In 2023 NCIGF worked with state guaranty associations, industry, and regulators to promote the enactment of language at the NAIC and in individual states. Amendments relating to restructured business and cyber coverage were adopted by the NAIC in late 2023 and are now incorporated in the NAIC Property and Casualty Insurance Guaranty Association Model Act. These amendments are the result of several years of efforts working with regulatory committees at the NAIC. The cyber coverage amendments were adopted as proposed by the NCIGF. These changes call for reasonable coverage limits and address services provided under cyber policy. Three states have adopted cyber amendments, and the measure is pending in two additional states in 2024. The restructuring amendment’s primary option is consistent with NCIGF policy in this regard- guaranty fund coverage should not be changed by the business transaction- claims that originated from guaranty fund covered policies would be covered after a restructuring and claims that were not covered before would not be covered after the transaction. Four states have enacted restructuring amendments consistently and multiple other states have it under consideration.

An NCIGF subcommittee of the Public Policy Committee was established in 2023 to review and monitor American Data and Privacy Protection Act (ADPPA) activity and related legislation in the states. In general, the subcommittee concluded that privacy legislation should not apply to guaranty funds because of the heavy administrative burden the laws require and the fact that guaranty associations do not sell data. The subcommittee continues to monitor state developments and share information with the property and casualty trade associations. In most cases, state laws will not apply because of a not-for-profit exemption or an exemption for entities handling fewer than a certain number of claims.

NCIGF was a strong proponent of earlier pre-liquidation planning throughout 2023. A primary focus of effort was to stress that planning and coordination with guaranty funds prior to a public insolvency proceeding is critical to a seamless transition for policyholders. NCIGF delivered this message to regulators and receivers in numerous forums throughout the year. A unique tabletop exercise was conducted at the November meeting of the NAIC. Over 100 regulators participated, most of whom were commissioners or regulatory staff involved with troubled companies before a public proceeding occurs. As a result of this highly regarded session, NCIGF and NOLHGA were invited to conduct a similar exercise at a commissioner’s summit event in February 2024. NCIGF hopes to build on the success of these two events in collaboration with the NAIC to conduct this type of exercise at future regulator events.

As part of revisions to the NAIC Holding Company Act, NCIGF worked with the Receivership and Insolvency Task Force (RITF) to add provisions to address troubled companies, specifically continuation of third-party services and ownership rights to claims data. These provisions have now been adopted in 15 states and are pending in multiple states. The community understands that the new Holding Company language has already been a helpful tool for regulators and receivers dealing with troubled companies and it is expected that laws such as this will be a key component of a seamless policyholder transition during liquidation.

• In response to the dynamic demands of insolvency data processing, NCIGF began work on the development of a flex workforce program. This initiative involves creating a database of skilled professionals who are available for contract-based engagements, particularly during periods of heightened activity and demand in insolvency cases.
• The program’s foundation is the identification of the specific skill sets, qualifications, and attributes that are most valuable in managing insolvency data efficiently. The next phase of this project will involve a thorough solicitation and vetting process to ensure that only the most capable individuals are considered for inclusion in this specialized pool.
• The objective of this initiative is to secure a minimum of five highly qualified professionals, thereby enhancing our preparedness and capacity to respond effectively to surges in insolvency data processing needs. This approach not only ensures operational agility but also reinforces our commitment to maintaining the highest standards of service and support for our members during critical times.

• In our ongoing commitment to cybersecurity and operational excellence, NCIGF reviewed and updated its internal IT policies and procedures in alignment with the highly respected NIST Cybersecurity Framework (NIST CSF). This evaluation and enhancement process ensured that NCIGF not only adopted but also consistently adheres to the best practices and guidelines recommended by the NIST CSF.
• NCIGF and GSI are dedicated to implementing these critical policies and procedures, fortifying our cybersecurity posture, and safeguarding our systems and data against evolving threats. This initiative reflects our commitment to maintaining the highest standards of cybersecurity and operational integrity, ensuring the continued protection and support of our members and stakeholders.

• NCIGF added a new ticketing system for submission and tracking of support requests from members, internal staff, and GSI clients. The system allows for self-service request reporting if desired and tracking of the complete history of individual requests from start-to-finish. Over time, the body of knowledge built from tracked requests is becoming an asset that enables staff to resolve recurring issues more quickly.

• 2023 saw the successful transition of our critical insolvency data services, including the UDS Data Mapper and SUDS, to a cloud-based hosting solution. This strategic move into a more agile and robust cloud environment signifies a significant leap forward in ensuring our systems are equipped with superior security measures, enhanced resilience against potential disruptions, and a scalable architecture capable of efficiently managing the substantial volumes of data that accompany large insolvency events.
• This strategic move aligns with our ongoing commitment to safeguarding the integrity and availability of insolvency-related data, supporting the seamless operation of the NCIGF IT Core Services.