By Katie Dzurec
Director, State Public Policy Outreach
(04/2/25)
The National Association of Insurance Commissioners (NAIC) held its first meeting of 2025 on March 23–26, bringing state regulators, industry representatives, consumer advocates, and Academy volunteers together in Indianapolis. At the top of many minds: how states are responding to volatile economic indicators, the latest advances in artificial intelligence (AI), and uncertainty over decisions at the federal level.
As always, the Academy continued to support and collaborate with the work of the NAIC and the state regulators by sharing updates on projects since the fall national meeting. In addition to the regular updates from the Academy’s health, life, and casualty practice councils, the Committee on Qualifications, the ASB, and the ABCD, the Academy also presented:
- A VM-22 Field Study Update: Academy Director of Research Steve Jackson and Angela McShane of Ernst & Young, the project lead consulting for the Academy, NAIC, and ACLI, provided an additional update to the Life Actuarial Task Force (LATF), following up on earlier updates on the results of the VM-22 field test.
- The State of Long-Term Care: Long-Term Care Committee member, Steve Schoonveld, presented on the recent issue brief to the Senior Issues (B) Task Force, asking task force members to think about how they view the current state of long-term care insurance and its potential status five years from now.
- An Update on CLO Project: C-1 Subcommittee Chairperson Stephen Smith provided an update to the RBC Investment Risk and Evaluation (E) Working Group on the structured securities RBC project.
- An Update on C-3 Project: Life Investment and Capital Adequacy Committee members Rick Hayes and Maambo Mujala presented to the Life RBC (E) Working Group on potential alignment of C-3 Phase 1 and Phase 2 methodologies.
- An Update on H2 Underwriting Risk Project: Health Solvency Committee Chairperson Steven Guzski presented the findings of the long-awaited H2 Underwriting Risk project to the Health Risk-Based Capital (E) Working Group. The NAIC Working Group will discuss the report and recommendations during a call-in late April.
In his inaugural address, NAIC President and North Dakota Commissioner John Godfread outlined his areas of focus for 2025. Building on former NAIC President and Connecticut Commissioner Andrew Mais’ encouragement to “mind the gap” throughout 2024, Commissioner Godfread issued a call to action, inviting regulators, consumer advocates, industry, and other stakeholders to redefine the future of the insurance sector.
Recognizing the need to navigate the complexities of an evolving industry, Godfread urged attendees to tackle the challenges by embracing collaboration, driving innovation, and, ultimately, securing the U.S. insurance market as a leader in the global economy. His call to action played out in two particular sessions—the NAIC’s new RBC Model Governance (EX) Task Force and in Big Data and AI (H) Working Group meeting.
The RBC MOGO Task Force has been created to develop guiding principles for updating the RBC formulas to address current investment trends with a focus on more RBC precision in the area of asset risk and to ensure that insurance capital requirements maintain their current strength and continue to appropriately balance solvency with the availability of products to meet consumer needs.
The Academy submitted on the Task Force’s inaugural charges and provided verbal comments on a March 17 conference call, as well as in Indianapolis, emphasizing its commitment to working with the Commissioners. A presentation is currently scheduled for early April for the Task Force, as the Academy was asked to offer comments on what RBC is and the current fundamental differences between RBC for health, life, and property casualty. A cross-practice council team of volunteers is working on a presentation, representing the three practice areas as well as the Risk Management and Financial Reporting Council.
At the Big Data and AI Working Group session, Pennsylvania Commissioner Mike Humphreys provided an overview of the forthcoming artificial intelligence/machine learning survey of health insurers report. The report reflects a survey of 16 states and indicates varied levels of AI adoption across lines of business—Health: 92%; Auto: 88%; Home: 70%; and Life: 58%. Commissioner Humphreys also provided an update on the implementation of a regulatory framework for the use of AI systems.
For more details on the NAIC’s Spring national meeting, be sure to check out the post-NAIC recap, featuring Academy staff, which will be available April 10 at the Academy’s YouTube channel.
