Volume 40 | December 2023 | |
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End of Year Highlights
NAIC 2023 National Fall Meeting
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NAIC Commissioner Membership Approves Model Bulletin on Use of AI by Insurers
Earlier this month the National Association of Insurance Commissioners Membership voted during the 2023 Fall National Meeting to adopt the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers. The bulletin reflects efforts by the NAIC Innovation, Cybersecurity, and Technology (H) Committee, chaired by Maryland Insurance Commissioner Kathleen A. Birrane. Michael Conway, Commissioner of the Colorado Division of Insurance, and Doug Ommen, Commissioner of the Iowa Insurance Division serve as committee co-vice chairs. Comprising four key sections, each focused on crucial aspects of AI usage by insurers, the bulletin emphasizes the importance of responsible governance, risk management, and procedures to ensure fair and accurate outcomes for consumers. "The bulletin reminds insurance carriers that decisions impacting consumers that are made or supported by advanced analytical and computational technologies, including AI, must comply with all applicable insurance laws and regulations, including unfair trade practices. The bulletin also sets forth state insurance regulators’ expectations on how insurers should govern the use of such technologies by or on behalf of the insurer to make or support such decisions, including the creation and implementation of a written AIS Program, commensurate with an assessment of the risk in accordance with the guidelines established by the NAIC’s 2020 Principles of Artificial Intelligence, and to ensure that decisions impacting consumers made or supported by AI are accurate and do not violate unfair trade practice laws or other applicable legal standards. The bulletin also advises insurers of documentation that a state Department of Insurance may request during an investigation or examination." (continue reading)
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DFR Commissioner Kevin Gaffney confers with another member during a presentation on the use of AI for life insurers at the NAIC 2023 National Fall Meeting. Photo: Courtesy NAIC. | |
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AI and Machine Learning Survey Results: Next Steps?
Results of the 2022-23 Home Artificial Intelligence/Machine Learning Survey (Home AI/ML Survey) that concluded on December Dec. 15, 2022, provide insights useful for supplementing state insurance regulators’ knowledge of the current regulatory framework around AI/ML, governance, consumers and third parties. That was among the findings presented at the National Fall Meeting by the Big Data and Artificial Intelligence (H) Working Group. The group, chaired by DFR Commissioner Kevin Gaffney and charged with researching the use of big data and AI -- including machine learning in the insurance industry, and evaluating "existing regulatory frameworks for overseeing and monitoring their use" -- also presented a list of suggested next steps. First among those steps: an evaluation of the survey analysis and determination of subjects for further exploration. Surveys were distributed to companies writing home insurance business in one or more of 10 participating states. Those licensed to write home insurance and having at least $50 million in national home insurance premium for 2020 were required to complete the survey.he insurance industry's use of AI in the operational areas of Marketing, Underwriting, Pricing, Claims Administration, Loss Prevention and Fraud Detection. (continue reading)
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AAIS Coverage of NAIC Fall National Meeting Includes Interview with DFR Commissioner
American Association of Insurance Services covered the 2023 NAIC Fall meeting in great detail. Among that coverage was a brief interview with DFR Commissioner Kevin Gaffney. The AAIS interview focuses on "the biggest challenges facing the industry, how the regulatory community is responding to them, updates on 'big data' from the NAIC H Committee, and new initiatives for the state of Vermont." (watch here)
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VCIEL Featured in Special 20th Anniversary Commemorative ICCIE Report
Vermont Captive Insurance Emerging Leaders Initiative is among a host of businesses, groups and organizations featured in the recently released Educating and Elevating the Captive Industry, a special publication celebrating the International Center for Captive Insurance Education on its two decades of work becoming the world's leading and most important learning resource for the captive insurance industry. Published by Captive International in close partnership with ICCIE, Educating and Elevating the Captive Industry examines the origins, programs, operations and successes of various organizations serving the captive insurance industry. VCIEL, launched in March 2023 by the Vermont Captive Insurance Association, formed specifically to promote career opportunities within the captive market.
"The Vermont Captive Insurance Association (VCIA) is taking action to bring more young people into the industry. At the 2022 VCIA Annual Conference, workforce challenges were cited as one of the top three issues facing captive insurance. So, in March 2023, the VCIA launched the Vermont Captive Insurance Emerging Leaders Initiative (VCIEL), to raise awareness about captive insurance as a career path and to support fellow new and emerging captive insurance professionals in the domicile. Brittany Nevins, captive insurance economic development director in Vermont’s Department of Economic Development, brought together 30 emerging captive insurance leaders located in Vermont from various roles in the industry to make an impact locally. “It was clear that no one person or company could make the broader impact that was needed, but together anything is possible,” Nevins says. With Vermont’s recent rise to being the number one captive insurance domicile worldwide, it’s clear Vermont has the expertise to regulate and service captive insurance companies. Now it’s helping to boost the captive workforce by attracting young and new talent." (continue reading)
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December Is Universal Human Rights Month
Is financial education an educational right?
