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1、2025 insurance regulatory outlookMessage from the Deloitte Center for Regulatory StrategyInsurers will likely encounter no shortage of challenges,heightened risk,and perhaps record-breaking loss events in the year ahead,events beyond the control of the White House or the state houses.1 Agile managem

2、ent of unexpected events will be required not only by boards but by regulators.Historically,greater risk and change has stabilized the industry,fostering more cooperation between the insurance industry,state regulators,and standard-setting organizations to safeguard Americans.2 As the sector takes o

3、n the challenges of 2025,this broad cooperation will likely be called upon again.Even so,state and federal regulators are expected to remain vigilant in overseeing insurers responses to domestic,geopolitical,and market challenges,while enforcing compliance and safety through public warnings,enforcem

4、ent,or even new congressional legislation,if necessary.The new Republican majority in Congress could consider hearings on artificial intelligence(AI)applications,the cybersecurity markets coverage capacity,the intersection of mortgage markets and insurance coverage,and insurers sales practices,but t

5、hese will likely be prompted by unforeseen events that affect a broad constituency of people or national security.Insurance costs and events often evoke populist responses from policymakers,as they unite against loss and market disruption.Simultaneously,tougher compliance demands in critical sectors

6、 where rigorous governance is required,such as at the intersection of national security and cybersecurity,could prompt decisive enforcement actions or deeper regulatory scrutiny in the event of any significant cyber breaches or attacks that trigger massive cyber insurance market coverages.3Tim Cerce

7、llePrincipalDeloitte&Touche LLPIrena Gecas-McCarthyPrincipalDeloitte&Touche LLPJim EckenrodeManaging DirectorDeloitte Services LPCollaboration between the states and the industry has often shaped governing principles that are then developed into state laws and regulations.Insurers can tackle these c

8、hallenges and opportunities through higher levels of engagement and collaboration with regulators and lawmakers.For our 2025 insurance regulatory outlook,weve identified the key areas in which increased collaboration may occur.Managing data amid innovation and threats Safeguarding and improving solv

9、ency Focusing on customer-centric regulation Tackling climate change risk and resilience challengesWe aim for our outlook to help inform your firm through the upcoming regulatory changes and challenges this year,however they unfold.We are ready to provide guidance and insight throughout and at criti

10、cal junctures as structural changes and risks on multiple fronts emerge,evolve,and grow.This is a time for insurers to remain vigilant and engaged as new frameworks and models develop at the state level.Federal agencies will likely maintain continued interested in the interconnectedness between insu

11、rance and adjacent markets,such as mortgage,housing,and finance.The rapid evolution in markets,technological advancements,and climate conditions will necessitate the involvement of all stakeholders to facilitate market solvency and safeguard consumers from current and emerging threats.Sincerely,Cont

12、entsEndnotes 24Contacts 23The road ahead 22Tackling climate change risk and resilience challenges 17Focusing on customer-centric regulation 13Safeguarding and improving solvency 9Managing data amid innovation and threats 4How the US election might affect insurers 12025 insurance regulatory outlook1H

13、ow the US election might affect insurersWith the new Trump administration and congressional control by the presidents party,federal agencies may halt or reduce enforcing existing rules and creating new ones(as is standard in an administration change),potentially focusing on market growth and innovat

14、ion without enshrining language safeguarding equity and consumer protection.However,insurers should anticipate continued federal interest in pocketbook,populist,and national security issues such as homeowners insurance cost,cybersecurity,AI innovation support,and perhaps some interest in foreign own

15、ership of US firms and offshore reinsurance activity.Tax relief is likely as the 2017 Tax Cuts and Jobs Act,signed by Trump,is up for extension and has support from the Republican party.4Federal agency forecastAlthough courts might ultimately decide the fate of rules such as the Department of Labors

16、 fiduciary rule,the new administration will likely not prioritize or maintain any posture of continuing to defend or keep it.The Securities and Exchange Commissions(SEC)climate disclosure rule will die on the vine.5 However,insurers must still comply with state disclosure regimes and adhere to inter

17、national standards,especially with large European reinsurers holding a substantial part of the US reinsurance market.At the Treasury Department,the Federal Insurance Office(FIO)will likely continue initiatives and discussions with the Department of Homeland Securitys Cybersecurity and Infrastructure

18、 Security Agency(CISA)related to the cyber insurance market and a potential federal backstop,as well as data analysis of homeowners markets.It will likely continue to examine data,monitor offshore reinsurance,and analyze the effects of weather-related catastrophes on the homeowners insurance market.

19、6 The Financial Stability Oversight Council(FSOC),chaired by new Treasury Secretary Scott Bessent,will likely appoint a Republican as the voting member with insurance expertise,rather than go forward with the previous administrations choice of Hawaii Insurance Commissioner Gordon Ito.Though insuranc

20、e designations for systemic risk will no longer be relevant given that insurers had their systemic risk designations lifted in the last decade,monitoring financial stability through housing,mortgage,and homeowners insurance in areas hit by severe weather and flooding is likely to continue.The Federa

21、l Reserve Board chair,who may stay on in the new administration until his term expires,also serves on the FSOC,and was appointed by President Trump during his first administration.Navigating the year ahead:Expect a strengthened consumer focus at the state levelWhile Congress might still scrutinize i

22、nsurance coverage for populations hard-hit by extreme weather and wildfires on behalf of their members represented constituents,insurers remain largely regulated by the states under the exemptions of the McCarranFerguson Act.7 State insurance departments consumer protection and capital requirement e

23、xpectations of insurance companies could firm up due to the differences between federal and state policy.This could be accompanied by expansion of AI scrutiny and enforcement under state unfair discrimination statutes and scrutiny of consumer outcomes as some key states toughen their current stances

24、 more than a year past the adoption of the state AI guidance and more than half a year or more into the establishment of some state regulations and guidance.8 Former Montana Insurance(and state auditor)Commissioner Troy Downing was elected to his first term in the US House as a member of the majorit

25、y Republican Party;he could bring industry insight and a market-based approach to insurance issues scrutinized by Congress.2025 insurance regulatory outlook2How the US election might affect insurers11,000 strong As such,insurers should turn more attention to the activities of key states for regulato

26、ry innovation such as California,New York,Washington,Oregon,Connecticut,Colorado,and others that may pave the way for more stringent guidelines and oversight if they perceive a deficit of oversight at the federal level.As with the first Trump administration,state insurance commissionersand state gov

27、ernments themselvesare expected to assert their role in consumer protection in annuity sales,disclosures,and claims oversight,and in capital and solvency controls monitoring.9 They will likely do this in conjunction with the infrastructure of the National Association of Insurance Commissioners(NAIC)

28、,incorporating and bolstering its existing model laws,guidelines,and ongoing plans to create a holistic solvency framework.“The effectiveness of the US state-based insurance regulatory framework in safeguarding consumers and ensuring market solvency is rooted in states ability both to act collective

29、ly when needed on national issues and to adapt and innovate to unique local circumstances and market conditions,”the NAIC officers stated on November 7,after the US presidential election.10 In the announcement,they reminded the industry that across the nation almost 11,000 insurance regulators“are s

30、upporting efforts to both expand coverage and lower risk,making coverage more attainable for consumers and markets more stable.”However,the vigor of the states actions to fill any perceived voids in regulation could create more of a patchwork system of guidelines and rules on everything from privacy

31、 to AI,despite guidelines and models that exist or will be adopted by the NAIC.Remaining vigilant and attentive to the dynamic government oversight changes requires continuous monitoring of states activity as well as agency and congressional initiatives.Insurers should be aware that unforeseen or un

32、timely risks from both nature and humans,such as extreme and unexpected weather or from more complex data use may increase.They should strive to collaborate with regulators and internal teams to promote compliance in consumer protection and solvency,aiming to thrive during these changes.32025 insura

33、nce regulatory outlook2025 insurance regulatory outlook4Managing data amid innovation and threats A framework for the enforcement of AI by insurance companies is now actively being developed by the states.12 The NAIC is shifting to a discussion on“consumer outcomes.”Specifically,the NAICs Big Data W

34、orking Group is planning to follow up on the AI Model Bulletin(19 states have adopted)with a gap analysis to see how this framework holds up against potential harm from the use of AI.Deficiencies could potentially be addressed by any or all of the following:1.Additional regulatory filings2.Disclosur

