Consumer advocates want insurance regulators to do more than collect reams of industry information about property and casualty coverage around the country. They want it to be made public so that it can be analyzed for critical trends.
The National Association of Insurance Commissioners announced Friday that it is launching a data call that will gather information – including premiums, policies, claims, losses, limits, deductibles, non-renewals, and coverage types -- at a zip-code level from more than 400 property insurers. The organization said the data “will provide deeper insights into property insurance market costs, coverages, and protection gaps amid the increasing frequency and severity of natural disasters, escalating reinsurance costs, and continued inflationary pressures.”
The NAIC will share the data with the Federal Insurance Office, which will use it to conduct a nationwide assessment of the effect of climate-related financial risks on consumers, according to the Treasury Department.
“This is an important first step in creating the data infrastructure to address how climate risk is affecting home insurance affordability and availability,” said Birny Birnbaum (pictured top, left), executive director of the Center for Economic Justice. “NAIC has been missing in action on this issue.”
Birnbaum said he will be monitoring the NAIC to see if it publishes the data so that it can be widely utilized to develop timely assessments of property insurance coverage at a time when weather disasters frequently pummel the market.
“These data need to be made public so that researchers can analyze [it] to see what trends are developing in real time instead of when it’s too late to do anything about it,” Birnbaum said.
The NAIC said it will obtain more than 70 data points on more than 80% of the US property insurance market by premium volume. Insurers who are contacted will have 90 days to submit their information.
In a joint statement Friday, the CEJ and the Consumer Federation of America criticized the NAIC for failing for decades “to collect the granular consumer market outcome data needed to monitor the availability and affordability of auto and home insurance.”
In January, the NAIC updated its homeowners’ insurance report with premium information from 2021, Doug Heller, director of insurance at CFA, said in the statement.
“You can’t be an effective market regulator if it takes you two to three years to get information on what’s happening in your market,” Birnbaum said.
An NAIC spokesperson declined to comment.
The CEJ and NAIC credited the FIO for prodding the NAIC to take action on data collection. The NAIC call comes after the FIO proposed, in October 2022, to collect climate-related information from insurers. The FIO said it will collaborate with the NAIC rather than do its own data queries.
The American Property Casualty Insurance Association praised the coordination between the NAIC and FIO.
“Duplicate data calls are unnecessary and ultimately increase consumer costs,” Nat Wienecke, APCIA senior vice president of federal government relations, and Adam Shores, APCIA senior vice president of state government relations, said in a joint statement. “Insurers already provide essential data with state regulators. APCIA and our members are encouraged by this partnership.”
By standing down on its own information collection, the FIO defused the latest example of tension between federal and state regulators regarding oversight of the insurance industry. Congressional lawmakers have introduced bills to eliminate the FIO and to limit its data-collection ability.
State insurance commissioners are responsible for insurance regulation under a federal law.
“If there is going to be a data call, the obvious party to oversee it is the state regulators,” said Wes Bissett (pictured top, center), senior counsel for government affairs at the Independent Insurance Agents and Brokers of America.
The FIO was created by the Dodd Frank financial reform law in 2010. Part of the agency’s mandate is to advise the Treasury Department on access to insurance products by underserved consumers and communities.
The joint NAIC-FIO effort will benefit the insurance market, said Mark Friedlander (pictured top, right), director of corporate communications at the Insurance Information Institute.
“The most pressing need at this time is to help communities adapt to climate-related risks and make sure they are adequately insured against events that can’t be prevented,” Friedlander said in a statement. “The NAIC’s new initiative will provide relevant data and insights to the Treasury’s Federal Insurance Office and help translate them into actionable policy proposals to protect vulnerable populations.”
