NAIC H Committee Pre-Fall National Meeting

This coming Friday the Big Data & Artificial Intelligence (H) Working Group, the Privacy Protections (H) Working Group, and the Innovation, Cybersecurity, and Technology (H) Committee will all meet as part of the Fall National Meeting of the National Association of Insurance Commissioners (“NAIC”) in Orlando, Florida. Data use, data retention, and artificial intelligence (“AI”) will be the big topics at the Fall National Meeting. Other H Committee affiliated working groups will not be meeting at the Fall National Meeting; however, those working groups met earlier over the fall and are moving their workstreams forward.

Big Data & Artificial Intelligence (H) Working Group

This working group will meet Friday morning, among the usual reports on federal and international activity, the working group will receive a report on the life insurance AI/ML (machine learning) survey. This follows two prior surveys on private passenger auto (December 2022) and home (August 2023) business lines.

Cybersecurity (H) Working Group

This working group will not be meeting at the Fall National meeting; however, they met earlier this month. The working group distributed a revised version of the draft Cybersecurity Event Response Plan reflecting comments received earlier in the fall. The purpose of this response plan is “to support Departments of Insurance (DOIs) in their response following notification or otherwise becoming aware of a cybersecurity event at a regulated insurance entity (licensee).” The revisions to the prior draft mostly pertain to the lead state concept, licensees’ duty to supplement information provided to DOIs, confidentiality, and coordination between DOIs and affected licensees when communicating to consumers. While a formal comment period has not been opened, written comments are encouraged, and at least one more formal comment period is anticipated before adoption at some point in 2024.

E-Commerce (H) Working Group

This working group will not be meeting at the Fall National Meeting; however, they met earlier this month. The working group discussed its revised E-Commerce Modernization Guide, formerly titled E-Commerce (H) Working Group Framework.[1] The revised version removed sections pertaining to AI, advertising, and telematics in recognition that these topics are addressed by other NAIC workstreams, resulting in a more focused guide emphasizing e-signatures, notaries, and consumer disclosures regarding cancellations, replacements, etc. Industry commenters are generally supportive of the draft guide though multiple commenters expressed a preference for a formal bulletin or guidance. The working group anticipates meeting early next year, and may adopt the guide at that time.

Privacy Protections (H) Working Group

This working group will meet on Friday at the Fall National Meeting. They last met at the Summer National Meeting where they put on hold consideration of a unitary privacy protection model (#674). In October, the working group received a referral regarding applicability of the proposed model to risk retention groups (“RRGs”) and released a process for moving forward document, both of which will be considered at the Fall National Meeting. Earlier this month, the H Committee approved an extension of the working group’s work on the privacy model into next year.

The working group will also hear a presentation comparing the privacy risks of legacy v. non-legacy systems.

As mentioned above, the H Committee met earlier this month. At that meeting the Committee discussed comments received on the Use of Artificial Intelligence Systems by Insurers Model Bulletin which the H Committee is expected to adopt later this week at the Fall National Meeting.

Locke Lord will continue to monitor developments across the H Committee and its working groups. ‎If you have any questions, please reach out to the author or your Locke Lord ‎partner.‎

For previous Locke Lord commentary on these topics please see below:

Locke Lord QuickStudy: Insurance Regulators Continue to Grapple with the Rapid Development and Use of Artificial Intelligence by Paige Waters and Stephanie O’Neill Macro, August 16, 2023

NAIC’s Work on Privacy Model Grinds On by Daniel Barry, August 14, 2023

What’s in the NAIC’s Draft AI Model Bulletin by Paige Waters and Stephanie O’Neill Macro, August 8, 2023

NAIC Picking Up Steam as it Drafts New Privacy Model by Daniel Barry, June 5, 2023

[1] The origin of this work was a survey inquiring about online transactions permitted during the pandemic that facilitated electronic commerce in ways that would be beneficial to continue. The work expanded to consideration of roadblocks to effective implementation of e-commerce methodologies that benefit consumers.