Opening Session

McPeak Closes a Whirlwind Year

Excerpts from NAIC President and Tennessee Commissioner of Commerce and Insurance Julie Mix McPeak's Opening Session prepared remarks:

This has been a year punctuated by disasters of all kinds, from tornados, to wildfires, to tropical storms - we have all been tested in some way but time and time again we have shown the resilience of our insurance system and the strength of state regulators and the NAIC.

On a related note, some of you may have noticed the protesters highlighting concerns with insurers who invest in fossil fuels outside. While there are a variety of views around this table and in this room, what binds us together is our commitment to consumers and strong, solvent markets. As the fires vividly illustrate, we expect companies to be there for their customers and otherwise conduct themselves in a responsible manner to keep those promises to their customers.

Turning back to our host city, it is only fitting that our last meeting of the year be in a city that celebrates diversity of thought particularly given that innovation, inclusion, and collaboration are some of the hallmarks of the NAIC, First and foremost, thank you from the bottom of my heart for allowing me to serve as your president this year. It has been an honor and a privilege to represent you.

For almost 150 years, we have gathered to find solutions to the problems of the world around us. Perhaps now more than ever, it is critical that we work together to address our challenges. The work that ALL of us do here adds to the rich, colorful tapestry of the NAIC and will serve as our legacy for the generations to come. I want to thank the dedicated members of the NAIC, our collective staffs and the many guests who have worked collaboratively with us to constructively review and offer actionable solutions this year and throughout the years. Forgive me if I’m a bit nostalgic at this last meeting as President, but it has been such a pleasure to work with so many of you over the years. In fact, many of you know my daughter, Anne Elizabeth, who will be joining us later in the meeting. It really puts my time here in perspective as she gets ready to start college, I am proud to see how much she’s grown. The same can be said of the NAIC. Let me take a moment to highlight a few of our successes.

One of the initiatives I’m most proud of is our efforts to push Congress for legislation to stabilize health insurance markets and work with the Administration on regulations that serve our system. Health insurance can be a polarizing issue and has fractured other state groups. But commissioners of both political parties were front and center this year in DC pressing for common sense reforms and consensus. There will be further opportunities for us to make the case in DC on health issues, but our experience this year elevated the non-partisan profile of the NAIC and will serve as a model for all of us – and perhaps even those in Washington – that good ideas can be advanced if we acknowledge our differences of opinion, work for the greater good, and seek consensus in spite of our differences. I am so proud that in a time of political divisiveness, we stood united for our consumers and markets.

While bipartisan legislation didn’t advance, we were successful in urging the Administration to use its regulatory authority to return more flexibility to the states, including removing the three-month limitation on short-term, limited duration plans and expanding access to Association Health Plans while preserving state oversight. I recognize that states have different views, but we now have the ability to make the decisions that are right for each of our own markets.

The NAIC was also successful in addressing concerns about air ambulance balance billing in the FAA Reauthorization legislation. While the final provisions do not override federal preemption, it does set up committee that includes a state regulator to find solutions. The impact of air ambulance balance billing on a family already facing a crisis deserves our continued attention, and I am thankful that we now have a vehicle to advocate for consumers.

One bill passed this year was the Economic Growth, Regulatory Relief and Consumer Protection Act which was signed into

law. It contained two NAIC priorities. The first was the International Insurance Capital Standards Accountability Act, which provides additional oversight. The second, the Senior Safe Act provides immunity to those reporting suspected senior exploitation.

One of the biggest wins for our system happened recently when Prudential was de-designated as a systemically important insurer. The NAIC had long disagreed with that designation and had serious concerns with the original analysis. FSOC's decision to de-designate reflects a revised and improved understanding of the insurance business model and state insurance regulation. We now open a new chapter on systemic risk analysis where state regulators have an opportunity to lead. And lead we will through important initiatives such as our macroprudential and group capital calculation projects, amongst others.

Collectively, this fall we’ve focused on educating consumers about disaster preparedness, recovery and resiliency planning. Hurricanes, volcanos, wildfires, tornados and flooding are unfortunate reminders of the importance of our jobs. They are Mother Nature’s harsh reminder of the necessity of insurance especially flood coverage. To this end, we created and distributed public service announcements educating consumers about flood insurance. These efforts have been amplified and personalized by many of you and your departments.

This is so important when we look at past disasters, such as the storms that hit Puerto Rico. The NAIC continues to support Puerto Rico’s recovery efforts by producing a PSA and maintaining a call center to respond to consumer inquiries concerning disaster recovery. Through multiple disasters, our members continue to turn to each other to offer support. I take great pride in our members’ responses to calls for assistance. This is just one area where the public service-minded members of this organization step up when called and serve the greater good.

