National Association of Insurance Commissioners Issues Annual Report Entitled 'Conquering the New Normal Together'

WASHINGTON, May 22 (TNSrep) -- The National Association of Insurance Commissioners issued a 68-page annual report in March 2023 entitled "Conquering the New Normal Together."

Here are excerpts:

* * *

Contents

Letter From the CEO and COO ... 3

Leaning Forward on Emerging Issues ... 7

* Key Policy Achievements ... 7

* New Avenues to Insurance Careers (N.A.I.C.) Foundation ... 9

* Key Regulatory Support Achievements ... 10

- Financial and Market Regulation ... 10

- Property/Casualty ... 10

- Research & Actuarial Services ... 11

- Financial Reporting Enhancements ... 11

* Accelerating Investments in Technology ... 12

* Key Technology and Analytical Tools Achievements ... 12

* Committee Highlights ... 14

* Consumer Outreach ... 17

* Consumer Insights -- Spanish Version ... 17

* Center for Insurance Policy and Research Highlights ... 18

* State Ahead Cloud Migration Completed ... 19

Rallying the Team ... 21

* Key Diversity, Equity, and Inclusion Achievements ... 21

* Our DE&I Journey ... 22

* Key People Operations Achievements ... 23

State Connected ... 26

2023 Outlook: Shaping Our Future ... 28

Financial Report ... 31

* * *

Letter from the CEO and COO

After celebrating 150 years as an organization, where do you go next? If you're the NAIC, you build on what came before to make the next 150 years even better.

In 2022, our core values guided us through the dual tasks of operating in the new normal and furthering our state-based agenda amid new challenges. Building on the solid foundation of our past, we enhanced connectivity among the NAIC's staff and Members, leaned forward on emerging issues, accelerated investments in technology, and rallied our internal team. This report describes our achievements in each of these four areas in greater detail.

The NAIC exists to assist our Members in executing their missions to protect consumers and keep markets solvent and stable. Operationally, we continued to deliver services and technology that offered key support and enhanced our Members' ability to execute their responsibilities.

In the policy arena, we continued to not only make our Members' voices heard but also to shape pro-consumer and pro-market policies.

Looking to the future, we also sought to retain and attract talent while continuing to promote our culture by adapting to the new post-COVID-19 workplace. We implemented a hybrid return-to-office plan, rolled out NAIC Connect, and developed new training courses on DE&I and workplace issues. Read on for more details!

After gradually increasing our return to in-person activities in 2021, we welcomed our most "normal" travel year since the pandemic started. It was great to see old friends and make new ones as we successfully oversaw 59 in-person hybrid events and returned to an in-person International Insurance Forum.

In one of our most exciting developments, we also announced the creation of the New Avenues to Insurance Careers (N.A.I.C.) Foundation. The N.A.I.C. Foundation will help bring new voices and greater representation to the industry and insurance regulation by providing internship opportunities and scholarships.

Last, but certainly not least, after a year of close coordination and collaboration, NAIC Members approved our new three-year State Connected strategic plan. State Connected is an all-in, team effort among Members and NAIC staff that will ensure our state-based system's ongoing legacy, maximizing our readiness to meet tomorrow's demands, and spread the word far and wide about how state insurance regulators can assist consumers.

Michael F. Consedine, Chief Executive Officer

Andrew J. Beal, Chief Operating Officer

* * *

Key Policy Achievements

In 2022, we marked the return of significant in-person dialogue with Washington, DC-based stakeholder groups, members of Congress and federal officials, state association partners, and key bilateral jurisdictions. We increased our collaboration and cooperation with our legislative colleagues at the National Council of Insurance Legislators (NCOIL), resulting in new opportunities to advocate for our state-based system. NAIC leadership held a series of dialogues with industry and consumer stakeholders that promoted greater transparency and understanding of NAIC initiatives. As a result of these engagements, the NAIC continued to be effective in influencing policy at domestic, federal, and international levels.

