NAIC Fall 2023 Meeting: AI Guidance and Research Updates
The Society of Actuaries (SOA) presented at the National Association of Insurance Commissioners (NAIC) Fall National Meeting in Orlando, FL, from Nov. 30 to Dec. 4. This event provided SOA members with an opportunity to share key research and related material with insurance regulators, actuaries and other experts.
Best Practices for Using AI/Machine Learning Tools
One of the meeting’s accomplishments included the NAIC’s adoption of the Model Bulletin on the Use of Artificial Intelligence (AI) Systems by Insurers. The bulletin serves as a guide for state insurance regulators to establish expectations for insurers implementing AI, and it addresses issues such as the risk of inaccuracies, unfair biases that could cause discrimination, and data vulnerabilities. Best practices for insurers include disclosure, explanation, compliance and oversight, and documentation of the use of AI and machine learning tools.
Hearing a Regulator’s Insights
As part of its participation in the NAIC National Meeting, the SOA hosted a member and guest reception and dinner, which featured guest speaker Pennsylvania Insurance Department Commissioner Michael Humphreys.
“The audience appreciated the insights Commissioner Humphreys was able to share,” said Kate Eubank, FSA, MAAA, Senior Experience Studies Actuary, SOA Research Institute. “It’s always interesting and helpful to hear from the perspective of insurance regulators.”
Long-Term Care and Climate-Risk Disclosures
Steven Schoonveld, FSA, MAAA, gave an overview to the NAIC Senior Issues Task Force on the effectiveness of public/private collaborations on long-term care services. He discussed a program in Minnesota to improve access to long-term care services and support, and he shared stakeholders’ views of that program, along with recommendations.
R. Dale Hall, FSA, MAAA, CERA, Managing Director, SOA Research Institute presented findings and updates to several task forces. He provided an overview of the SOA Research Institute report Analysis and Trends of U.S. Insurance Industry Climate Risk Financial Disclosures to the Life (A) Task Force (LATF), the Health (A) Task Force (HATF) and the Casualty Actuarial and Statistical Task Force (CASTF). The report includes a survey reaching insurance companies across lines to assess the industry’s progress in implementing climate disclosure processes for the 2021 reporting year.
Sharing Other Research Updates
Eubank presented findings to LATF from the 2019-2021 Variable Annuity Study Update and the Universal Life Lapse and Surrender Study. Both were published in November 2023 as part of the Experience Studies Pro series, produced through a partnership between the SOA Research Institute and LIMRA.
Hall also updated the task force on research into rating agency perspectives on insurance company capital, which was created as an addition to the fellowship tracks for corporate finance and enterprise risk management as well as individual life and annuity. The project also offers examples of quantitative tools for evaluating and differentiating an insurer’s available capital relative to modeled required capital.
Presenting to HATF, Hall and Eubank shared results from a Long-Term Care Feasibility Survey. They also opened the floor to a discussion on health care topics and ended their presentation with a summary of experience studies and practice research conducted by the SOA Research Institute in 2023.
Hall updated CASTF on the SOA Research Institute’s Actuarial Weather Extremes series. He also shared that the SOA Research Institute had received a National Science Foundation grant to implement analytics tools that will help actuaries assess the impact of wildfires. Additionally, he introduced attendees to an SOA Research Institute report outlining the interaction between InsurTech companies and U.S. regulation.
Learn more about the SOA Research Institute and its wide range of research across practices.