The National Flood Insurance Program is set to expire (AGAIN) at the end of this month. I ask everyone here to reach out to your Congressional delegation and urge them to pass a long-term reauthorization. Given the number of floods over recent years it is an important program. There is no good reason that it shouldn’t be addressed with a long-term solution. Equally important is the promotion of a viable private market to offer consumers more choices and ideally expand the footprint of those covered for flood losses. Our experience this year has unfortunately shown us that once “historic” flooding events are now all too common.

Flood insurance is only one area where we have an opportunity to innovate. This year we’ve spent lot of time focused on ways regulators can better connect with companies – both established players and new market entrants – to encourage partnerships. Again, giving consumers additional choices, often at lower prices.

Just last month, regulators participated in and hosted several events focused on new technologies that can make the industry more efficient and create new products. We want to be prepared for the changing world. Collectively, we are spending considerable time learning how new technologies come into play and what we as regulators can do to foster innovation while keeping consumers protected.

For example, at CIPR’s autonomous vehicle event we learned about the challenges of operating autonomous vehicles in a state like Pennsylvania that has both the horse and buggy and cultural norms like the “Pittsburgh left” to navigate. I encourage you all to use the NAIC as a resource, as I have, to stay on top of new developments – from attending the Insurance Summit in Kansas City or logging into one of the Center for Insurance Policy and Research’s webinars.

Speaking of the CIPR, here in San Francisco we are hosting an event on health care cost drivers. Increasing costs of care is at the core of rising insurance premiums, and no amount of attention on insurance reform will solve this problem without broader efforts. This session promises to be informative as we look at ways to keep our health insurance markets stable in our states.

Looking abroad, it was a whirlwind year for our international efforts.

Our coordination with “Team USA” has improved significantly throughout 2018, resulting in recognition of our united front both domestically and abroad. A key result of this united front was encouraging the IAIS to transition to an activities-based-approach to systemic risk assessment, which is now reflected in its holistic framework. The NAIC continues to press the case for inclusion of an aggregation method in the international capital standard deliberations. This project needs to acknowledge the different frameworks in play around the globe, so we continue to encourage the IAIS to focus on flexible standards that recognize regional differences while still striving for high-quality, comparable outcomes.

While our engagement at the IAIS is significant, our focus internationally includes regular bilateral and regional dialogues as well. We take strategic advantage of opportunities to engage with our fellow regulators from around the world, and met with representatives from literally every continent – except the still surprisingly nascent Antarctic insurance market! These opportunities allow us to coordinate on issues impacting insurers who span our respective jurisdictions and share experiences that elevate supervision around the globe.

That was quite a lot of ground to cover, and I haven’t even mentioned the Credit for Reinsurance model law and a post-Brexit covered agreement which remain important on-going areas of our continual focus. The work of our many committees, task forces, and working groups doesn’t always make headlines or garner much attention, but their critical work maintains the infrastructure of insurance regulation, and is the foundation of our policy and strategy in Washington and abroad. There are too many initiatives to mention, but to the members around this table and to the regulators and staff in the room, I can’t thank you enough for doing the hard and necessary work that makes state regulation strong and effective.

Before I close I would like to turn for a moment to the business of running this organization. State Ahead is the blueprint for the future success of the NAIC. Nearly a year after adoption, State Ahead accomplishments are racking up. To-date we have 13 completed projects and have many in the works and more scheduled to begin in 2019. While establishing our collective vision for the future of the NAIC was a critical first step, this year we began to bring that vision to life. We have more work to do but we have boldly embarked on our path towards transformation.

2018 has been a remarkable year for insurance regulation, and me personally. I would like to thank our members for the opportunity to lead this outstanding organization. I truly think this association personifies “coolness, good judgement and entire competence.” And that phrase is significant to me, as that language was used to describe the captain of the SS Tennessee, a steamship beached not far from here.

After missing the Golden Gate entrance to the bay in 1853. Captain Mellus beached the ship, saving all 520 passengers, their baggage and incidentally 14 chests of gold before the waves crashed the ship’s hull on the rocks. The area where the Tennessee ran aground was renamed “Tennessee Cove” and is part of the Golden Gate National Parks Conservancy.

I understand that, even today, you can see the engine of the SS Tennessee if you visit the national park at low tide. By protecting his constituents, the passengers later described the Captain’s actions in the same way I would describe how my colleagues protect consumers “with coolness, good judgement and entire competence.” Enjoy your time in San Francisco and thank you again for the honor to serve as your president.

About the NAIC

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. For more information, visit

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