35、es to consumers or regulators3.Whether certain AI development practices may be required or prohibitedA separate NAIC group,the Third-Party Data and Models Task Force,enters its second year with plans to develop and propose a framework for the regulatory oversight of third-party data and predictive m

36、odels.13 It has not identified which models or even which types of models it is targeting.The chair of the task force,Colorado Insurance Commissioner Mike Conway,is expected to survey task force members to find out which third-party models concern them the most.What is certain is that insurers/licen

37、sees are responsible for the outcomes of third parties.There are indications,based on the fall NAIC meeting sessions,that the potential to regulate some third-party vendors is on the table for 2025 development,and enforcement-oriented scrutiny of third-party use for AI could become an emphasis of so

38、me insurance departments.Collaborative industry-regulator risk management and resilience strategies are expected to continue to address vulnerabilities,even as enhanced technology brings change in real time to regulators holding playbooks that might not be keeping pace with the latest technological

39、advancements.States may persevere under the rules and guidelines that they have in place by beginning to,or increasing enforcement of new guidelines in areas like cybersecurity governance,while continuing to enforce existing rules on claims management and annuity sales.For technical rules,like AI sy

40、stem testing,regulators will closely monitor compliance efforts as these new regulations and legislation emerge at the state and federal levels.Regulatory and supervisory expectationsAI and third-party model framework development The use of nontraditional sources of information and the use of AI in

41、underwriting and claims that may result in discrimination has prompted new state rules and guidelines in recent years.Now,states could flex their authority in the year ahead as Generative AI(GenAI)technology advances.States could begin market conduct inquiries into the insurance industry,although a

42、new federal government that potentially seeks to diminish the scope of US regulatory agency oversight may decide to stand down from operations such as the Federal Trade Commissions enforcement sweeps in fall 2024s Operation AI Comply under the Biden administration.11The NAICs new AI Systems Evaluati

43、on Working Group has announced it plans,through its training collaboration forum committee structure,to move forward on insurers AI systems market conduct evaluation through 2025 and 2026.14 The organization,through remarks by Iowa Insurance Commissioner Doug Ommen,briefed stakeholders November 12 o

44、n a plan to develop new regulatory tools or guidance to assist state regulators in evaluating insurers and licensed entities AI systems and programs.15 This plans implementation will follow the current phase of identifying existing tools,resources,materials,and training.The NAIC plan also anticipate

45、s a coordinated effort to develop enforcement tools for AI use.The NAICs member regulators are seeking information about the necessary tools and resources to begin enforcing the AI Bulletin adopted in late 2023.In the long term,the NAIC aims to integrate the overall supervisory AI regulatory framewo

46、rk into either the existing Market Regulation Exam Handbook or potentially create a stand-alone AI conduct handbook for state use.According to the timeline,discussions on the market regulation process and recommendations for updates to the Market Regulation and Consumer Affairs Committee are schedul

47、ed for 2025,with support for implementing the newly developed proposals extending into 2026 and beyond.2025 insurance regulatory outlook5Managing data amid innovation and threatsIndeed,many states have already begun incorporating these AI usage guidelines and regulations into their market conduct ex

48、aminations,so firms should expect the potential for increased regulatory questioning during this initial phase of oversight,followed by possible market conduct enforcement activity later in the year.Insurers can likely expect more activity from New York,Colorado,and Connecticutstates that have more

49、rigorous rules that go beyond the 2023 NAIC Model Bulletin:Use of Artificial Intelligence Systems by Insurers,adopted by almost 20 states so far.16 More jurisdictions will likely join them in requiring a certain threshold of AI outcomes testing,as well as a robust governance structure.Notably,Colora

50、do has extended the deadline to meet quantitative testing requirements for AI bias to year end due to ongoing development of its rule.17 The District of Columbia may push further on its 2024 study of unintentional bias in passenger auto underwriting.18Still,other states could pass legislation on AI

51、use by businesses,scoping insurers and potentially giving more authority and oversight to officials beyond state insurance departments.19On the federal level,Congress could consider examining AI applications(to foster growth and innovation and prevent fraud)to keep a human in the loop for oversight,

52、but the outlook for federal AI legislation is unclear.20 It could also address existing state laws or rule mandates for AI use to provide a more streamlined approach to a flurry of state activity.21 Now,the work the Treasury will undertake will likely comport with national security interests and fos

53、tering innovation for market purposes rather than consumer guardrails.22Insurers use of third-party providers will also come under more scrutiny as the NAIC and the Third-Party Data and Models Task Force prepares a framework for the regulatory oversight of third-party data and predictive models.23 S

54、uch a model or guidance for oversight could require state legislative changes for implementation,or it could be softened into guidance.24Despite the lack of regulation in place governing third-party models,insurers will increasingly be expected to answer state regulators queries on how their externa

55、l and internal models work and be able to explain outcomes even if they do not understand the algorithms used.As the New York Department of Financial Services(NYDFS)stated in its circular letter on the use of AI systems and external consumer data and information sources last summer,there is an“expec

56、tation that insurers conduct appropriate oversight over third-party vendors.”25 However,insurers might find some respite from the necessity of having to thoroughly explain how these third-party models work.State regulatorsincluding the NYDFShave indicated they are interested in outcomes or results r

57、ather than the intricacies of the models themselves.These outcomes may be vigorously scrutinized in some instances.This year will mark the first such examination,however informal,through Colorados examination of life insurers AI governance framework,as both regulators and industry begin to ascend a

58、learning curvein Colorados case,the life insurers governance framework designed to identify and prevent AI bias.262025 insurance regulatory outlook6Managing data amid innovation and threatsCyber risk The FIO has been working extensively to examine such a federal response to catastrophic cyber risk.T

59、he US market is the worlds largest,yet it“has pulled back from covering catastrophic cyber incidents,”the agency has warned.27 Ongoing collaboration with the CISA at the Department of Homeland Security and the Office of the National Cyber Director(ONCD)at the White House will continue,if not acceler

60、ate,in 2025.28 This exploratory work could result in a tangible proposal,as government and the reinsurance industry work to reduce the economic impact of a cyber incidents through both private insurance and a federal insurance backstop.On the state cybersecurity regulatory front,New York is one juri

61、sdiction poised to actively enforce stringent cybersecurity oversight regulations for insurers,covering governance,encryption,incident response,and continuity management.These requirements,part of the amended 23 NYCRR 500,took effect on November 1,2024,a year after their proposal.29Why firms should

62、take notice AI and third-party model framework developmentTesting AI for underwriting and coverage denials is evolving,with some states requiring principles-based approaches.Companies should be able to demonstrate fair and nondiscriminatory internal processes and show ongoing progress in adopting an

63、d vetting AI technology within their governance and testing protocols.They must also quickly address any unjustified or discriminatory outcomes from models.Though discussions on quantitative testing protocols for AI use are challenging,and enforcement will likely involve a period of adaptation and n

64、egotiation between departments and insurers,insurers may find that a well-crafted protocol that aligns with state laws on unfair discrimination and is dynamic and able to expand to further rules on quantitative testing is now essential.30Data security Although larger insurers will likely have had to

65、 develop a more robust cybersecurity framework by now,New York and other regulators may expect plans for remediating material inadequacies.The NAIC is moving forward with its proposed cybersecurity event portal.The confidential cybersecurity event repository“is aimed at enhancing the cybersecurity e

66、vent notification process within the US insurance sector,”the NAIC stated.31 In the early stages,state regulators intend for the portal to be focused on facilitating notices among states of cyber event notices with a uniform notification method on cyber breach events.A proposal for a potential feder

67、al backstop solution for catastrophic cyber incidents could emerge this year.32 Although enabling legislation would be necessary,last years discussions about public-private partnerships and cyber exclusions have set the stage for further exploration of a federal response.33 But first,any federal ins

68、urance response to catastrophic cyber risk will call for the in-depth involvement of federal and state officials and private industry.Legislation must be carefully crafted to allow the federal government to absorb some monetary losses with commercial property&casualty(P&C)insurers in the event of a

69、catastrophic event,perhaps similar to the structure of the Terrorism Risk Insurance Act.34How firms should respondAI and third-party model framework development State regulators will want to see that insurers are actively designing and updating their governance oversight structures for compliance wi

70、th expectations in cyber disclosure and AI.35Engaging extensively with regulators,federal officials,and lawmakers on issues like bias testing and data protocols might be demanding in terms of time,but it can ultimately benefit insurers long term.Insurers should involve data scientists and risk manag

