The National Association of Insurance Commissioners (NAIC) established a Cannabis Insurance Working Group during its weekend Summer Meeting in Boston.
The group's charge is to address the issue of insurance availability for the legalized cannabis industry. California Insurance Commissioner Dave Jones, who has extensive experience on the issue, will chair the working group.
Jones suggested the new group to enable state insurance regulators to "better understand where there are insurance coverage gaps for the legalized cannabis industry," the California Department of Insurance said in a news release. The group will also share and develop best practices for state insurance regulators to follow to address coverage gaps and cannabis insurance regulatory issues.
The commissioner previously chaired the NAIC Sharing Economy Working Group, which developed a template for insurance coverage for ride sharing and home sharing. Similarly, the new working group will "enable regulators to better understand the legalized cannabis industry and its insurance needs and the role insurance regulators can play," the release said.
"Cannabis businesses face insurance availability and insurance coverage gaps – which means that those who shop, those who work in, those who sell goods or services to, or those who own, invest in or operate cannabis businesses may not have access to insurance," Jones said. "As state insurance regulators, one of our responsibilities is to understand new legal businesses and their insurance needs, and then work to encourage the availability of insurance to meet these new risks and coverage needs."
The new working group will consider the insurance regulatory issues surrounding the legalized cannabis business from seed to sale, including availability and scope of coverage, workers' compensation issues, and consumer information and protection. The working group will also develop a white paper outlining the issues and make recommendations for the development of regulatory guidance as appropriate.
Jones launched in California an initiative last year to encourage admitted commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. As a result of Jones' initiative, in California the first filing and approval of an admitted commercial insurer offering insurance for the cannabis industry was announced in November 2017.
In October 2017, Jones held a first-in-the-nation public hearing to identify insurance gaps faced by the cannabis industry. Cannabis businesses and insurance industry representatives testified about the limited availability of insurance for cannabis businesses.