As the world honors those promoting and advocating for human rights, civil liberties and equality during Universal Human Rights Month, there's growing emphasis on the important role of financial education in helping ensure a fulfilling life; it's especially critical for marginalized and under-served groups. "Financial institutions should provide financial education programs, particularly to low- to moderate-income communities. ... Banks now face a commercial imperative to not only address human rights but create products and services that put human rights at their core." (continue reading)
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75th Anniversary of UDHR: Landmark, Groundbreaking Global Pledge
December 10th marked the 75th anniversary of what has been described as one of the world's most groundbreaking global pledges: the Universal Declaration of Human Rights. The UDHR "enshrines the inalienable rights that everyone is entitled to as a human being - regardless of race, colour, religion, sex, language, political or other opinion, national or social origin, property, birth or other status." (continue reading)
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There's Still Time to Contribute to the Vermont Strong Campaign - $1M Goal
There's still time to contribute to the Vermont Strong Holiday Campaign. As recovery continues from this summer’s devastating floods, many people, communities and businesses still need our help. Throughout the holiday season, Vermont Strong license plates will continue to raise money to support our neighbors. The need is particularly great in four key areas: housing repair and heating, food security, mental health, and individual and family assistance for critical needs. Get your Vermont Strong plate or purchase one as a gift this holiday season. Let’s keep Vermont Strong!
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FEMA Encourages All Who Applied for Assistance to Stay in Touch
As of November 20, the U.S. Small Business Administration has approved more than $27 million for a total of 557 loans to homeowners, renters and businesses. As of November 21, FEMA and SBA have approved more than $85 million in assistance for Vermont storm survivors. FEMA is coordinating with the state to continue recovery and meet unmet needs. FEMA has approved over $23.7 million in assistance, including more than $22 million in Housing Assistance and received 6,318 applications. FEMA’s National Flood Insurance Program has paid $34.3 million in claims. Visit DisasterAssistance.gov, download the FEMA App, or call 800-621-3362. It also asks everyone to help spread the word to those who need to know. The FEMA Recovery and Resilience Resource Library has invaluable information.
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DFR Regulations, Bulletins and Orders | |
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Solar Eclipse Planning Resources Available for Individuals and Communities
Elipse's path makes Vermont an ideal place to view the total eclipse.
Those planning to view the total solar eclipse in Vermont are encouraged to start planning as soon as possible. "Vermont’s location within the 2024 total solar eclipse’s path of totality makes it an ideal place to take in the wonder and spectacle of this natural event." April 8, 2024 -- 2:14 p.m. (a partial solar eclipse will begin); 3:26 p.m. (a total eclipse will occur and last about 3 minutes). After will then continue as a partial eclipse until 4:37 p.m. (continue reading)
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A Former White House Scientist Was Scammed Out of $655,000. Then Came the IRS. - Washington Post 12.14.23
"Frances Sharples walked through the glass doors of her credit union, ready to make the worst decision of her life. She had a script from the man promising to save the retirement account she built over decades as a science adviser to the U.S. government, including in the White House. He told her to transfer more than $600,000 — and to keep her cellphone on so he could listen to her. If anyone asked whether she was put up to it, she was to reply: 'No, absolutely not,' according to her hand-scrawled notes. No one did. She handed the clerk the routing number, walked back to her dented 2005 Honda and returned home. 'Now I’m good,' she told herself. 'Now, I’m safe.' The doctorate daughter of a plumber from Queens had made a life advising the federal government on stem cells, new energy technologies and the effects of biological weapons. Despite a history of meticulousness, Sharples was victimized by a global network of online criminals, including a man with a gentle Indian accent who helped make off with much of her life savings. The government she served for more than four decades is compounding her pain. The Internal Revenue Service told Sharples, 73, she had to pay hefty taxes on the stolen money, which the federal government considers income. Tax specialists said someone in Sharples’s position could face a six-figure bill."
20 Years of ICCIE: Unveiling a Very Special Report - 12.11.23
"Here at Captive International, we are delighted to unveil a new, very special project that we have been working on this year – a publication dedicated to the 20th anniversary of ICCIE! ICCIE – the International Center for Captive Insurance Education – is now one of the most important learning sources about the captive insurance market and sets a standard that many international observers can only admire. Every year students of all ages and backgrounds study at ICCIE-accredited events, take ICCIE’s exams and receive ICCIE diplomas. It’s a qualification that is increasingly keenly sought out and admired."
58% of Life Insurers Use Artificial Intelligence or Are Interested: NAIC Survey - Insurance News Net 12.04.23
"Fifty-eight percent of life insurers are either using or have an interest in using artificial intelligence in their businesses, an NAIC working group found. That data was part of the third in a series of surveys state insurance regulators are conducting across the insurance world. The Big Data and Artificial Intelligence Working Group discussed the findings Friday during the National Association of Insurance Commissioners' fall meeting in Orlando. The 58% figure is well below the use of AI, or desire to use the technology, expressed during earlier surveys by home (70%) and auto (88%) insurers.- 'These surveys were conducted to accomplish three primary goals,' said Kevin Gaffney, Vermont insurance commissioner. 'To gain a better understanding of the insurance industry's use and governance of AI, to seek information that could aid in the development of guidance or potential regulatory framework to support the insurance industry's use of AI, and to inform regulators as to the current and plan business practices of companies.' The latest survey response was strong, Gaffney said, with 161 life insurers participating. The survey was limited to insurers who wrote at least $250 million in national life insurance premium in 2021, and covered at least 10,000 lives via term insurance the same year."
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Vermont Department of Financial Regulation
802-828-3301 • dfr.vermont.gov
89 Main Street • Montpelier, VT 05602
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