71、ers in their conversations with states and the NAIC to help shape effective policies.Additionally,insurers should continue to champion their unique model to prevent overbroad or duplicative legislation from Congress or the states that are inappropriately applied to the industry or create unintended

72、hampering of the market and other consequences.362025 insurance regulatory outlook7Managing data amid innovation and threatsData security While New York and other states do not mandate a specific standard or framework,firms should be prepared to deliver a thorough cybersecurity risk assessment.37 Ex

73、ternal frameworks like the National Institute of Standards and Technology(NIST)Cybersecurity Framework can effectively meet these requirements,regulators have noted.38 New York-based companies that are encountering difficulties in compliance may use the NYDFS portal to self-report.By demonstrating s

74、ubstantial adherence to sections of the regulation,they can work toward obtaining their Certification of Material Compliance.39 The NYDFS will likely be a source of further guidance and enforcement as threats evolve.The NYDFS issued guidance in mid-October to assist firms in managing cybersecurity r

75、isks associated with the use of AI,detailing actions and policies that need to be in place to identify and mitigate risk from ever more sophisticated AI-enabled attacks.40Insurers doing business in New York are expected to annually update and test their business continuity and disaster response plan

76、s with key staff and backup systems;scrupulously manage third-party systems and vendors;and train all personnel.These expectations will likely become an industry standard,as other states may follow New Yorks lead.41Regulators are prepared to act and collect steep fines and will publicize alleged sho

77、rtcomings in compliance of existing rules not only going forward but retrospectively.New York regulators have made cyber hygiene a priority.They also proactively warn about emerging threats and expect ongoing vigilance,so staying attentive to their communications is vital.42 82025 insurance regulato

78、ry outlook2025 insurance regulatory outlook9Safeguarding and improving solvencyThe NAIC leadership is heavily focused on solvency,with those in key roles fluent in financial supervision at the state and federal levels.The federal government could continue to be actively involved in monitoring the fi

79、nancial stability of the insurance industry and its effect on other financial markets through the FIO with a seasoned director,Steven Seitz,who has served across several administrations.Regulatory and supervisory expectationsStructural change in the life insurance industry has been marked by a“mater

80、ial,observable shift”in investment strategies toward more private assets,more structured securities,and more complex assets.43 The NAIC is now working on a multilayered approach to enhance oversight and scrutiny of these more complex and sometimes opaque investments through a new governance structur

81、e for due diligence and assessment of credit rating functions and other industry-wide analytics.Among the NAICs plans this year will be to establish a new governance structure or framework for the organizations Securities Valuation Office(SVO),which could be the key in the effort to enhance transpar

82、ency and guardrails for solvency.These initiatives,kick-started in 2022 with the adoption of Regulatory Considerations Applicable(But Not Exclusive)to Private Equity(PE)Owned Insurers,might be realized this year in the form of a new solvency framework for the NAICs long-term securities oversight vis

83、ion,which includes more transparency and more scrutiny of offshore investments for capital adequacy.An outside consultant will likely be hired in 2025 to help design and implement a“strong due diligence program to oversee the industrys use of credit rating providers.”44 As part of these broader solv

84、ency oversight efforts,the NAICs Structured Securities Group and other working groups will continue analyzing the credit risks of collateralized loan obligations(CLOs)owned by state-regulated insurance companies.The organization will continue work on the financial modeling of these debt-backed struc

85、tured securities to better capture their risk.State solvency regulators stated goals are to reduce perceived risk-based capital(RBC)arbitrage and address the tail risk in structured finance tranches,and it will continue as part of a multi-year project.45 This work is expected to gain further momentu

86、m in 2025 and could result in increased RBC charges for CLOs for year-end 2025.46The NAIC has also been prioritizing reducing the organizations so-called“blind reliance”on credit rating agencies and will further address policies to analyze investment risk,such as increasing the NAICs designation aut

87、hority over securities.47 Workstreams under the Financial Condition Committee will continue to advance interrelated initiatives focused on asset risk and credit risk in 2024.48 The NAIC is capping off years of ongoing efforts to enhance solvency oversight through greater transparency,as well as refi

88、ne RBC charges for an array of complex investments and securities key to a business,that must ultimately be able to pay policyholders over a long-term basis.NAIC designation authority over securities is due to increase as part of the effort to decrease the SVOs dependence on the ratings from externa

89、l agencies.49 Concerns over the growth of asset-intensive reinsurance that is transferring risk to firms in countries where reserve requirements might be lower and inadequate in a stress scenario underlie many NAIC activities already.50 In the short term,state life insurance actuaries will demand gr

90、eater transparency on the reserves ceded offshore and the risk-based capital retained given the increase in private equity ownership of life insurers.51 The FSOC has repeatedly emphasized this bears attention out of concern for the failure of one or more offshore reinsurers utilized by US life insur

91、ers.It is unclear if this scrutiny will continue from the FSOC in 2025 under Bessent,but it will from states and the NAIC,according to the FSOCs final annual report under the Biden administration in December,in which it urged that“state insurance authorities and the NAIC consider concentrations of r

92、isk and counterparty exposure to affiliated offshore entities.”522025 insurance regulatory outlook10Safeguarding and improving solvencyThe NAIC plans to determine if actuarial guideline analysis should be comprehensive or limited,factoring in the size and impact of reinsurance treaties,and will deci

93、de whether to assess the risk of firms less reliant on aggressive asset returns to sustain reserves.With these considerations underway,a new actuarial guideline adopted for asset adequacy testing of reserves could go into effect at year-end 2025,becoming more prescriptive by 2026.53 A common capital

94、 language emerges The International Association of Insurance Supervisors(IAIS)flagship capital standard is now ready for implementation after five years of monitoring results and more than 12 years since the Financial Stability Board prompted its development.54 The new common language of the Insuran

95、ce Capital Standard(ICS)will be used to scrutinize internationally active insurance groups by evaluating valuation and qualifying capital resources.55 Starting this year,it will serve as the quantitative component of the IAIS Common Framework for the Supervision of Internationally Active Insurance G

96、roups(ComFrame).56 The long-anticipated decision by the IAISs Executive Committee in mid-November to accept the US version of the ICSthe homegrown Aggregation Method(AM)as a standard yielding comparable outcomes to the ICS can enable states to align their insurance capital calculations with the new

97、global standards.57 The Treasury Department,Federal Reserve Board of Governors(FRB),state regulators,and NAIC(collectively known as TEAM USA)determined the IAIS-developed ICS did not fit well with the state-based supervisory regime or the US insurance market.58 The US capital calculation methodology

98、 more appropriately reflects underlying risks,TEAM USA had repeatedly stressed on the international stage.59 Early stages of implementation of the ICS and the AM will be closely monitored by the IAIS global insurance supervisors,spurring increased engagement with global firms as well as with the NAI

99、C and regulators stateside.60 The NAIC stated that“collaboration and coordination will continue”with global supervisors and the IAIS to adapt the ICS to each jurisdiction and develop an appropriate implementation assessment framework.As work transitions into implementation,the NAIC will work domesti

100、cally on its approach to the AM as the US implementation of the ICS.61 The IAIS pointed to some areasspecifically treatment of interest rate risk and timing of supervisory interventionwhere it would like to see more convergence between the AM and the standard ICS during the implementation process.Ex

101、pect some heavy lifting from TEAM USA.The IAIS noted in its release during the annual conference in December,“In using the Final AM as its implementation of the ICS,the US commits to addressing those areas in appropriate ways,which will be reviewed during the IAIS ICS implementation assessment proce

102、ss.”62Why firms should take notice The NAIC will play a crucial role this year in continuing to shape financial solvency oversight,in particular in scrutinizing the processes that could jeopardize or compromise the consistency and uniformity of the US solvency framework.In particular,insurers should

103、 watch closely the NAICs actions with respect to future capital requirements in asset-intensive reinsurance transactions and the use of credit ratings for securities.Insurers balance sheets will be affected down the line,perhaps sooner than they had anticipated.Specifically,the activity of the NAICs

104、 Financial Condition Committee and its task forces and working groups will persist into 2025,likely with a focus on monitoring RBC formulas,addressing regulatory redundancy concerns,and cooperating with state and federal regulators on international group capital matters.Insurers should remain attent

