Blogs

The NAIC H Committee was created to support innovation, cybersecurity, and privacy protection in insurance. Here’s a look into the H Committee groups.

The Complete Guide to the NAIC H Committee Structure

The National Association of Insurance Commissioners created its first new lettered committee in nearly two decades. The NAIC's Innovation, Cybersecurity and Technology (H) Committee represents the agency's continued effort to support innovation, cybersecurity, and privacy protection in technology. The H Committee can help both regulators and organizations create a strong cybersecurity response plan and understand regulatory expectations related to the responsible and ethical use of artificial intelligence and big data.

Understanding the NAIC H Committee Structure

Because the NAIC had an existing Innovation and Technology (EX) task force, these teams now form the core of the H Committee. This includes the Big Data and Artificial Intelligence (H) working group and E-Commerce (H) Working Group. It also reestablishes the formal Cybersecurity Working Group and forms a new Innovative in Technology and Regulation (H) Working Group.

Meanwhile, the Speed to Market group moves to the Market Regulation and Consumer Affairs (D) Committee, while the Privacy Protections Working Group migrates from D to H. This better aligns the responsibilities of both groups to ensure a more consistent experience among the working teams. Here's a deeper dive into each group of the H Committee:

Big Data and AI (H) Working Group
The Big Data and AI (H) Working Group encompasses several workstreams, including one focused on surveys intended to provide objective data regarding the current use of big data and AI within the industry. In 2021, it was focused on the private passenger auto industry, but a survey for the life and homeowner's insurance lines of business is currently under development. It will provide similar insights on the status of the industry's use of big data and AI in these product lines.

There is also a workstream focused on better understanding the role of third parties in providing data and models involving AI to the industry and developing an appropriate regulatory framework for monitoring and overseeing third parties. Another workstream will be looking deeper into tools and resources for monitoring the space, including detection and mitigation of unintended, unfair bias in data models. The fourth workstream under this working group will develop a regulatory framework recommendation for the H Committee to consider related to the industry's use of big data and AI. The framework will be based on the AI Principles adopted by the NAIC in late 2020.

Cybersecurity (H) Working Group
The Cybersecurity (H) Working Group is in the planning stages of a cybersecurity response plan to help state regulators address cybersecurity events in the insurance industry. It's also hoping to develop a cybersecurity survey to better understand the state of the industry.

The working group will serve in an advisement role in the implementation, oversight, and enforcement of state regulations that encompass cybersecurity monitoring. In addition, it monitors cybersecurity efforts on a state, federal, and global level to ensure the industry remains on the cutting edge of innovation.

E-Commerce (H) Working Group
The E-Commerce (H) Working Group is laser-focused on removing regulatory barriers related to digitalization that need to be modernized. These barriers impede the efficient use of technology in insurance while offering little in terms of protecting consumers. Subgroups within this working group are analyzing last year's survey results to find problem areas and build a toolbox for state regulators to address them.

Insurance involves more complex issues than the current regulatory structure accommodates, as it's filled with old rules that should be abandoned. Categorizing these problems and providing guidance on resolving their root causes will be crucial in eliminating, or at least mitigating, these hurdles.

Privacy Protection (H) Working Group
The Privacy Protections (H) Working Group is hard at work on an aggressive plan to modernize the NAIC's two existing model walls on privacy. These two models were created decades ago, and an update is necessary. So, the NAIC has a fast-paced plan to ensure its success. This process is transparent and monitored closely to include community feedback.

Innovation in Technology and Regulation (H) Working Group
The Innovation in Technology and Regulation (H) Working Group was newly approved at the NAIC Spring National Meeting in April 2022. It will focus on understanding which cutting-edge innovations will drive the future of the sector. The group will determine what leaders are thinking about in the industry and find innovative new ways technology can be leveraged in the insurance sector to ensure continual growth throughout every business unit.

Redefining H Committee Collaboration

One of the primary charges of the H Committee is to coordinate NAIC efforts regarding innovation, cybersecurity and privacy, and technology across other workstreams and committees to ensure consistency and collaboration. Multiple committees touch on these topics in various workstreams and work products, and it was necessary to gather everyone across all of the committees within the NAIC to identify related work and understand where work products and change might overlap.

Using that information, the H Committee determined how to specifically collaborate with each committee. For example, the C and H Committees both work on different aspects of cybersecurity, but they need to stay informed of each other's work. With common membership, each working group can know what the others are doing and identify any potential overlap. This allows the groups to share information, leverage each other's skill sets, and even work on joint deliverables.

This communication-focused framework will form the foundation to establish real relationships and keep everyone in lockstep with what's happening in real time.

It will also inform the Innovation, Cybersphere and Technology (ICT) Hub. This will act as a library and directory for each group's individual websites, NAIC reports, and other informational resources. This acts as a portal for stakeholders to be able to dive deeper into exactly what each group is working on related to a specific topic.

The methodology developed to ensure a common topic of importance is well coordinated and referred to as a Collaboration Forum. The first forum to be hosted by the H Committee will be the Collaboration Forum on Algorithm Bias.

Collaboration Forum

Some topics can be addressed by a single working group, but some are so big that they affect everybody in one way or another. Algorithmic bias is a good example because it stretches broadly across the insurance industry. This makes it of interest to every carrier and many committees from a regulatory standpoint.

There are foundational elements that can be addressed within a common framework to ensure everybody starts on the same page. Topics that require these sweeping considerations can be brought into the collaboration forum with the goal of working together to provide regulators a consistent and common foundational understanding that they can then leverage in developing their work products in their different workstreams.

This allows subject matter experts from a variety of disciplines to determine the core issues to address from their individual perspectives. Each Collaboration Forum will have its own group, chair, scope, and structure, along with expected deliverables, and it will be carried out in regulatory-only and public sessions, as this first one on algorithmic bias.

Algorithmic Bias Project

One of the areas the Collaboration Forum on Algorithmic Bias will provide foundational education on is the possibility of big data and AI creating decisions that could inadvertently result in some type of discrimination that could disproportionately harm certain consumers, such as those in protected classes. Regulators are seeking ways to prevent this through good governance and data hygiene, as well as methods to detect and mitigate it, should it occur.

This project brought together leadership from each related group to participate in the Collaboration Forum to tackle the issue of specifically addressing how bias within digital decisional systems and complex predictive models driven by AI and ML can result in unfair discrimination.

How to Get Involved

If anything in this article strikes a chord and you want to get involved, the primary thing to do is go to the NAIC website and check out any of the interesting working groups. If you sign up as an interested party, you'll receive an email informing you of the next public meeting, as well as access to any materials for that committee.

Attending these meetings is the best way to stay informed, and the minutes of previous meetings are available online. Read minutes from past meetings and agendas for upcoming events to get a feel for where important topics stand.

If you'd like to remain in the know about other NAIC news, PIMA is here to help. Contact us today to learn more about the benefits of a PIMA membership, including networking, peer-to-peer learning, and education opportunities.



Published on October 3, 2022.

PIMA® (Professional Insurance Marketing Association®) is a member-driven trade association focused exclusively on the group-sponsored benefits market.



#Blog
#2022

​​