related developments, products and services in the insurance industry, including start-up companies, and to ensure they meet consumer expectations and ensure consumer protections. The press release notes that annual investment in insurance technology (InsurTech) has increased to more than $2.5 Billion and continues to grow.
When formed by the IT Task Force, the Cybersecurity Working Group will likely continue the work of the former Cybersecurity (EX) Task Force, which monitors Cybersecurity issues and is currently drafting the NAIC Insurance Data Security Model Law, addressed in a previous blog post. The Speed-to-Market Working Group will continue the work of the Speed-to-Market Task Force, which oversees the modernization of insurance product filings/reviews, monitors the System for Electronic Rate and Form Filing (SERFF) and provides support to the Interstate Insurance Product Regulation Commission (IIPRC) for initiatives requiring uniformity and policy changes within the states. The Big Data Working Group will continue the work of the Big Data (D) Task Force, which addresses insurance industry collection and use of consumer and other data. Although the NAIC’s press release states that the Big Data Working Group will report directly to the Executive Committee, the Big Data Task Force is currently still listed in the NAIC’s Committee Structure as reporting to the Market Regulation and Consumer Affairs (D) Committee (which reports to the Executive Committee). The appropriate structure will likely be resolved at the upcoming National Meeting of the NAIC in Denver, Colorado in April 2017.
On March 14, 2017, the NAIC published the IT Task Force’s 2017 charges which require the IT Task Force to “provide a forum for regulator education and discussion of innovation and technology in the insurance sector, to monitor technology developments that impact the state insurance regulatory framework, and to develop regulatory guidance as appropriate.” In addition to overseeing the activities of the three Working Groups (Cybersecurity, Speed-to-Market and Big Data), the 2017 charges require the IT Task Force to:
- Provide a forum for the discussion of innovation and technology developments in the insurance sector, including the collection and use of data by insurers and state insurance regulators—as well as new products, services and distribution platforms—in order to educate state insurance regulators on how these developments impact consumer protection, insurer and producer oversight, marketplace dynamics, and the state-based insurance regulatory framework.
- Develop regulatory guidance, white papers, model laws and/or regulations, or make other recommendations to Executive (EX) Committee, as appropriate.
- Discuss regulatory issues that arise with the development of autonomous vehicles; study and, if necessary, develop recommendations for changes needed to the state-based insurance regulatory framework; consider development of a white paper or model legislation, if necessary.
- Discuss emerging issues related to on-demand insurance applications—in addition to potential implications on the state-based insurance regulatory structure—including, but not limited to, cancellations, non-renewals, coverage issues, notice provisions and policy delivery requirements.
- Coordinate with other NAIC committees and task forces, as appropriate, on technology and innovation issues.
The Task Force’s first meeting is scheduled for April 9, 2017 at the NAIC National Meeting in Denver. Sidley’s Insurance and Financial Services group will be participating in the meeting and will continue to contribute insurance-related developments to the Sidley Data Matters blog.