105、ive to the FIOs continued concern about the increasing shift of reinsurance business to Bermuda,Barbados,and the Cayman Islands in recent years.The FIO continues to be vigilant in its analysis of potential heightened credit risk for the life sector.63 2025 insurance regulatory outlook11Safeguarding

106、and improving solvencyCongress and policymakers remain concerned that life insurers are adding more risk to their balance sheets by moving toward PE-intensive investments and ownership.64 These concerns might mount and result in more questions and attempts to gain transparency into the balance sheet

107、s of companiesand perhaps to beef them up.This ongoing inflow of PE money into the industry is“likely to drive further M&A activity as they acquire life and annuity insurers in a bid to grow books of business and,in some cases,take balanced risks to extract a greater degree of return from underlying

108、 assets,”as we noted in our 2024 outlook.65 Bessent has a hedgefund background and so is comfortable in the sector,but he also may be able to see vulnerabilities in the reinsurance and investing arenas that bear monitoring.66If state regulators suspect these issues may be examined by their federal c

109、ounterparts at the FSOC,they may be forced to,with committee work through the NAIC,accelerate action themselves with maintaining high levels of RBC for some structured security investments and more rigorous asset adequacy testing of life insurance reserves.67How firms should respondA modern solvency

110、 approach will be a large undertaking,with high stakes for insurance investments.The framework,once deployed,could change oversight protocols and affect the capital amounts insurers need to keep on hand.Construction of the modernized securities oversight framework,beginning in 2025 under the auspice

111、s of a consultant,will demand the engagement of many stakeholders.This project should serve as an opportunity for insurers,particularly life insurers,to help demonstrate their internal solvency oversight mechanisms are up to standard.Insurers should also anticipate a potential need for more capital

112、requirements and disclosures from regulators down the road for certain structured securities and other investment products viewed by the NAIC as more risky than traditional investments.68 Offshore reinsurance asset adequacy will likely remain in states sights throughout the year.69The life insurance

113、 industry can help shape the outcomes through its advocacy for a disclosure-based approach,rather than one that requires additional analysis and testing of asset adequacy.However,insurers should prepare for the potential of increased testing and a potential new framework for investment oversight.70G

114、lobal insurance firms headquartered in the United States should also work closely with TEAM USA supervisors and the NAIC in their work adjusting the concerns of the IAIS on interest rate risk and regulatory intervention timing issues during the ICS implementation assessment process.71Insurers should

115、 have medium-to long-term capital planning in place for the AM implementation and be ready to work and collaborate with regulators on their framework and results.Insurers should be well underway in their review of capital needs and the processes for determining them.Larger multinational insurers sub

116、ject to these new capital standards should prepare to learn the common language for capital standards,as it has arrived stateside.72 122025 insurance regulatory outlook2025 insurance regulatory outlook13Focusing on customer-centric regulationUnder new NAIC President(North Dakota Insurance Commission

117、er)Jon Godfread,the state standard-setting organizations focus will likely prioritize promoting innovation in insurance and enhancing industry dialogue to improve market service.Any attempts to introduce federal oversight in areas such as property casualty insurance,financial stability and solvency,

118、or annuity sales will probably encounter strong resistance from Godfread.The newly-reelected North Dakota insurance commissioner has expressed his dedication as“the work of being a champion of our state-based regulatory framework and safeguarding the interests of our citizens.”73 The states under Go

119、dfreads leadership are expected to continue to experiment as they craft guidelines and models that address insurance-specific use concerns in their jurisdictions.Regulatory and supervisory expectationsRegulators will be paying close attention to insurance companies sales practices for a number of pr

120、oducts,including annuities,even as courts continue to weigh the applicability of a sweeping new rule.While customer-centric experiences have contributed to the popularity of embedded insurance(distributing insurance policies bundled into another product at the point of sale),and partnerships expand

121、between insurers and other industries,regulators will be monitoring sales practices for noncompliance.74The US Department of Labor(DOL)under the new administration will likely drop a legal pursuit to uphold the 2024 fiduciary rule,which was stayed by two federal district courts in Texas last summer.

122、75 The rule was set to go into effect September 23rd,2024 before industry groups successfully pushed for a stay,which was appealed that same month.76 As the case made its way through the courts,the potential outcome of fiduciary standard oversight governing fixed annuities in employment retirement p

123、lans remained uncertain anyway and will likely disappear.77 Even without the quick resolution of the case,which sweeps in non-securities investment fixed annuity products,sales practices for the sale of variable annuities will continue to come under scrutiny from state and federal regulators or agen

124、cies.The Financial Industry Regulatory Authority(FINRA)will likely continue to actively enforce violations of the SECs Regulation Best Interest(Reg BI),expecting a certain standard of conduct for broker-dealers and sales professionals when they recommend or sell to retail customers securities or inv

125、estment strategies,including those involving variable annuities.78While the SEC had been keeping a close eye on disclosure violations of Reg BI in sales of investment products to retail customersreminding the market there is no“implied consent”its enforcement pattern could slow during the next year

126、with staff turnover and new priorities.79 However,insurers can still expect annuity sales enforcement as it might take some time to dismantle enforcement infrastructure and agency practices.Instead,state enforcement of various best interest standards under the NAICs widely adopted Suitability in Ann

127、uity Transactions Model Regulation(#275),which was created to prevent abusive and predatory practices by life insurance and annuity producers,will probably be wielded as necessary.80 The vast majority of states have adopted the Suitability in Annuity Transactions Model Regulation,after more than fou

128、r years,state authority is primed to protect retirement annuity buyers.81 The NAIC Life and Annuity Committee is offering guidance in draft form on insurers obligations under the safe harbor provisions in the model act,which would recognize that insurers compliance under comparable standards satisfi

129、es compliance with the state suitability regulations.However,the committee warned insurers that nothing in the safe harbor language would limit the insurance commissioners ability to investigate and enforce the provisions of this regulation.82 State insurance departments will likely keep up their on

130、going enforcement of auto insurance claims disclosures,overcharges,and notifications to consumers,although exams and fines tend to be smaller and more narrowly defined than in the multi-state conduct exams of years past.States may focus their enforcement on one area for an extended period of time,so

131、mething NY insurers experienced with vehicle registration information.83 We expect that trend is likely to continue.2025 insurance regulatory outlook14Focusing on customer-centric regulationRegulators will also seek to educate consumers about spiking rates,and attempt to prevent coverage lapses and

132、market coverage shortages due to weather,while addressing questions from consumers.84 Nationwide,the 2023 weighted average premium rate for owner-occupied homeowners insurance increased by 11.3%.In total,25 states saw an effective rate change of at least 10%in 2023,compared to only six states in 202

133、2.85 The highest effective rate changes were in heavily climate-impacted states.86 New privacy protections model could be adopted Insurers can expect a new privacy protections model law draft from the NAIC in 2025,if progress continues at the same rate.Whether it comes up for adoption by the NAIC pl

134、enary in the second half of the year is not clear,but the potential for a revised path forward exists by year end after a multi-year period of pauses and restarts.87The NAIC could then send the privacy data framework of required disclosures,information-sharing and retention,and opt-out requirements

135、to state legislatures for adoption likely in spring 2026.This will only occur if the final model is palatable to a wide range of stakeholders,as previous concerns with state legislative adoption hampered the first attempt at a privacy model in 2023.88 The NAIC will continue to address such concerns.

136、As an example,the most recent draft in progress is more expansive and modernizes its oversight of the handling and sharing of consumer data and information.89 Meanwhile,the refashioned Privacy of Consumer Information Act draft expands into and addresses third-party arrangements,access,correction,and

137、 deletion of nonpublic personal information,the sale of nonpublic personal Information,and the use and disclosure of sensitive personal information.90 Consumer advocates will continue to push for stricter controls around protection of nonpublic consumer information,governance and physical data secur

138、ity practices to protect nonpublic personal data from unauthorized access,destruction,use,modification,or disclosure.Rapid breach notification systems will be expected to be in place.The full slate of consumer privacy protections will likely be enshrined in some form in an NAIC model law in 2025.91

139、NAIC leadership is expected to align with previous leadership priorities on financial transparency and disclosure while supporting innovation and growth within the industry.92 On February 14,2025,the NAIC announced its 2025 roadmap of initiatives:“Securing Tomorrow:Advancing State-Based Regulation.”

