The American Insurance Association is not fully on board with a proposed model law that would govern how insurance firms address cybersecurity.
The trade group announced this week that it would “address fundamental concerns with uniformity, duplicative regulations, and challenging substantive requirements” in the draft of the Insurance Data Security Model Law during the National Association of Insurance Commissioners’ (NAIC) 2016 Spring Meeting next week, April 4.
The AIA also aims to underline “the need for a consistent and clear regulatory approach to Big Data” and to promote an aggregation approach when verifying the capital of an insurance group during its address.
On April 4, NAIC’s Cybersecurity Task Force will discuss the draft of the cybersecurity law.
AIA had submitted its comments and recommendations to the Task Force regarding the drafted law beforehand. The trade association expressed its desire for the Task Force to hold a thorough section-by-section discussion of the preliminary draft so that the specific concerns can be better addressed.
“While AIA appreciates the opportunity to work with the Task Force on this model law, we remain concerned that a series of provisions present significant challenges for insurers,” remarked AIA Associate Counsel Angela Gleason. “One in particular is the potential for inconsistent and duplicative regulations within a state. This model law must provide insurers with a clear roadmap for compliance without imposing burdensome requirements that do not help consumers.”
NAIC’s Big Data Working Group will hold a public meeting on insurer use of Big Data for claims, marketing, underwriting and pricing on April 3. On that same day, AIA will present its approach for a group capital calculation together with the American Council of Life Insurers (ACLI).
“The fear is that the ultimate recommendations of this Working Group will reflect a misguided definition of Big Data – unlike any of the other existing ones. We hope the hearing will make clear the need for a regulatory definition of Big Data to be agreed upon before the Group starts debating the merits of its use. They need to define the parameters of what is being debated,” said AIA Senior Counsel and Director of Compliance Resources, Lisa Brown.
“AIA appreciates the opportunity to present with ACLI and we look forward to hearing the NAIC’s goals for the Working Group,” added AIA Associate General Counsel and Director of Financial Regulatory Policy Phillip Carson.
