State insurance regulators are willing to work with the federal government but continue to maintain that they are best positioned to oversee the industry. The National Association of Insurance Commissioners (NAIC) is prioritizing mitigation to deal with the impacts of a changing climate. Insurers must be ethical and transparent in how they utilize artificial intelligence so as to not perpetuate bias.
Connecticut Insurance Commissioner Andrew Mais, in his capacity as both president of the NAIC and a state regulator, discussed various pressing issues including the role of the federal government in regulating the insurance space, the impact of climate change, and the use of artificial intelligence. Mais highlighted the importance of addressing climate change, emphasizing the need for mitigation strategies to reduce risks faced by property owners.
Regarding the federal government's increasing involvement in the insurance industry's state-based regulatory system, Mais expressed concern, stating, "We are the ones who are closest to consumers. We are the ones who best understand our markets. We are the ones who best understand insurance." He underscored the significance of state insurance regulation and the role of state regulators in consumer protection.
On the topic of cyber insurance and regulating artificial intelligence, Mais noted the evolving nature of the insurance industry in providing cyber coverage and shifting towards a focus on mitigation rather than just risk transferal. He emphasized the importance of ethical and transparent use of artificial intelligence in the insurance sector to ensure fair practices and consumer protection. Mais stated, "When insurers use AI it has to be ethical, it has to be transparent, and it has to be understandable."
As state insurance regulators navigate challenges posed by climate change, federal intervention, and the integration of artificial intelligence in the industry, the NAIC remains dedicated to promoting consumer protection, innovation, and transparency in insurance practices.