140、93However,the process could still hit roadblocks and the privacy model drafts scope could be tempered amid leadership changes and stakeholder feedback.Industry representatives remain concerned that“a geographically and politically diverse group of 20 states,which represent more than half of the popu

141、lation in our country,have now enacted comprehensive privacy laws,”as one large insurance industry organization put it.94 This group advised the Privacy Protections Working Group(PPWG)to not propose requirements and industry burdens that are dramatically different and harsher than the privacy mandat

142、es established for other industries.Why firms should take notice Insurers should anticipate more interest in compliance,more mature privacy governance(even without a model act),and greater market conduct activity from state and federal regulators.Specific focus areas include annuity sales from life

143、insurers and disclosures,and timeliness in claims and other responses from private passenger auto insurers.Regulators will want to find ways to mitigate steep rate increases and market withdrawals through agreements and potential legislation permitting reductions in premiums for safety actions such

144、as usage-based insurance and landscape and dwelling fortification against climate perils.952025 insurance regulatory outlook15Focusing on customer-centric regulationHow firms should respondFirms should participate in the development of the model act from the PPWG to make sure that the final product

145、is well-tailored to the insurance industry and allows insurers to market to consumers with transparent disclosures to prevent future issues.96 Even before such a model is adopted and implemented,insurers should review their data retention and deletion protocols and modernize their data safety system

146、s so they can respond nimbly and avoid changes in compressed time frames.Early stakeholder engagement tends to bring tangible results when a model law is being drafted.Thus,it is paramount to track new compliance frameworks and provide well-supported input to help regulators fashion the best outcome

147、s for the insurance industry and its stakeholders,including firms and consumers.Insurers are wise to keep abreast of emerging guidelines and rules but should not lose sight of the central compliance issue of timeliness when responding to policyholders during the claims process.Ascertaining that your

148、 firm has a sound compliance foundation with efforts to strengthen and remediate as needed will remain crucial to withstanding regulatory scrutiny.97 NAIC leadership is expected to align with previous leadership priorities on financial transparency and disclosure while supporting innovation and grow

149、th within the industry.162025 insurance regulatory outlook2025 insurance regulatory outlook17Tackling climate change risk and resilience challengesShaping policymaker priorities are jurisdictional climate risk events and threats,augmented by the prevalence of catastrophic weather in major areas of t

150、he United States on an ever-heating globe,which in 2024 recorded its warmest July on record.Congressional and stakeholder pressure is due to intensify for a national solution to the economics of billions of dollars of property losses and the threat of insolvency and lack of private and federal fundi

151、ng.Regulatory expectationsCatastrophic,more frequent,and deadly flooding as well as sustained,powerful hurricanes and windstorms continue to surpass records and cause billions in economic and insured damages.98 Last July was the warmest July on record for the globe in the National Oceanic and Atmosp

152、heric Associations(NOAA)175-year record,breaking the longest-record warm global temperature streak on modern record.99 Jurisdictions and regions such as California,the nations largest state insurance market,the Southeast and Atlantic and Gulf coastal areas,and affected Western states will continue t

153、o prioritize maintaining and expanding insurance coverage,though at an increased cost for homeowners policies in the wildfire-prone areas,by seeking a more streamlined review of rate hikes.However,market and regulatory tensions among stakeholders will likely persist.The insurance market and the stat

154、e will strive to find a balance that allows for coverage without triggering further coverage withdrawals from the market.Industry,consumer advocates,and policy officials will continue to engage for interim solutions.New or revised state legislation could emerge to address the growing wildfire risk t

155、o homeowners and the growth of Californias FAIR Plan,the residual market for basic coverage that cant otherwise be obtained through the traditional insurance market.100 The Colorado FAIR Plan,formed in 2023,could be followed by others if extreme weather and natural catastrophes continue to repeatedl

156、y ravage certain regions of the country.As coverage challenges continue to challenge the state insurance market,look for burgeoning efforts to use forward-looking data modeling to better anticipate losses and set prices.For example,the California Insurance Department is seeking to create a forward-l

157、ooking,publicly available wildfire risk model to predict future wildfire losses,likely forthcoming in April.101 This effort will be one of the departments myriad strategies in building safer communities and expanding access to insurance coverage.102 Meanwhile,legislative efforts to consider easing p

158、remiums to reflect homeowners wildfire mitigation measures could well reemerge,possibly with altered language and parameters.103Education and mitigation effort will take center stage The NAIC and individual states are expected to ramp up prioritizing mitigation and similar efforts to address the acc

159、essibility and affordability of homeowners insurance with escalating premiums as homes continue to get hit hard by weather.The NAIC has warned that“the mix of elevated risks and elevated costs due to inflation”are now being felt directly by policyholders,with the P&C industry recording underwriting

160、losses of$24.9 billion in 2022 and$21.2 billion in 2023;the organization listed a series of ongoing perils threatening multibillions of dollars in economic losses,resulting in higher rates and fewer coverage options for policyholders.104 There is not enough uptake in vulnerable areas,either.Nearly a

161、 quarter million US properties have repeated flood claims through the National Flood Insurance Program,with fewer than one in four properties treated for risk mitigations like floodproofing or structure elevation.105 We see insurers playing a key part in educating consumers and their own state regul

162、ators,especially in dialogues and conversations regarding potential premium reductions to reflect reduced structural risk through resilience and mitigation efforts.106 There will be renewed vigor to educate and reach consumers,perhaps in efforts similar to the Colorado Division of Insurances series

163、of in-person stakeholder meetings to get input from consumers on homeowners insurance premiums,and mitigate the effects of wildfires via structural change to homes and land.2025 insurance regulatory outlook18Tackling climate change risk and resilience challengesAs coverage challenges continue to cha

164、llenge the state insurance market,look for burgeoning efforts to use forward looking data modeling to better anticipate losses and set prices.The NAIC will continue to maintain a dashboard of risk mitigation programs to serve as a resource for state regulators to establish their own mitigation progr

165、ams,a tool that will likely become more prominent as regions once thought safer from such perils are increasingly less so.The NAIC will also act as a forum for presentations on efforts and programs such as the Strengthen Alabama Homes Program and California and Minnesotas incentive programs for home

166、s that meet a certain standard of fortification or hardening against damage from storms and wildfire.107 The NAIC also has spotlighted efforts such as Kentuckys Department of Insurance grant program for homeowners in the state who fortify their homes to standards,as well as the Louisiana Fortify Hom

167、es Program,which offers up to$10,000 in grants for homeowners who strengthen their roofs against wind damage from hurricanes.108 States will continue to emphasize this hardening approach and bolster or seek to initiate such programs that alleviate costs by reducing potential damage.In fact,the Natio

168、nal Council of Insurance Legislators adopted a model in late fall based on Alabamas vaunted roof and home fortification program known as the Strengthen Homes Program Model Act.This model allows for grants and premium discounts or rate reductions on coverage if construction to mitigate catastrophic w

169、indstorm damage is actuarially justifiable and there is“credible evidence”of cost savings that can be attributed to the improved construction.The program fortifications must meet or exceed the“fortified roof”standard of the Insurance Institute for Business&Home Safety,according to the model that was

170、 created to be introduced in individual state legislatures in 2025.109 Smaller-scale climate resilience action items will also increase this year.110 These will include climate modeling that potentially includes a need for increases in P&C insurers risk-based capital.With these changes,state regulat

171、ors will likely pivot to new forward-looking catastrophe modeling versus the traditional use of historical data.111 Ongoing focus from economic policy officials about the intersection of the homeowners insurance and residential mortgage markets could blossom into action items for the new administrat

172、ion,particularly in the area of housing affordability,112 and these steps could begin this year.113Insurers should expect scrutiny of their practices from NAIC,the FIO,and perhaps the Republican Congress as well.While there are other causes of high property premiums beside climate,such as the cost o

173、f construction materials,underlying home values,the cost and availability of labor,and the impact of litigation,perils continue to cause tens of billions of dollars of losses each year.114More data calls may be on the horizonFirms might face the prospect of more property insurance data calls on clim

174、ate-related themes in the coming year.Current FIO Director Seitz,in underscoring concern that“it is increasingly difficult for homeowners and consumers to find and afford homeowners insurance,”noted that“our partnership with NAIC and state regulators on data collection is an important initiative for

175、 the American public,insurers,and state regulators.”115 The Trump Treasury will need to address weather,economic,and insurance costs to markets and consumers.The 2024 homeowners data call(undertaken by the NAIC with anonymized data shared with the FIO)is being used to analyze key risk metrics such a

