Time for insurance regulators to release the data?

Consumer advocates want insurance regulators to do more than collect reams of industry information about property and casualty coverage across the country. They want it made public so it can be analyzed for critical trends.

The National Association of Insurance Commissioners announced Friday that it is launching a data call that will collect information — including premiums, policies, claims, losses, limits, deductibles, nonrenewals and types of coverage — at the ZIP code level from more than 400 property and casualty insurers. The organization said the data “will provide deeper insight into property insurance market costs, coverage and gaps in protection against the backdrop of the increasing frequency and severity of natural disasters, rising reinsurance costs and continued inflationary pressures.”

The NAIC will share the data with the Federal Insurance Administration, which will use it to conduct a national assessment of the effect of climate-related financial risks on consumers, according to the Treasury Department.

“This is an important first step in creating a data infrastructure to address how climate risk affects the affordability and availability of home insurance,” said Birney Birnbaum (pictured above left), executive director of the Center for Economic Justice. “The NAIC is lacking in action on this issue.”

Birnbaum said he will watch the NAIC to see if it publishes the data so it can be widely used to develop timely estimates of property insurance coverage at a time when weather disasters often hit the market.

“This data needs to be published for researchers to 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 for more than 80 percent of the U.S. property insurance market by premium volume. Contacted insurers will have 90 days to provide their information.

NAIC criticized for data sclerosis

In a joint statement Friday, CEJ and the Consumer Federation of America criticized the NAIC for failing for decades to “collect detailed data on consumer market outcomes necessary to monitor the availability and affordability of auto and home insurance.”

In January, the NAIC updated its Homeowners Insurance Report with 2021 premium information, Doug Heller, director of underwriting 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 about what’s going on in your market,” Birnbaum said.

An NAIC spokesman declined to comment.

The CEJ and the NAIC acknowledged the FIO for prompting the NAIC to take action on the data collection. The NAIC’s call comes after the FIO proposed in October 2022 to collect climate-related information from insurers. The FIO said it would cooperate with the NAIC rather than make its own data requests.

NAIC is taking the lead on data

The Property & Casualty Insurance Association of America praised the coordination between the NAIC and the FIO.

“Duplicated data calls are unnecessary and ultimately increase costs for consumers,” Nat Winecke, APCIA’s senior vice president of federal government relations, and Adam Shores, APCIA’s senior vice president of state government relations, said in a joint statement. “Insurers already provide important data to government regulators. APCIA and our members are encouraged by this partnership.”

State insurance commissioners are responsible for regulating insurance under federal law.

“If there’s going to be a call for data, the obvious party that’s going to be watching it is state regulators,” said Wes Bissett (pictured above, center), senior counsel for government affairs at Independent Insurance Agents and Brokers of America.

Illuminating the vulnerable population groups

The FIO was created by the Dodd Frank Financial Reform Act of 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 efforts of the NAIC and the FIO will benefit the insurance market, said Mark Friedlander (pictured above 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 ensure they are adequately insured against events that cannot be prevented,” Friedlander said in a statement. “NAIC’s new initiative will provide relevant data and insights to the Treasury Department’s Federal Insurance Office and help them translate them into actionable policy proposals to protect vulnerable populations.”