NAIC stresses importance of data collection amid federal layoff concerns

By Mia MacGregor

March 20 - (The Insurer) - The National Association of Insurance Commissioners has stressed the vital role of data collection for insurers, local governments and consumers as U.S. federal agency layoffs continue to fuel concerns over the impact on data provided by these organizations.

In a statement to The Insurer, the NAIC explained that while it cannot speculate on the full impacts of federal workforce reductions, it recognizes that “data collection is essential for accurate risk assessment, effective underwriting, and proactive mitigation strategies for insurance companies, local governments, and consumers alike.”

Several federal agencies have been hit by job cuts in recent months, including the National Oceanic and Atmospheric Administration, the Cybersecurity and Infrastructure Security Agency and the U.S. Geological Survey.

“Through collaboration via the NAIC, state insurance regulators are squarely focused on protecting U.S. consumers and ensuring the stability of insurance markets, which include property & casualty markets, across the country,” the organization stated.

The NAIC is governed by chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories. Founded in 1871, the organization provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers.

In February, the NAIC released its priorities for 2025, which include aligning communication strategies and services, amplifying the state-based insurance regulatory system domestically and abroad, strengthening financial governance, addressing regulatory arbitrage risks, modernizing the risk-based capital framework, and focusing on various committee priorities.

Additionally, the NAIC’s National Climate Resilience Strategy for Insurance aims to drive more effective risk reduction in 2025 and beyond, according to the organization.

This strategy provides regulators with tools and an action plan that advocates for home hardening against wildfires, floods, and storms; utilizes catastrophe modeling information; improves public risk awareness; and ensures that new solvency tools incorporate further climate risk analysis.

As part of these efforts, the NAIC stated that “state insurance regulators will continue to emphasize pre-disaster mitigation to reduce climate impacts and assist consumers in pursuing possible premium reductions.”

Earlier this year, the Reinsurance Association of America raised concerns about the insurance sector’s reliance on NOAA following widespread layoffs at the agency.

In a statement to The Insurer, RAA president Frank Nutter said, “I know of no other federal entity that facilitates greater economic and commercial activity than NOAA and its weather data.”

“The insurance industry has a long-standing reliance on NOAA for data to improve insurability and to help policyholders and communities improve mitigation to reduce property damage,” he added.