Link: https://content.naic.org/sites/default/files/national_meeting/Materials-Big-Data-AI-WG032625_0.pdf
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Accessed 25 April 2025, for 25 March 2025 Meeting
Publication Site: NAIC
All about risk
Link: https://content.naic.org/sites/default/files/national_meeting/Materials-Big-Data-AI-WG032625_0.pdf
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Accessed 25 April 2025, for 25 March 2025 Meeting
Publication Site: NAIC
Link: https://content.naic.org/sites/default/files/call_materials/Materials-BDAIWG.pdf
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Author(s): Tom Prince, FCAS, MAAA
Publication Date: 12 Nov 2024
Publication Site: NAIC
Link: https://www.regulations.gov/document/TREAS-DO-2024-0011-0001/comment
Description:
Publicly available comments on Dept of Treasury’s request for information on AI use, opportunities & risk in financial services sector.
Example: https://www.regulations.gov/comment/TREAS-DO-2024-0011-0010 — comment from ACLI
The NAIC has developed its definition of AI, and the insurance industry has responded with
information in accordance with that definition. Any definition developed by Treasury should
align with, or at a minimum not conflict with, definitions of AI in existing regulatory
frameworks for financial institutions.The Treasury definition of AI should reflect the following:
o Definitions should be tailored to the different types of AI and the use cases and
risks they pose. The definition used in this RFI is similar to an outdated definition put
forth by the Organization for Economic Coordination and Development (OECD),
which could be narrowed for specific use cases (e.g., tiering of risks under the EU
framework).
o There are also distinctions between generative AI used to make decisions, without
ultimately including human input or intervention, and AI used with human decisionmaking being absolute or the usage being solely for internal efficiencies and
therefore not impactful for customers.
o AI covers a broad range of predictive modeling techniques that would otherwise not
be considered Artificial Intelligence. A refinement to the definition that classifies AI
as machine learning systems that utilize artificial neural networks to make
predictions may be more appropriate.
o The definition of AI should exclude simpler computation tasks that companies have
been using for a long time.
Author(s): Various
Publication Date: accessed 9 Aug 2024
Publication Site: Regulations.gov
Link: https://content.naic.org/sites/default/files/capital-markets-market-buzz-private-credit-plr.pdf
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The terms private credit and private letter ratings (PLRs) have unintentionally elicited some confusion
about their respective meanings. While there is no standardized definition, and the term may be used
differently by market participants, private credit generally refers to debt, or debt-like, securities that are
not publicly issued or traded. On the other hand, PLRs refer to credit opinions that are assigned to
privately rated securities by credit rating providers and are only communicated to the issuer and a
specified group of investors.
To bring some clarity, at least with respect to how the NAIC views them, these terms can be characterized
in two dimensions: 1) distribution; and 2) transparency.
Publication Date: 30 July 2024
Publication Site: NAIC Capital Markets Bureau Market Buzz
Link:
https://content.naic.org/sites/default/files/capital-markets-special-reports-bank-loans-ye2023_0.pdf
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Executive Summary:
Bank loan investments increased to about $122 billion in book/adjusted carrying value (BACV)
at year-end 2023 from $117 billion at year-end 2022.Despite the 4.6% growth, bank loansremained at 1.4% of U.S. insurers’ total cash and invested
assets at year-end 2023—the same as year-end 2022.Approximately 70% of U.S. insurers’ bank loan investments were acquired, and 85% were held
by life companies.In particular, large life companies, or those with more than $10 billion in assets under
management, accounted for 82% of U.S. insurers’ bank loan exposure, up from nearly 80% in
2022.The top 25 insurance companies accounted for 75% of U.S. insurers’ total bank loan
investments at year-end 2023; the top 10 accounted for about 60%.Improvement in credit quality for U.S. insurer-bank loans continued, evidenced by a fourpercentage-point increase in those carrying NAIC 1 and NAIC 2 designations and a
corresponding four-percentage-point decrease in bank loans carrying NAIC 3 and NAIC 4
designations.
Author(s): Jennifer Johnson
Publication Date: 16 July 2024
Publication Site: NAIC Capital Markets Special Report
Link: https://content.naic.org/research_moody.htm
Excerpt: September 2023: 5.72%
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Publication Date: accessed 11 Oct 2023
Publication Site: NAIC
Link: https://content.naic.org/sites/default/files/capital-markets-special-reports-bankloans-ye2022.pdf
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Bank loans were one of the fastest-growing asset types in 2022 for U.S. insurers, increasing by 21% to $117 billion in book/adjusted carrying value (BACV) from $97.2 billion in 2021.
Despite the double-digit growth, bank loans were under 2% of U.S. insurers’ total cash and invested assets at year-end 2022, and about 75% were acquired in market transactions; the remaining 25% were issued by the reporting entities.
Large life companies, or those with more than $10 billion in assets under management, accounted for almost 80% of U.S. insurers’ bank loan exposure, up from 74% in 2021; the top 10 insurance companies accounted for 60% of U.S. insurers’ total bank loan exposure at year-end 2022, up from 54% in 2021.
There was continued improvement in credit quality for U.S. insurer bank loans, evidenced in part by a decrease in those carrying NAIC 4 Designations—i.e., implying a B credit rating—to 26% of total bank loans in 2022 from 33% in 2021, and countered by an increase in bank loans carrying NAIC 1 Designations to 24% in 2022 from 18% in 2021.
