Advocates call on NAIC to release property data
Aside from some states refusing to participate in the National Association of Insurance Commissioners (NAIC) call for property market data, issued March 8, another obstacle to managing risk to assure availability and affordability of insurance for homeowners has emerged.
NAIC stated it will not release the collected data publicly, but will share it with the Federal Insurance Office (FIO), a regulatory unit of the U.S. Treasury. A group of 20 advocacy organizations engaged in housing and consumer issues, along with 15 university professors and researchers engaged in climate change and housing issues, wrote to NAIC on May 7 urging full access to data.
Lilith Fellowes-Granda, associate director for financial regulation at the Center for American Progress.
Keeping the collected data under wraps limits the risk analysis that other professionals can do and the ability to learn what communities more threatened by climate change are facing, stated Lilith Fellowes-Granda, associate director for financial regulation at the Center for American Progress.
“Policymakers, advocates and insurers themselves are making these decisions in real time, or trying to craft policies in real time to address the insurance affordability and availability crisis,” she said. Not releasing data “just severely limits the brain trust that can tap into this information,” she added.
FIO, which charged NAIC with conducting the call for data, has as part of its mandate a responsibility to ensure that underserved communities can access insurance.
Douglas Heller, director of insurance at the Consumer Federation of America, sees value in independent parties aside from FIO and NAIC having the data.
Douglas Heller, director of insurance at the Consumer Federation of America.
Consumer Federation of America
“That puts a really tall wall around the data,” he said. “It means that we’re not going to actually have a diverse group of independent researchers able to review the data and look at it through their own lens, which really renders the data so much less useful.”
Outside research using the collected property market data would also track the impact of this data for insurance in the context of the ensuing impact on the whole financial market system, according to Fellowes-Granda.
“What happens if someone loses their insurance coverage, and faces disaster and how that risk can trickle up to banks and other parts of our financial system too?” she said. “Hopefully, we can see where that is from a systemic risk perspective.”
To get the data NAIC is collecting, the group of state insurance commissioners may have needed to make concessions to the insurers that are its source, as Heller sees it.
“Part of the reason NAIC may be so opaque about this whole process is because the industry says, ‘We’re only going to go along and not put up a fuss if you give us these considerations.'”
Heller added that insurance is a critical financial infrastructure for the U.S. and the impact of climate risk on coverage is a crisis that needs to be addressed.
“This is a national crisis, whether it’s a state or federal crisis jurisdictionally, it’s a national crisis in nature,” he said. “Congress needs to understand that and I hope they put pressure on the NAIC to make this data public. I’m not convinced we’re at the end of this discussion. But where we are right now is bad for the public and that needs to change.”
