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Your Questions Answered: Insurance Regulatory Developments

Gary Sanginario

Associate Vice President, Product Management, Insurance Market Education

During this time of regulatory uncertainty, questions from the insurance industry abound: Who is monitoring what’s happening throughout the country? Who is responsible for what? Who is helping to address misinformation and educate the market? For many years, LexisNexis® Risk Solutions and the RELX Government Affairs teams have been committed to keeping a finger on the pulse of insurance-related legislation and regulatory activity across the U.S. for our own insight and more importantly, for our customers who come to us for our thoughts on what we are seeing with regulatory developments. Most recently, our Insurance Market Education team was formed to focus on relationship-building and education, always keeping the consumer top of mind. We recently captured some of the questions being asked by our customers in the life insurance market on this burgeoning topic of regulatory developments.

American flag and federal building

Do you think that CO SB 169 will spill over into other states? 

Our observation is that legislation like this is unlikely to spill over into the majority of states.  We have already seen this kind of proposal introduced in a number of states, but no other state has passed to date. I think there is a lot of wait and see on how Colorado handles the implementing regulations. That process is ongoing. I think you are going to see more and more activity regulating insurer use of AI for underwriting, and therefore our products.

Our teams have been paying close attention to the activity surrounding this bill before it was passed and in the rule-making process. We have seen some additional activity, including a proposal or two to ban some actuarially-sound, risk-based pricing variables for auto and home lines only. The industry’s trade associations, insurers and LexisNexis Risk Solutions have taken an active role in educating the industry on how these rating variables actually benefit consumers. This work has helped prevent most of these bills from moving forward. This is a true testament to the need for continuing conversations about the importance of understanding the data, the models we build and how the industry works together to benefit the consumer.

More recently, we proactively conducted detailed quantitative testing on our Life Risk Classifier model using well-established methodologies to address concerns about unfair bias based on race and ethnicity in credit-based insurance scores, including those that predict mortality. This is part of our commitment to the importance of transparency in model development and working with our customers to meet their needs.

Is LexisNexis Risk Solutions actively watching what is going on in the NAIC, Colorado and other states?

Yes, we are.

Our team regularly attends and monitors activity at NAIC and NCOIL in addition to our legislation-monitoring efforts across each state in the U.S. By listening to the dialogue, we are able to better understand various points of view and the questions asked by insurance regulators that help the industry be more proactive or more thoughtful in preparing requested responses when they come through. We are paying close attention to NAIC’s H Committee activity, which has a focus on the use of third-party data vendors.

Where the solution is governed by the Fair Credit Report Act (FCRA)*, does a consumer have access to the information LexisNexis Risk Solutions has about the consumer?

A consumer reporting agency may only disclose a consumer report for specific permissible purposes defined in the FCRA. Consumers can call the LexisNexis Risk Solutions consumer center to request a copy of their file.

As required by the FCRA, when a consumer contacts the LexisNexis Risk Solutions consumer center, LexisNexis will work with the consumer to confirm their identity and provide a copy of their file.

Consumers may dispute information contained in their file at any time. LexisNexis Risk Solutions will reinvestigate disputed information and remove or correct the information as appropriate.

Or, if a consumer contacts LexisNexis Risk Solutions following receipt of an adverse action letter from their insurer, the consumer will receive a copy of their file. 

*LexisNexis® Risk Classifier and LexisNexis® Attract™ are consumer reporting agency products provided by LexisNexis Risk Solutions and may only be accessed in compliance with the Fair Credit Reporting Act, 15 U.S.C. 1681, et seq.

 The Insurance Market Education team at LexisNexis Risk Solutions is actively engaged with the insurance industry and proactively monitors legislative and regulatory activity. We put the consumer first when developing our insurance solutions and feel strongly about the benefits of data used for risk-based pricing by insurers. We are here to support you so that you are best positioned to offer products that protect more consumers. If you have additional questions about regulatory activity or our efforts, please reach out to your Account Manager or I[email protected].