176、s premiums,claims frequency,nonrenewal rates,and loss ratios.116 The FIO is using this data to conduct a nationwide assessment of homeowners climate-related insurance risk.117 In 2025,the FIO could present its analysis with suggested action items for the sector.1182025 insurance regulatory outlook19

177、Tackling climate change risk and resilience challengesWhy firms should take noticeInsurers can expect state insurance commissioners in some jurisdictions to initiate coverage denial moratoria on coverage in vulnerable areas,such as those affected by wildfire.Just this past September,California issue

178、d a mandatory one-year moratorium to preserve residential insurance coverage for policyholders affected by wildfires in major Southern California counties under the authority of a state-issued bulletin.119 California Insurance Commissioner Ricardo Lara stands ready to enforce the states inaugural ca

179、tastrophe modeling and rate regulation to increase wildfire coverage in distressed areas.120 Lara announced in December that major insurance companies are now required to increase the writing of comprehensive policies in these areas to reach no less than 85%of their statewide market share.Over four

180、years ago,the NYDFS provided guidance on handling financial risks from climate change.It is anticipated that after years of discussions and capacity-building,the state will now demand more advanced management processes and implementation,particularly from larger companies.Initially,insurers were ask

181、ed to understand the risk and develop a strong governance system.Now,it is possible that the NYDFS could move beyond monitoring to mandating action in areas where it perceives a lack of substantial progress from insurers.121Going forward,state regulators may increase requests and pressure on P&C ins

182、urers to furnish and explain data.The NAIC and the states will be building upon their collective efforts on climate in 2025,perhaps through future partnerships.The FIO is using the data shared by the NAIC to conduct a nationwide analysis of climate-related insurance risk to consumers across the Unit

183、ed States for owner-occupied homeowners multiperil insurance policies from 20182022.This analysis will likely accompany suggested action items for the sector and could herald an era of more data collection initiatives from the P&C industry to get further precision.122Insurance companies should also

184、closely monitor potential congressional action on addressing climate risk and extreme weather,even as the fate of the SECs March 2024 landmark climate rule will likely be shelved,as greenhouse gas emissions are not an issue in the Trump administration.123 The NAIC has urged members of Congress to he

185、lp homeowners by“supporting any of the myriad mitigation and risk reduction bills pending”that have been before them,and pass the Disaster Mitigation and Tax Parity Act.The act was first introduced in 2023,which excludes from gross income any qualified catastrophe mitigation payment made under a sta

186、te-based catastrophe loss mitigation program.124 Insurers can advocate before Congress to give tax relief to homeowners participating in state-provided disaster mitigation grants in efforts to better withstand storms and other perils.How firms should respondInsurers should be ready to answer any que

187、stions from state regulators on their climate risks,from transition to physical,in broad terms,and with a plan for more detailed data and disclosures across their businesses.Governance in managing climate risk must be an ongoing pursuit,and those in board and management roles should be ready to show

188、 they are taking the challenges of climate risk seriously.125 Regulators are actively monitoring their engagement and efforts,and will expect increased proficiency in managing financial risk from climate this year.126Firms should also be prepared to adapt to a rapidly changing environment on the gro

189、und and in Washington.127 They should not only continue to advocate for their positions based on their own property data,but also be prepared to submit it in some form to federal agencies for review or analysis as interest increases in a potential federal role in monitoring and providing potential o

190、versight amid rising climate-related financial risk and affordability concerns.1282025 insurance regulatory outlook20Tackling climate change risk and resilience challengesInsurers should also heed the NAICs recent move of adopting an RBC disclosure requirement for climate risk perils.This requiremen

191、t serves to assist state regulators in discussions with insurers that face higher risk.It scopes in the impact of climate-related risks on the modeled losses for the perils of hurricane and wildfire and will be effective for year-end 2024,2025,and 2026 reporting.The NAIC assured the industry that th

192、e intent of the disclosures is for informational purposes only and not to determine a new risk-based catastrophe charge.129 Insurers should monitor any new initiatives on RBC for climate risks,though there is disagreement on whether the RBC is the appropriate tool.130 Future modeling work may occur.

193、In New York,regulators will continue to call upon insurers to adequately prepare to identify,assess,and manage climate risks and challenges.Insurers should take measures relating to the four pillars of governance,risk management,strategy,and metrics and targets in the NAICs climate-related financial

194、 disclosure reports.The NYDFS called out shortcomings in progress for the risk management,strategy,metrics and target climate disclosure pillars.It noted that insurers did not show the same consistent level of progress but lauded the implementation of guidance expectations.131 Life insurers overall

195、seem to be further along in addressing climate-related risks than do P&C insurers,according to the NYDFS.132 It attributed this to life insurers long-term business strategy for their assets and liabilities,which can extend past 50 years.While P&C insurers have made progress,13%of them are in the“yet

196、 to start”category even as the physical manifestations of climate change.133 Internationally,the IAIS will be working on its fourth consultation on climate risk,which is set to include updates on disclosure-related requests and material,macroprudential considerations and supervisory cooperation.134

197、Comments were due in late October,allowing work to advance this year on drafting the document.Insurer feedback and participation during this process will help create a more comprehensive oversight plan for regulators to evaluate climate-related risks among insurers and their markets.Insurers should

198、embrace the ongoing implementation of the plan with the IAIS as it seeks to provide a broader platform for sharing climate disclosure regimes,thus allowing supervisors to learn and build upon real-world industry experience.135 The IAIS is also suggesting that insurance supervisors should consider in

199、terdependencies between climate-related risks,such as physical and transition risks,and the effects of delays in transition,such as the severity and frequency of physical risk events leading to bigger economic losses from weather-related events.136 212025 insurance regulatory outlook2025 insurance r

200、egulatory outlook22The coming year will continue to bring rapid technological growth and increasing risks.Insurers will need to quickly adapt,utilizing available resources and tools.The local,federal,and global community will closely observe how the US insurance market handles these pressures under

201、existing and nascent compliance frameworks.Insurers should prioritize their continued focus on collaboration and engagement with stakeholders in the insurance regulatory sphere while expanding and fortifying their compliance frameworks in concert with guidance from state,federal,and international re

202、gulators.The impact of insurance on communities will likely remain a priority in the coming months and years and will require a collective effort.Insurers would do well to embrace and amplify their partnerships in the policy world as well in markets,accepting and helping to shape the regulatory guar

203、drails,to ensure their business oversights frameworks meet current,growing,and emerging challenges.The road aheadThe impact of insurance on communities will likely remain a priority in the coming months and years and will require a collective effort.2025 insurance regulatory outlook23ContactsJoe DeS

204、antisUS Insurance leader Partner|Deloitte&Touche LLPGaurav Kumar Principal|Deloitte&Touche LLPTim Cercelle Managing Director|Deloitte&Touche LLPCraig FriedmanManaging Director|Deloitte&Touche LLPJosh MartinManaging Director|Deloitte&Touche LLPContributors John TittleSenior Manager|Deloitte&Touche LL

205、PMenahil RaufConsultant|Deloitte&Touche LLPDeloitte Center for Regulatory Strategy,USIrena Gecas-McCarthyFSI Director,Deloitte Center for Regulatory Strategy,USPrincipal|Deloitte&Touche LLPJim EckenrodeDeloitte Center for Financial Services/Deloitte Center for Regulatory Strategy,USManaging Director

206、|Deloitte Services LPLiz FestaLead Research Specialist|Deloitte Services LP2025 insurance regulatory outlook24Endnotes1.Office for Coastal Management and National Oceanic and Atmospheric Association(NOAA),Climate Change Predictions,accessed November 25,2024.2.Congressional Research Service(CRS),“Ins

207、urance regulation:Issues,background,and legislation in the 113th Congress,”updated January 2,2015.3.New York Department of Financial Services(NYDFS),“Cybersecurity risks arising from artificial intelligence and strategies to combat related risks,”October 16,2024.4.CRS,“Reference table:Expiring provi

208、sions in the“Tax Cuts and Jobs Act”(TCJA,P.L.115-97),”updated November 13,2024;Comfort Oshagbemi and Louise Sheiner,“Which provisions of the Tax Cuts and Jobs Act expire in 2025?,”Brookings,September 5,2024.5.Andrew Ramonas and David Hood,“SEC poised for slow regulatory unraveling under Trump:Explai

