An Eye on Insurance: Recent Developments in Insurance Regulation

2024 has seen a significant amount of activity by state insurance regulators and the National Association of Insurance Commissioners (the “NAIC”) including the adoption of major revisions to the regimes governing investments by insurers and the use of artificial intelligence in the conduct of insurance business. In our latest edition of our An Eye on Insurance Bulletin, we have summarized key elements of several of the most important adoptions which have taken place.

Specific highlights of interest include:

• The NAIC adopted the Valuation of Securities (E) Task Force’s amendment to the definition of “NAIC Designation” that focuses on the “investment risk” of a security instead of the narrower “credit risk” in the prior definition;
• A process which permits subgroups of the Valuation of Securities (E) Task Force to challenge NAIC Designations assigned based on credit rating provider ratings in the filing exemption process was adopted;
• The Statutory Accounting Principles (E) Working Group adopted revisions to SSAP No. 26 – Bonds to clarify guidance under the new bond definition for debt securities issued by funds; and
• The New York State Department of Financial Services recently adopted guidance to protect consumers from unfair or unlawful discrimination by insurers using artificial intelligence.

If helpful, we would be happy to consult with you or your team to determine which actions you should consider taking in response to the changes discussed in this Bulletin.