Additional Issues
Agent Licensing
In the wake of the COVID-19 pandemic, all brick and mortar producer licensing testing centers were closed and new producers couldn’t begin to sell because they couldn’t be tested or licensed. Transamerica and the broader industry advocated for an emergency mechanism to allow for producers to be licensed. We were successful in persuading most states to develop a temporary licensing program and/or an online testing protocol. Several states have implemented online testing, and many more are expected to join them in the relative near term. Brick and mortar testing locations are slowly beginning to open nationally.
Senior Financial Protections
Many states have implemented special rules to ensure that seniors and other potentially vulnerable people are protected from wrongdoers whose interest is in taking seniors’ money, instead of serving them with products that a suitable for them. These are known colloquially as elder financial abuse laws, which increase punitive damage penalties for anyone who takes advantage of the elderly or disabled in a financial transaction. Transamerica supports a federal safe harbor that would encourage financial firms to train and equip their employees to spot financial fraud and take steps to stop it.
Climate Change
Transamerica believes that governments, companies, and investors have a responsibility to mitigate climate change and its impacts, and to facilitate a transition to a climate-resilient economy. Emerging climate-related insurance regulation should be informed by the following principles.
First, climate-related regulation should differentiate by sector. Climate change presents different risks to different sectors of the insurance industry. Property-casualty insurers may be directly exposed to the direct physical effects of catastrophic weather events, while life insurers such as Transamerica are primarily exposed via indirect credit risk impacts resulting from physical risk and/or the anticipated transition to a climate-resilient economy.
Second, climate-related regulation should highlight the need for improved information across all industries. For life insurers, an accurate assessment of climate-related financial risk impacts is currently impeded by the absence of climate-related data of issuer companies, including a consistent definition and measurement of carbon footprint, and uniform disclosures. Transamerica supports consistent disclosure across all industries and sectors.
Third, climate-related regulation should promote uniformity, seeking to minimize operational burdens. As work on climate proceeds simultaneously on many fronts, we have a growing concern about the potential for burdensome, duplicative, and resource-intensive requirements from various bodies. For example, any required disclosures for the insurance sector should either follow the Task Force on Climate-related Financial Disclosures (TCFD) guidance or permit TCFD as an acceptable alternative. Alignment of supervisory and regulatory approaches should also be pursued.
Finally, regulatory expectations should acknowledge that the aspirational may not be currently achievable. The measurement and modeling of climate risk is at an early stage. It would be unwise for supervisors to impose requirements that assume that tools and sufficient data sets exist for climate-related financial risk to be assessed with the rigor and accuracy of the measurement of traditional insurance risks. It would also be prudent for any suggested timelines to reflect a gradual maturing and capacity-building within the insurance sector.
