2021 NAIC Legislative Priorities
The NAIC is celebrating 150 years of assisting states in collectively working together to provide expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. While the NAIC does provide accreditation standards and analysis processes for state regulators to use as tools for guidance in model laws and regulation, the group also provides the opportunity for the voices of state regulators to be heard together. As part of this work, the NAIC gathers throughout the year and organizes events to lobby for legislative progress.
Here are highlights of this year’s NAIC legislative priorities:
- REAUTHORIZE THE NATIONAL FLOOD INSURANCE PROGRAM (NFIP)
A long-term NFIP reauthorization is critical before it expires on September 30, 2021. Reauthorization legislation should encourage flood mitigation efforts and facilitate growth of a private flood insurance market.
- STRENGTHEN HEALTH INSURANCE MARKETS, MAKE COVERAGE AFFORDABLE
State health insurance markets need greater stability, consumers need more affordable products, and states need to improve consumer choices. With a practical, non-partisan package, Congress can partner with state regulators to strengthen health insurance markets.
- PROTECT POLICYHOLDERS DURING AN INSURANCE COMPANY RECEIVERSHIP
Current law provides no deadline to the federal government for filing claims in an insurance receivership, causing proceedings to drag on for years and reducing recoveries for insurance consumers. Congress should support NAIC proposed legislation that would require the federal government to file claims it may have against insolvent insurance companies within a specified time consistent with bankruptcy proceedings.
- SUPPORT A FEDERAL PROGRAM FOR PANDEMIC BUSINESS INTERRUPTION INSURANCE
The COVID-19 pandemic demonstrated that the private insurance market is unable or unwilling to provide pandemic coverage with business interruption policies. Like other difficult to insure risks such as terrorism, flood, and crop, a federal mechanism is necessary to protect businesses from the risks of a future pandemic.
- PROVIDE STATE INSURANCE REGULATORS A VOTE ON THE FINANCIAL STABILITY OVERSIGHT COUNCIL (FSOC) (H.R. 3099)
The insurance sector is the only financial services sector whose primary regulator is not a voting member of the FSOC. The Primary Regulators of Insurance Vote Act (H.R. 3099) would grant state regulators full participation on FSOC by allowing them to vote.
- OPPOSE EXPANSION OF THE LIABILITY RISK RETENTION ACT (LRRA)
The LRRA was enacted at a time during a severe crisis in the availability of liability insurance. No such crisis exists today and expansion of the LRRA to property insurance would undermine consumer protections and create an unlevel playing field.
- OPPOSE PREEMPTION OF STATE INSURANCE DATA PRIVACY AND DATA SECURITY STANDARDS Federal data privacy and security legislation should acknowledge the state insurance regulatory framework and not undermine state laws and regulations to protect the best interests of insurance consumers.
More detail on the NAIC legislative process can be found on their website at NAIC.org., and they’ve got an interesting video on the history of their organization, detailing their 150-year achievements. So, happy anniversary to the NAIC – and to us, consumers, who benefit from their supervision and administration.
If you have any questions or would like additional information, please feel free to contact me at sharlea.taft@sapiens.com
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Sharlea Taft Sharlea Taft is the NAIC Liaison for Sapiens and responsible for keeping up with regulatory changes and updates from the NAIC. Sharlea's background includes over 17 years in insurance and regulatory experience working with insurance companies and securities filings. She holds a Masters in Business Administration and has a Professional in Insurance Regulation from the NAIC.