209、ned,”Bloomberg Law,November 7,2024.6.Ibid.7.Cornell Law School Legal Information Institute(LII),“15 U.S.Code 6701-Operation of State law|U.S.Code|US Law|LII/Legal Information Institute 15 U.S.Code 6701-Operation of State law,”accessed November 2024.8.NAIC,Big Data and Artificial Intelligence(H)Worki

210、ng Group materials,November 15,2024.9.Julia Mueller,“Trump resistance rises in states led by Democratic governors,”The Hill,November 9,2024.10.NAIC,“NAIC Officers Op-Ed:States lead the way on better insurance markets,”press release,November 7,2024.11.Alvaro Puig,“Operation AI Comply:Detecting AI-inf

211、used frauds and deceptions,”Federal Trade Commission(FTC),September 25,2024.12.NAIC,“NAIC Summer National Meeting minutes,”accessed December 2024.13.NAIC,Third-Party Data and Models(H)Task Force meeting materials,November 18,2024.14.NAIC,Big Data and Artificial Intelligence(H)Working Group materials

212、,July 29,2024.15.NAIC,Big Data and Artificial Intelligence(H)Working Group materials,November 17,2024.16.NAIC,Model Bulletin,April 30,2024;NAIC,Model Bulletin,December 4,2024.17.Colorado Division of Insurance,“Notice of Adoption-New Regulation 10-1-1 Governance and Risk Management Framework Requirem

213、ents for Life Insurers Use of External Consumer Data and Information Sources,Algorithms,and Predictive Models,”September 21,2023.18.DC Department of Insurance,Securities&Banking(DSIB),Report on market conduct examination:Evaluating unintentional bias in private passenger automobile insurance,January

214、 1,2019,through December 31,2021.19.Washington State Office of the Attorney General,“Legislature adopts AG Fergusons proposal to launch Artificial Intelligence Task Force,”press release,March 5,2024.20.Matt OBrien and Barbara Ortutay,“US gathers allies to talk AI safety as Trumps vow to undo Bidens

215、AI policy overshadows their work,”AP News,November 20,2024.21.Senator Edward J.Markey(D-Mass.),“Senator Markey introduces AI Civil Rights Act to eliminate AI bias,enact guardrails on use of algorithms in decisions impacting peoples rights,civil liberties,livelihoods,”press release,September 24,2024.

216、22.The White House,“Fact Sheet:President Donald J.Trump Takes Action to Enhance Americas AI Leadership,”January 23,2025.23.NAIC,Third-Party Data and Models(H)Task Force meeting materials,November 18,2024.24.Christoph Hamer,“EU risk-focused framework of insurance supervision around data and models,”E

217、uropean Insurance and Occupational Pensions Authority(EIOPA),September 11,2024.25.NYDFS,“Insurance Circular Letter No.7:Use of artificial intelligence systems and external consumer data and information sources in insurance underwriting and pricing,”July 11,2024.2025 insurance regulatory outlook2526.

218、Colorado Division of Insurance,“Regulation 10-1-1 Governance and Risk Management Framework Requirements for Life Insurers Use of External Consumer Data and Information Sources,Algorithms,and Predictive Models,”October 2023.27.US Department of the Treasury,“Remarks by Acting Assistant Secretary for F

219、inancial Institutions Laurie Schaffer at The Geneva Associations Programme on Regulation and Supervision(PROGRES)Seminar 2024,”September 17,2024.28.US Department of the Treasury,“Update on the Federal Insurance Offices assessment of a potential federal insurance response to catastrophic cyber incide

220、nts,”February 1,2024.29.NYDFS,“Cybersecurity Resource Center,”accessed December 2024.NYDFS,“Industry Letter:Cybersecurity risks arising from artificial intelligence and strategies to combat related risks,”October 16,2024.30.Colorado Division of Insurance,“1st Round Comments on ACLI DRAFT Proposed Qu

221、antitative Testing Regulation,”July 2024.31.NAIC,“Innovation,Cybersecurity,and Technology(H)Committee meeting materials,”November 19,2024.32.Treasury Department,“Update on the Federal Insurance Offices assessment of a potential federal insurance response to catastrophic cyber incidents.”33.Treasury

222、Department,FACI Public Meeting.34.US Congress,H.R.3210-107th Congress(20012002):Terrorism Risk Insurance Act of 2002,November 26,2002.35.NYDFS,“Industry Letter:Cybersecurity risks arising from artificial intelligence and strategies to combat related risks,”October 16,2024.36.NAIC,“Model Laws,”access

223、ed October 7,2024.37.NYDFS,“Cybersecurity Resource Center FAQs,”accessed September 2024.38.National Institute of Standards and Technology(NIST),“Cybersecurity Framework,”accessed September 2024.39.NYDFS,“Cybersecurity Resource Center,”accessed December 2024.40.NYDFS,“Industry Letter:Cybersecurity ri

224、sks arising from artificial intelligence and strategies to combat related risks.”41.Ibid.42.NYDFS,“Cybersecurity Resource Center.”43.NAIC,“Framework for Investments Exposed by E Committee,”accessed November 2024.44.NAIC Chair of the Financial Condition(E)Committee Nathan Houdek,“Request for Comments

225、 on the Draft Request for Proposal,”August 2,2024.45.NAIC,“Risk Assessment of Structured Securities CLOs,”May 25,2022.46.NAIC,“P&P Manual Amendment to Change the Effective Date for the Financial Modeling of CLOs by SSG to 2025,”April 16,2024.47.NAIC,“NAIC announces 2024 strategic priorities,”press r

226、elease,February 13,2024;NAIC,“Valuation of Securities(E)Task Force meeting summary report,”August 13,2024.48.NAIC,“Response to written comments on holistic framework on insurers investments,”February 14,2024.49.NAIC,“Response to written comments on holistic framework on insurers investments&workplan

227、,”August 2,2024.50.Federal Insurance Office(FIO)and US Department of the Treasury,Annual report on the insurance industry,September 2024.51.Jennifer Johnson and Jean-Baptiste Carelus,“Number of private equity-owned U.S.insurers remains constant,but total investments increase by double digits in 2023

228、,”NAIC Capital Markets Bureau,August 2024.2025 insurance regulatory outlook2652.FSOC,2024 annual report,2024.53.NAIC,“Life Actuarial(A)Task Force 2024 Summer National Meeting summary,”August 11,2024.54.Tom Finnell,“IAIS Proposed Insurance Capital Standard:An update to the Federal Advisory Committee

229、on Insurance,”FIO and US Department of the Treasury,January 5,2017.55.International Association of Insurance Supervisors(IAIS),“Insurance Capital Standard,”accessed October 2024.56.Ibid.57.IAIS,Report on the Aggregation Method Comparability Assessment,November 14,2024.58.FIO and US Department of the

230、 Treasury,“International Association of Insurance Supervisors:Next steps on the Insurance Capital Standard and the Aggregation Method Comparability,”June 4,2024;FACI Subcommittee on FIOs international work,“Recommendations re:FIOs international work,”September,23,2019;IAIS,“Insurance Capital Standar

231、d,”accessed August 2024.59.NAIC,“NAICs Interpretive Guidance on ICS Comparability Assessment Framework,”accessed November 2024.60.FACI Subcommittee on FIOs international work,“Recommendations re:FIOs international work.”61.Ibid.62.IAIS,Report on the Aggregation Method Comparability Assessment.63.FIO

232、 and Treasury Department,Annual report on the insurance industry.64.Sherrod Brown(D-Ohio),Letter to FIO and Treasury Department regarding insurance,March 16,2022.65.Barry Chen et al.,2024 insurance M&A outlook,Deloitte,2024.66.Derek Saul,“What to know about Scott Bessent:Trumps pro-tariff Treasury p

233、ick,”Forbes,November 22,2024.67.Annual report on the insurance industry.68.Houdek,“Request for Comments on the Draft Request for Proposal.”69.Fred Andersen,“Reinsurance Asset Adequacy Testing(AAT):Life Actuarial Task Force,”NAIC,June 20,2024.70.Brian Bayerle and Colin Masterson,“June 20th Exposure o

234、f Reinsurance AAT Concepts,”American Council of Life Insurers(ACLI),July 20,2024.71.Report on the Aggregation Method Comparability Assessment.72.“Insurance Capital Standard”;Andrew N.Mais,David Vacca,and David Sherwood,“Insurance Capital Standards cause stakeholders concern at IAIS meeting,”Deloitte

