The National Association of Insurance Commissioners (NAIC) at its 2023 Summer National Meeting announced a plan to issue a data call to help state insurance regulators collect data from insurers to better understand property markets and coverages and protection gaps, especially when it comes to challenges around the availability and affordability of insurance.
The increasing frequency and severity of weather events, rising reinsurance costs, and inflationary pressures are making property insurance availability and affordability more challenging for a growing number of regions across the U.S. These dynamics can vary within a relatively small geographic area, so while a state’s property insurance market may be generally healthy overall, there can be localized protection gaps that challenge certain communities.
Recognizing this challenge, NAIC Members previously adopted a 2023 charge for the Property and Casualty Insurance (C) Committee to: “Assist state insurance regulators in better assessing their markets and insurer underwriting practices by developing property market data intelligence so regulators can better understand how markets are performing in their states, and identify potential new coverage gaps, including changes in deductibles and coverage types, and affordability and availability issues.”
State Departments of Insurance, as the primary regulators of the U.S. insurance market, currently have robust financial data to understand the impact of these forces on insurers’ solvency and investments and can assess the strength and resilience of the industry, but many states lack granular data on how this translates to availability and affordability of coverage for consumers in some areas.
Under the direction of the Property and Casualty Insurance Committee, chaired by Alan McClain, Commissioner of the Arkansas Insurance Department, insurance regulators representing at least 30 states have begun preliminary scoping work to identify regulatory issues and considerations related to affordability and availability for which regulators lack data. The group intends to develop a data template to meet the specific needs of state regulators. The goal will be to develop a long-term, robust data collection strategy to help regulators more nimbly respond to inquiries related to their property markets versus a one-time data call.
NAIC Members believe the state insurance departments have both the expertise and necessary regulatory authority to gather, analyze, and utilize data about their unique market conditions and meet the needs of policyholders. State regulators are best positioned to lead this work to ensure that they receive accurate and meaningful data to meet their regulatory needs.