NAIC Sets 2026 Priorities on Climate Risk, AI
The National Association of Insurance Commissioners (NAIC) published its 2026 priorities, focusing on disaster preparedness and the responsible use of technology. The priorities emphasize advanced modeling for climate-driven catastrophe losses and call for transparency and fairness in the use of AI for underwriting, claims, and pricing.
- The NAIC's focus on AI governance builds on its December 2023 Model Bulletin on the Use of Artificial Intelligence Systems by Insurers, which as of mid-2025, had been adopted by 24 states. - This AI model bulletin requires insurers to establish a formal, written AI program that details the governance, risk management, and internal controls for AI systems used in decision-making processes. - A key component of the NAIC's AI guidance is the principle of consumer transparency, which includes notifying customers when AI is being used and providing a way for them to inquire about AI-driven insurance decisions. - The NAIC’s work on technology and cybersecurity is led by the Innovation, Cybersecurity, and Technology (H) Committee, which was formed in December 2021 as the first new "letter committee" since 2004 to address the insurance implications of emerging technologies. - On the climate front, the NAIC updated its Climate Risk Disclosure Survey in 2022 to align with the international Task Force on Climate-Related Financial Disclosures (TCFD) framework, which is used by regulators in 15 states to assess insurers' climate-related risks. - To support regulators in understanding advanced modeling, the NAIC established a Catastrophe Modeling Center of Excellence (COE) which provides technical training and expertise on the use of catastrophe models in the industry. - For 2026, planned actions include piloting a new artificial intelligence evaluation tool and expanding regulator expertise through targeted education and training on emerging tech. - The 2026 priorities also involve developing more specific regulatory guidance for insurers on catastrophe modeling, climate-related exposures, and stress testing to enhance resilience against natural disasters.