235、,2015.73.North Dakota Insurance Commissioner Jon Godfread,“Insurance Commissioner Jon Godfread launches 2024 re-election bid with a vision for future-proofing North Dakotas insurance sector,”press release,January 3,2024.74.Karl Hersch,James Colao,and Michelle Canaan,2025 global insurance outlook:Evo

236、lving industry operating models to build the future of insurance,Deloitte,September 29,2024.75.VedderPrice,“Two federal district courts stay DOL fiduciary rule,”September 3,2024.76.John Sullivan,“DOL files last minute appeal of the fiduciary rules stay,”National Association of Plan Advisors(NAPA),Se

237、ptember 20,2024.77.Lynn Cavanaugh,“DOL attempts to un-freeze its new fiduciary rule,filing 2 appeals in federal courts,”BenefitsPro,September 26,2024.2025 insurance regulatory outlook2778.Financial Industry Regulatory Authority(FINRA),SEC Regulation Best Interest(Reg BI),accessed November 2024;SEC,R

238、egulation Best Interest(Reg BI)under the Securities Exchange Act of 1934,Federal Register,July 12,201979.SEC,Administrative Proceeding File No.3-22226 in the matter of Thrivent Investment Management,Inc.,October 2,2024;SEC,“SEC charges broker-dealer First Horizon with Regulation Best Interest violat

239、ions,”press release,September 18,2024.80.NAIC,“The NAIC annuity suitability best interest model regulation,”January 2024.81.NAIC,“Implementation of 2020 revisions to Model#275 Suitability in Annuity Transactions Model Regulation,”September 2,2024;NAIC,“Suitability in Annuity Transactions Model Regul

240、ation(#275)Best Interest Standard of Conduct Revisions Frequently Asked Questions,”July 2021.82.NAIC,“Chair Draft re:Annuity Best Interest Regulatory Guidance and Considerations,”September 23,2024.83.NYDFS,“Enforcement and Discipline:Insurance Actions,”accessed November 2024.84.Kelly Cusick,Michelle

241、 Canaan,and Namrata Sharma,“Bridging insurance gaps to prepare homeowners for emerging climate change risks,”Deloitte Insights,May 2,2024.85.Jason Woleben,“US homeowners insurance rates jump by double digits in 2023,”S&P Global Market Intelligence,January 25,2024.86.Omar Mohammed,“Map shows 9 states

242、 where homeowners are losing their insurance,”Newsweek,updated March 4,2024.87.NAIC,“Compilation of written comments on the plan forward for the Privacy Protections(H)Working Group,May 31,2024,”June 12,2024.88.NAIC,Privacy Protections(H)Working Group 2023 Summer National Meeting summary,August 13,20

243、23;NAIC,“Privacy Protections Working Group comments from Committee of Annuity Insurers(CAI),”July 28,2024.89.Jordan Kuperschmid et al.,“NAICs Consumer Privacy Protection Model Law#674,”Deloitte,September 2023.90.NAIC,“Chair Draft-Privacy of Consumer Information Act MO-672-42,”2017.91.Ibid.92.NAIC,“N

244、AIC announces 2024 strategic priorities,”press release,February 13,2024.93.NAIC,“NAIC Announces 2025 Initiatives,”February 14,2025.94.NAIC,“Privacy of Consumer Financial and Health Information Regulation(#672)New Section 5 Third Party Arrangements Public Comments,”September 19,2024.95.Allison Bell,“

245、Life and annuity illustrations confuse clients,advisor tells regulators,”ThinkAdvisor,August 13,2024.96.NAIC,“Privacy Protections(H)Working Group New Consumer Privacy Protections Model Law#674 comments from National Association of Mutual Insurance Companies(NAMIC),”July 28,2023.97.FTC,“Privacy of Co

246、nsumer Financial Information Rule Under the Gramm-Leach-Bliley Act,”Federal Register,December 9,2021.98.Ella Nilsen,“Extreme floods are happening way more often than federal data would suggest,analysis shows,”CNN,updated June 27,2023.99.NOAA National Centers for Environmental Information(NCEI)and Gl

247、obal Climatology Project,“Global climate summary for July 2024,”Climate.gov,August 13,2024.100.California FAIR Plan Property Insurance,“Key Statistics&Data,”accessed November 2024.101.California Department of Insurance,“Commissioner Lara and Cal Poly Humboldt announce joint effort to create nations

248、first public wildfire catastrophe model,”press release,September 17,2024.2025 insurance regulatory outlook28102.NAIC,Letter to Congress,September 16,2024.103.California State Legislature,Residential property insurance:wildfire risk(Bill),introduced February 13,2024.104.NAIC,Letter to Congress.105.Ez

249、ra Amacher,“Report:Over 250,000 US properties have repeated NFIP claims,”Insurance Journal,September 19,2024.106.NAIC,“Joint meeting of the Catastrophe Insurance(C)Working Group and the NAIC/FEMA Advisory(C)Group,”August 12,2024.107.NAIC,Letter to Congress.108.NAIC,“NAIC Officers Op-Ed:States lead t

250、he way on better insurance markets,”press release,November 7,2024.109.Ibid;National Council of Insurance Legislators(NCOIL),Strengthen Homes Program Model Act,accessed November 25,2024.110.NAIC,Climate and Resiliency(EX)Task Force 2024 Summer National Meeting materials,August 15,2024.111.Raymon Zhon

251、g and Mira Rojanasakal,“See the ocean heat fueling Hurricane Milton,in one chart,”New York Times,October 7,2024.112.Treasury Department,“Remarks by Acting Assistant Secretary for Financial Institutions Laurie Schaffer at The Geneva Associations Programme on Regulation and Supervision(PROGRES)Seminar

252、 2024.”113.Ibid.114.Letter to Congress.115.US Department of the Treasury,FACI Public Meeting,September 26,2024.116.NAIC,Property&Casualty Insurance Market Intelligence Data Call,accessed November 2024.117.US Department of the Treasury,“Treasurys Federal Insurance Office advances first insurer data c

253、all to assess climate-related financial risk to consumers,”press release,November 1,2023.118.US Treasury Department,FACI Public Meeting,September 26,2024.119.California Department of Insurance,“Mandatory one year moratorium on non-renewals,”accessed October 2024;California Department of Insurance,“C

254、ommissioner Lara orders insurance protections for 750,000 in Southern California following major wildfire emergencies,”press release,September 19,2024.120.California Department of Insurance,“In a California“first,”Commissioner Lara announces enforcement of regulation to expand insurance coverage acr

255、oss state,”December 13,2024.121.NYDFS,“Acting Superintendent Adrienne A.Harris announces DFS issues final guidance to New York domestic insurers on managing financial risks from climate change,”press release,November 15,2021.122.US Department of the Treasury,“Treasurys Federal Insurance Office advan

256、ces first insurer data call to assess climate-related financial risk to consumers,”press release,November 1,2023.123.SEC,“The Enhancement and Standardization of Climate-Related Disclosures for Investors,”last updated March 6,2024;Andrew Ramonas and David Hood,“SEC poised for slow regulatory unraveli

257、ng under Trump:Explained,”Bloomberg Law,November 7,2024.124.Letter to Congress.125.Emily Flitter and Christopher Flavelle,“States dig into homeowners insurance and why its hard to buy,”New York Times,March 8,2024.126.NOAA NCEI,“Global climate report,”July 2024.2025 insurance regulatory outlook29127.

258、AM Best,“Bests Market Segment Report:Weather,reinsurance and inflation once again drive U.S.P/C results,”press release,March 6,2024.128.FIO and US Treasury Department,Annual report on the insurance industry.129.NAIC,Executive(EX)Committee and Plenary meeting materials,2024 Summer National Meeting,Au

259、gust 15,2024.130.Ibid.131.NYDFS,Industry letter to New York state domestic insurers,May 9,2024;NYDFS,Update on New York domestic insurers management of the financial risks from climate change,May 2024.132.Ibid.133.Ibid.134.IAIS,“Public consultation on climate risk supervisory guidance,”July 15,2024.

260、135.IAIS,“Draft Application Paper on public disclosure and supervisory reporting of climate risk,”July 2024.136.IAIS,“Draft supporting material on macroprudential and group supervisory issues and climate risk,”July 2024.About the Center The Deloitte Center for Regulatory Strategy provides valuable i

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