Total U.S. leveraged bank loan volume was about $1.7 trillion in 2022, representing a 2% increase from 2021.
Author(s): Jennifer Johnson
Publication Date: 11 July 2023
Publication Site: NAIC Capital Markets Bureau
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As corporate bonds are mainly fixed rate, their relative value will decrease as floating rate investments
become more attractive with higher benchmark rates. That is, bond prices will fall as yields rise to make
them more attractive, given that their fixed-rate coupons will be lower. About half of insurer bond
investments are corporate bonds, and the vast majority of U.S. insurer corporate bond investments are
investment grade credit quality. From January 2022 to January 2023, the ICE Bank of America (BofA)
Investment Grade Corporate Bond Index, which measures the performance of investment grade
corporate debt, was down by about 14%.
Corporate bond yields have increased significantly since the beginning of 2022 with rising interest rates
and widening credit spreads. As of year-end 2022, investment grade and high-yield corporate bond
yields averaged 5.5% and 8.9%, respectively (refer to Table 1). Investment grade yields increased by
approximately 270 bps during 2022, while speculative-grade yields increased by about 370 bps.
Author(s): Jennifer Johnson and Michele Wong
Publication Date: 23 Feb 2023
Publication Site: NAIC Capital Markets Special Report
Link: https://www.thinkadvisor.com/2022/12/16/insurtech-regs-dark-pattern-spottting-on-naics-to-do-list/
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In August [2022], Birny Birnbaum, the executive director of the Center for Economic Justice, asked the [NAIC] Market Regulation committee to train analysts to detect “dark patterns” and to define dark patterns as an unfair and deceptive trade practice.
The term “dark patterns” refers to techniques an online service can use to get consumers to do things they would otherwise not do, according to draft August meeting notes included in the committee’s fall national meeting packet.
Dark pattern techniques include nagging; efforts to keep users from understanding and comparing prices; obscuring important information; and the “roach motel” strategy, which makes signing up for an online service much easier than canceling it.
Author(s): Allison Bell
Publication Date: 16 Dec 2022
Publication Site: Think Advisor
Link: https://www.rstreet.org/2022/12/12/2022-insurance-regulation-report-card/
PDF link of report: https://www.rstreet.org/wp-content/uploads/2022/12/r-street-policy-study-no-272.pdf
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Executive Summary
We are pleased to present the 10th edition of R Street’s Insurance Regulation Report Card, which analyzes and evaluates the effectiveness of U.S. insurance regulation of property and casualty insurance. The first iteration of this report was published in June 2012, and this 2022 edition largely follows the format of prior reports. It begins with a brief introduction on the current landscape of U.S. insurance regulation; reviews recent, relevant federal and state-based regulatory changes; presents a detailed evaluation of the effectiveness of each state’s regulation of insurance in seven key categories; and synthesizes those category evaluations by offering a “report card” grade for each state for analysis and comparison purposes.This report draws on 2021 year-end statutory insurance financial statistics and the most recent datasets available for non-financial information. Sources include data and reports from the National Association of Insurance Commissioners (NAIC), S&P Global Market Intelligence, National Conference of State Legislatures, R Street analyses and others, all of which were accessed through Sept. 30, 2022.
In this report, we seek to shed light on the same three foundational issues we have focused on in past iterations of this report card:
• How free are consumers to choose the insurance products they want?
• How free are insurers to provide the insurance products consumers want?
• How effectively are states discharging their duties to monitor insurer solvency and foster competitive, private insurance markets?
Author(s): Jerry Theodorou
Publication Date: 12 Dec 2022
Publication Site: R Street
Link: https://content.naic.org/research_moody.htm
Historical record: https://docs.google.com/spreadsheets/d/1Sgi6XVzK0_sCtAWuCnUD02eObOTC3S4xlQgMep32OeU/edit?usp=sharing
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Publication Date: accessed 9 Dec 2022
Publication Site: NAIC
Link: https://content.naic.org/sites/default/files/capital-markets-special-reports-hy-ye2021_0.pdf
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The U.S. insurance industry’s high-yield bond exposure of almost $300 billion at year-end 2021 is the
highest BACV reported over the last decade. (See Chart 2.) From 2012 to 2021 , high-yield bond
exposure increased approximately 42% while total bond exposure grew approximately 34% as insurance
companies sought higher relative yields offered by high-yield bonds, among other asset classes, amid
the low interest rate environment of the past decade. In addition, most recently, credit quality
deterioration from the impact of the COVID-19 pandemic resulted in some migration of the industry’s
investment grade bond exposure into high-yield territory, particularly in 2020.
On a percentage basis, high-yield exposure accounted for 6% of total bonds at year-end 2021, the
second highest point over the 10 years ending 2021. While exposure declined modestly from 6.1% at
year-end 2020, as a percentage of total bonds, it remains elevated relative to the last 10 years. The most
recent period when U.S. insurers’ high-yield-bond exposure exceeded 6% of total bonds was in 2009
during the financial crisis when it reached 6.3%
Author(s): Michele Wong
Publication Date: 13 Oct 2022
Publication Site: NAIC Capital Markets Special Report