accordance with the Federal Advisory Committee Act, the meeting was open to the public.Committee Members Present:DAN GLASER, Marsh McLennan, ChairmanERIC ANDERSEN, Aon

AMY BACH, United Policyholders

BIRNY I3IRNBAUM, Center for Economic Justice

QUINCY BRANCH, Branch Benefits Consultants

KERMITT BROOKS, Guardian Life Insurance Company of AmericaBILL CHURNEY, Verisk

MICHAEL CONWAY, Colorado Division of InsuranceBETH DWYER, Rhode Island Insurance DivisionROB FALZON, PrudentialLUCY FATO, AIGJOHN FIELDING, Proxy for Joe Wayland, Chubb GroupDAMON HART, Liberty MutualDOUG HELLER, Consumer Federation of America

EDMOND JORDAN, Louisiana House of RepresentativesPETER KOCHENBURGER, University of Connecticut School of LawLAURA LAZARCZYK, Zurich North AmericaKATHY QUERFELD, Proxy for Sean McGovern, AXA XL

JULIE SPORE, TransamericaJOANNA SYROKA, Proxy for John Seo, Fermat Capital Management

ANDREW STOLFI, Oregon Department of Insurance

BETSY WARD, MassMutualDepartment of Treasury Staff Present:

STEVEN SEITZ, Director, FlOSTEPHANIE SCHMELZ, Deputy Director, FlO

JOHN GUDGEL, Senior Insurance Regulatory Policy Analyst, FIO

SILAB MOHANTY, Senior Insurance Regulatory Policy Analyst, FIO

ELIZABETH BROWN, Senior Insurance Regulatory Policy Analyst, FIOAlso Present:

NEAL ARKLIE, Lloyds

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Update on FlO ActivitiesDirector Seitz welcomed the new members and thanked Sean McGovern, Quincy Branch, andBeth Dwyer for their service, this being their last meeting. He also thanked Dan Glaser for hislong service as FACT chair. Director Seitz then provided an update on FTO Activities.On September 29th, FIO published a notice in the Federal Register seeking public comments on

the adequacy of cyber insurance for catastrophic cyber incidents for U.S. critical infrastructure,whether a federal insurance response is warranted, and if so, what form such a response might

take. FIO extended the comment period until December 14, 2022. FTO, in coordination with the

Cybersecurity and Tnfrastructure Security Agency (CISA) and the Office of the National Cyber

Director (ONCD), currently anticipates completing its initial assessment of a federal insurancebackstop for catastrophic cyber incidents by the end of 2023.FlO is monitoring developments with respect to reinsurance and private equity. The increaseduse of offshore reinsurance by U.S. life insurers seems to be driven in part by activities linked to

structural shifts in the sector, as well as other market developments. One aspect of this

development is the increased migration of life insurance business to Bermuda through affiliatedand non-affiliated reinsurance transactions. FlO has been engaged with Bermudan regulators on

this topic, and appreciates the productive interactions concerning reinsurance trends they are

seeing and efforts to share perspective on the relevant regulatory frameworks.

Regarding its work on the availability and affordability of personal auto insurance in the United

States, FIO is continuing to work on updating the 2017 study. FIO is making good progress on

drafting a report with an update, along with some expanded analysis, and a likely discussion ofcomponents that influence premiums paid for personal auto insurance, such as underwriting,ratemaking, state regulation, advances in technology, costs, and other factors. Member Hellerasked for more details on the timeframes for issuance ofthe Auto Insurance AffordabilityReport. Director Seitz noted the team hopes to wrap up the report in early 2023.

FIO continues to engage at the international level, including at the International Association of

Insurance Supervisors (IAIS) and the OECD Insurance and Private Pensions Committee (IPPC).

On the Insurance Capital Standard (ICS), the IAIS will soon be moving into the fourth year of

the monitoring period. U.S. members ofthe IAIS continue to focus on improving the ICS

methodology to better align with U.S. markets, business practices, and products. FlO is alsoworking internationally to highlight insurance perspectives for discussions around climaterelated financial risk. This includes participation in the U.N. Sustainable Insurance Forum (SIF)

and in the Network of Central Banks and Supervisors for Greening the Financial System(NGFS).

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statutory authorities, further FTO’s work to assess both the availability of insurance, as well as

the affordability of such insurance. The comment period is open through December 20, and

Director Seitz expressed his hope that FACT members and the public would provide FTO with

feedback on the proposal.Presentation: Update on FlO’s Climate-Related Work

Silab Mohanty and Elizabeth Brown, Ff0 Senior Insurance Regulatory Policy Analysts,

provided an update on FTO’s climate-related work. The presentation addressed the rationale for,

and details of, FTO’s proposed data call.