Other key achievements include:

* Conducted a virtual fly-in reaching nearly 200 congressional offices to highlight our priorities for the year.

* Held our first in-person International Insurance Forum since the COVID-19 pandemic began, reuniting more than 300 regulators and stakeholders from around the globe in Washington, DC to discuss current developments.

* Educated congressional committee leadership on private equity-owned insurers.

* Re-engaged in person with key bilateral partners and the International Association of Insurance Supervisors (IAIS).

* Advanced at the IAIS our approach for comparability of our aggregation method through strong advocacy at the International Insurance Forum and focused negotiations.

* Contributed to new initiatives at various international standard setting bodies our US-based approach on key emerging issues like climate risk, financial security, and innovation and technology.

* NAIC Leadership wrote to Congress on behalf of Members to share its perspective on Standard & Poor's (S&P's) ratings proposal and correct any misperception of the NAIC's viewpoint. S&P ultimately relented in its efforts to move forward with its model.

* Engaged with Congress on behalf of Members to revisit the federal law that limits the authority of states to oversee Medicare Advantage, resulting in a national conversation on Medicare Advantage marketing.

* Advocated for the Empowering States to Protect Seniors from Bad Actors Act (H.R. 5914/S. 3529), which would establish a senior investor protection grant program at the U.S. Securities and Exchange Commission (SEC) to support state regulatory efforts to target senior fraud. The U.S. House of Representatives overwhelming approved the bill amidst an otherwise divided Congress.

* Promoted state-based efforts addressing climate risk and resiliency and actively resisted unnecessary federal intervention and oversight through a series of Member letters and engagements with key federal agencies.

* Successfully complied with the U.S./European Union (EU)/ United Kingdom (UK) Covered Agreements and avoided federal preemption through a coordinated multi-year effort and adoption of the Credit for Reinsurance Model Law (#785) by all 56 Members.

* Participated in two key congressional hearings to highlight our state- based approaches on key emerging issues:

- Commissioner Kathleen A. Birrane (MD) advocated for state-based approaches to private equity, artificial intelligence (AI) and big data, and climate risk, among other issues during a U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing.

- Director Chlora Lindley-Myers (MO) testified before a U.S. House of Representatives' Financial Services Subcommittee on the NAIC's state-based efforts to promote DE&I in the insurance sector.

* * *

Key Technology and Analytical Tools Achievements

Cloud Transition and Cloud Network Redesign

The NAIC technology team has delivered on the cloud migration and continues to reduce the on-premises data center footprint. The NAIC completed our first year running systems in the cloud without significant negative business impacts. We evaluated the remaining systems hosted within NAIC data centers. Consistent with the NAIC cloud strategy, the operations team has continued to migrate internal applications to commodity Software-as-a-Service (SaaS) solutions anywhere possible. When finding a SaaS solution was not feasible, the NAIC technology team moved workloads into cloud data centers.

Systems for Electronic Rates & Forms Filing

In 2022, we completed the development of the first two phases of the System for Electronic Rates & Forms Filing (SERFF) modernization project, albeit slightly behind schedule. These new capabilities include a modern search for documents and a document comparison feature. Good progress was made on developing new reports and dashboards, with final completion of these expected in early 2023. Demonstrations of these features to stakeholders have gone well and will be deployed with the current platform to achieve business value as soon as possible. In 2023, we will finish building the core system on a low-code platform and launch it for the Interstate Insurance Product Regulation Commission (Compact). This project has brought in a new application programming interface (API) platform, which we have installed, and will be defining standards and usage information.

Data Platform

The NAIC continues to transition regulator access to financial and market regulation data from our operational systems to a cloud data warehouse. We worked with 43 states that have multiple connections to NAIC databases. By the end of 2022, roughly half of these connections had been moved to the new cloud data warehouse. This project significantly improves the NAIC's security posture and gives states access to all data in one place. We currently have the following datasets in the cloud data warehouse: financial, market conduct, regulatory actions, complaints, and SERFF data. We will add a new business intelligence tool in the first quarter of 2023 to query the data and additional datasets.

