For those whose travel plans weren’t interrupted by the inclement weather, the spring meeting of the tri-annually convened National Conference of Insurance Legislators – held in Charleston, S.C. just as February turned into March – offered intense discussion and debate on topics ranging from cyber-security, severe weather preparedness and transportation network companies.

Since those are each ongoing interests for us at the R Street Institute, I’ll offer a brief rundown of the proceedings.

Cyber-security: In light of the large and well-publicized Anthem data breach – which saw the personal information of millions of subscribers compromised – subject matter experts, industry representatives, legislators and regulators all expressed concern about the how the insurance market would be impacted by a significant cyber-attack. One regulator went so far as to voice concern about the ability of insurers to remain solvent in the event of a major attack.

Informed by that high level of anxiety, a whole panel of regulators, when asked, suggested that new tools are likely needed to prepare for a cyber-attack, so that regulators will have the ability to monitor insurers’ preparedness closely. What exactly will constitute those tools remains to be seen, but pressure for action of some kind is growing.

Severe weather preparedness: A lunch keynote given by South Carolina Insurance Director Ray Farmer outlined his lowland coastal state’s approach to preparing for severe weather. Two prongs of his effort – an unceasing commitment to educating the public about the risks of hurricanes and floods and a refusal to craft a publicly backed residual flood market – were particularly encouraging.

Later, during a panel devoted to dialogue between the National Association of Insurance Commissioners and NCOIL, both Farmer and Georgia Insurance Commissioner Ralph Hudgens confirmed R Street’s long-held suspicion that, when National Flood Insurance Program rates come closer to matching actuarial expectations, private insurers will begin to take on risk. Both states have seen an increase in the number of private flood insurance policies since the passage, albeit neutered, of the Biggert-Waters Flood Insurance Reform Act in 2012.

Legislators were curious about how exactly states are cultivating participation by private insurers. Commissioner Hudgens shared that his approach had included nothing formal. Instead, his department has relied upon administrative encouragement in the form of outreach.

TNCs: The TNC insurance coverage issue continued to garner significant interest from legislators at NCOIL. A panel was held to discuss a piece of model legislation put forward by Ohio state Rep. Michael Stinziano, D-Columbus. However, Stinziano was unable to make it to Charleston and, as a result, the panel’s conversation remained broad.

If the focus of discussion can be taken as an indication of concern, the so-called “Period One” – during which the TNC app is activated but the driver has not made a connection with a fare – remains an issue for many of the legislators at NCOIL. Still, participants in the panel, both legislators and insurance industry representatives, happily pronounced that insurers and TNCs are far closer to agreement than they appear publicly. Whether or not that is accurate, what is clear is that, the more insurers learn more about the risk profile of TNC drivers during Period One, the more amenable they are becoming to the idea of offering personal coverage. According to Uber’s Gus Fuldner, six carriers in eight states have now introduced products for the TNC market.

The other significant discussion point was brought up by North Dakota state Rep. George Keiser, R-Bismarck. He expressed concerned about the appropriate remedy for fraud, now that insurers are beginning to ask explicitly about the use of personal vehicles for TNC activity. Panelists provided unrehearsed responses that ranged from the need for coverage cancellation to prosecution. More will likely be heard on the issue at the next NCOIL meeting in Indianapolis.

One final notable development occurred in Charleston, though it had nothing to do with a specific policy. For the first time since the tenure of state Sen. Herschel Rosenthal in the 1990s, a legislator from California attended NCOIL. Assemblyman Ken Cooley, who is a current member of the California Assembly Insurance Committee and a longtime scholar of insurance issues, participated in a non-voting capacity in panels throughout the conference. His presence may well be a welcome harbinger of formal participation by the Golden State in NCOIL. Both NCOIL and California would benefit from exposure to and exchange with one another.

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