During the presentation, Mr. Mohanty explained that FlO’s proposal attempts to balance the

need for granular information with the burden on insurers to provide such information.

Ms. Brown noted that the data collection is currently at the proposal stage and Ff0 is seekingpublic comment on the questions posed in the proposal. It is part of FlO’s continued

engagement process with state insurance regulators, the NAIC, the insurance industry,

policyholder groups, academics, and others. This process includes the request for information

that FI0 published in August of 2021. In June 2022, FlO engaged with the 50 states, D.C., andthe five U.S. territories regarding FlO’s proposed data template. This engagement helped shapethe scope of FlO’s proposed data collection. FI0 welcomes comments on the proposed datacollection’s underwriting focus, insurance lines of business covered, selection of insurers, thedata elements, the reporting framework, the reporting period, the granularity and scope of thedata, the burden on insurers and ways to minimize it, how frequently the data should be

collected, and how FlO should assess the impact of climate-related risks on the availability oraffordability of insurance.

Member Birnbaum noted that, in the presentation, FlO stated that it will not be publishing

confidential or firm specific data from individual submissions. He asked what data FTO believes

to be confidential. Ms. Brown noted that the Federal Insurance Office Act includes

confidentiality restrictions regarding non-publicly available data or information that is submitted

to FlO.

Member Bimbaum asked that assuming FlO obtains data on 80 percent of the homeowner’s

market from 2017 to 2021, whether the presenters would provide some examples of the insights

Ff0 expects to glean from this data. Mr. Mohanty answered that the intent of gathering this data

is to understand both the availability of insurance and also the affordability of insurance at a

granular level, particularly for those lower and middle income and vulnerable populations.

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factors that may influence the cost of products.

Presentation on the Cyber Insurance Market

Neil Arklie, Lloyds’ Head of Cyber Underwriting gave a presentation on the cyber insurance

marketplace with a focus on Lloyds’ work to address silent cyber underwriting risks and Lloyds’new cyber war clauses, which were introduced in 2021.

Mr. Arklie noted that Lloyds writes approximately 20 percent of global premiums of whichapproximately 50 percent comes from the United States, and from the UK and Canada. Lloyds isalso seeing growing cyber interest in Europe and Latin America. He noted that Lloyds has had a

non-affirmative strategy in place for a while. Lloyds is concerned about systemic exposures in

cyber insurance markets. He noted that 2019 and 2020 were challenging years for the cybermarket with loss ratios of 120 and 130 percent on a net combined basis.His presentation highlighted the challenges in meeting Lloyds’ mandate that all policies eitheraffirm cyber coverage or exclude it from the reinsurance policy. For 97.2 percent of all policies

underwritten by Lloyds, however, the underwriters have now attested that they have clarified thenon-affirmative side of coverage. Lloyds also stress tests individual insurers and the entiremarket once a year.

Mr. Arklie next discussed catastrophic nation state-backed attacks and the recently publishedLloyds cyber war clauses. Lloyds issued a bulletin which got a lot of media coverage, much of

this coverage contained some inaccurate information. Mr. Arklie noted that many of them were

saying Lloyds was cancelling all coverage for state-backed attacks, which is clearly not the

intent. What Lloyds did, he said, was clarify coverage, not mandate exclusions. There are over

40 different clauses being used with carvebacks for terrorism and various other items, which

Lloyds strongly felt was problematic. He noted that Lloyds’ role is to support a competitive and

resilient cyber insurance market but, at the same time, have a prudential duty to protect the

market from large losses. Mr. Arklie further noted that Lloyds is now seeing greatercommonality in the market without having standardization.The exclusion for state-backed attacks is addressed to an event that significantly impairs theability of a state to function, i.e., it is catastrophic whereby the security capability of the state is

impaired. Further, Mr. Arklie emphasized, these are model clauses, and are not mandated.Member Kochenburger asked if Lloyds knew the percentage of the premium that covered nationstate backed attacks. Mr. Arklie responded that insurers probably have exposure in cyber

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business, then adjourned the meeting.

MEETING ADJOURNED AT 2:30 PM.

I hereby certify these minutes of the December 8, 2022, Federal Advisory Committee onInsurance public meeting are true and correct to the best of my knowledge.

John Doyle, chair (on behalf of retired chair Dan Glaser)

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