State Based Systems

The team completed implementation of State Based Systems (SBS) in four states. All the implementations were completed with high-quality customer service. This effort allows state insurance departments to shut down legacy systems while providing them with greater capabilities, lower cost of ownership, and more consistency.

* * *

Key Diversity, Equity, and Inclusion Achievements

Our focus on diversity, equity, and inclusion (DE&I) continues to make an impact on our performance, how we hire and how employees engage, and how we build on the NAIC's culture. Our DE&I journey is manifesting into a platform that requires all of us to be accountable for working in an organization that leverages diversity of thought and ensures equity and inclusion for all employees.

Affinity Groups

In 2022, we established our first two affinity groups. Affinity groups are safe forums for independent, voluntary groups of team members who share common interests, backgrounds, and/or goals to create and foster an inclusive environment where they feel challenged, empowered, and supported in developing and maximizing their personal potential and value to the organization.

Black Wall Street and Greenwood Rising Museum Learning Tour

Our Black History Month N.A.I.C.U. Exchange highlighted the stories and myths of the Black Wall Street and Greenwood massacre. Attendees watched a short documentary and heard about the account from Phil Armstrong, Interim Director of the Greenwood Rising Black Wall Street History Center.

Six months later, a two-day bus tour to Tulsa, OK, was organized for NAIC staff and insurance regulators from Missouri and Oklahoma. Chief Egunwale Fagbenro Amusan, owner of The Real Black Wall Street Tour Company, helped provide a first-hand learning experience that most history books fail to include.

NAIC Recognized for Its Diversity, Equity, and Inclusion Efforts

The NAIC's Diversity, Equity, and Inclusion (DE&I) team was recognized this year for receiving the Global Impact Award of Distinction from the Bowman Foundation for Workplace Equity and Mental Wellness.

* * *

Key People Operations Achievements

Culture

The NAIC's initiative to build on its culture continues to evolve. Who we hire, how we hire, and how we collaborate, connect, and leverage differences will affect how we support the mission and vision of the organization, as well as meet the expectations of our Members and consumers.

Flexibility

In March, the NAIC implemented the Workplace Experience plan, which classified jobs into on-site, hybrid, and remote. We remained flexible throughout 2022 and going into 2023 to ensure employees have the support they need to fully perform their jobs.

Talent Acquisition

We enhanced our talent acquisition area by redefining the roles to meet the demands of recruiting in 2022/2023; updating, documenting, and training managers on the hiring process; attending and sponsoring eight job fairs with a focus on growing diversity in the pipeline; and hiring more than 100 employees in support of the NAIC, the National Insurance Producer Registry (NIPR), and the Interstate Insurance Product Regulation Commission (Compact).

Spotlight

We implemented Spotlight--an employee recognition program--and met the stated goals of the project, including transparency with who receives recognition and remaining on budget. To date, employees have sent 8,698 recognition moments in the system.

Employee Engagement

The NAIC remained steady year over year with a 77% favorability rating, which was the same as 2021. However, we can see our trend line slowly moving up since we started monitoring this in 2017, when we first scored a 70%. Engagement is something that takes time to grow, and we are pleased with the steady upward movement of our ratings. More importantly, we are committed to doing what it takes to sustain high levels of engagement over time.

Workday

The People Operations & Engagement, Finance, and Information Technology Group (ITG) teams partnered to complete the request for proposal (RFP) for a new enterprise resource planning (ERP) system and selected Workday. Implementation is underway, and we plan to go live with our People Operations & Engagement team in July 2023. We foresee many benefits with the system, including the consolidation of our current human resources (HR) and finance systems, a reduction in manual processes, and furthering our company technology strategy by transitioning systems to the cloud.

* * *

The report is posted at: https://content.naic.org/sites/default/files/annual-report-2022.pdf

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, [email protected], Springfield, Virginia; 703/304-1897; https://targetednews.com