NAIC group to fire up dormant work on accelerated underwriting guidance

Image shows the words "accelerated underwriting." — NAIC regulators are restarting efforts to regulate accelerated underwriting.

By John Hilton

A panel of state insurance regulators is getting back to work on accelerated underwriting guidance for states to consider.

Created during the National Association of Insurance Commissioners' 2019 summer meeting, the Accelerated Underwriting Working Group began work with several charges.

Among them, to "consider the use of external data and data analytics in accelerated life underwriting, including consideration of the ongoing work of the Life Actuarial (A) Task Force on the issue and, if appropriate, drafting guidance for the states.”

Work on that effort paused in 2022-23 pending completion of two projects under the Innovation, Cybersecurity and Innovation Committee:

1. A survey on the use of artificial intelligence-machine learning in life insurance under the Big Data and AI Working Group. Fifty-eight percent of life insurers are either using or have an interest in using artificial intelligence in their businesses, the survey found.

2. The NAIC Model Bulletin: Use of Artificial Intelligence Systems by Insurers. The bulletin is intended to "guide insurers to employ AI consistent with existing market conduct, corporate governance, and unfair and deceptive trade practice laws," the law firm Locke Lord explained.

Both of those projects were completed and shared by regulators at the NAIC fall meeting in December.

Accelerated usage

Accelerated underwriting is now a full decade old with the earliest programs having been brought to market in 2012. Still, the idea remained more fantasy than reality for many years. Then the COVID-19 pandemic hit.

AUW face amounts rapidly increased during the onset of COVID-19 in order to meet the demand for socially distant underwriting options. Those options remained in place and even continued to grow, post-pandemic, Munich Re found in a 2022 survey of life insurers.

"In the future, we expect to see human intervention decline and digital health data sources continue to gain traction as life insurance carriers work towards optimizing their accelerated underwriting programs to issue more policies with faster turnaround times," Munich Re concluded.

In anticipation of the Accelerated Underwriting Working Group meeting again, the NAIC is re-exposing a pair of documents:

1. The draft Regulatory Guidance and Considerations document; and

2. The draft Referral to the Market Conduct Examination Guidelines Working Group

Regulators are not accepting more public comment on these documents, but ask stakeholders to consider the issues and impact of both in anticipation of a virtual meeting shortly after the NAIC spring meeting, being held March 15-18 in Phoenix.

As the AUW working group develops guidance on accelerated underwriting in life insurance, it will continue to coordinate these efforts with the Innovation, Cybersecurity and Innovation Committee, members were told last week.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.