Skip to main content
Resource Center


For more information, please visit our Resource Center.

Dec. 8, 2020

Fall 2020 Opening Session Prepared Remarks

NAIC President and South Carolina Insurance Director Ray Farmer's prepared remarks for the virtual Fall 2020 National Meeting Opening Session. 

Where do I even start when talking about a year like 2020?  It has been a year of trials, certainly, but also a year where NAIC members demonstrated their resiliency in the face of historic adversity.  We stood strong in the face of a global pandemic.  We came together in the aftermath of historic natural catastrophes.  We united to confront issues like social inequality and climate risk.  Against a backdrop of uncertainty, my remarks today are designed to be a celebration of this membership and our state-based system.  We are by no means through the COVID-19 crisis and I know we face an equally uncertain 2021.  But given our collective experience this year, I do not doubt that we will continue to persevere, adapt, and ultimately prevail.   

COVID-19 Response: 

As we’ve said time and again, 2020 has not been the year we planned, but it is the year we got.  That became very apparent in March when our number one priority became navigating the challenges associated with COVID-19.  The outbreak of the virus led to a "perfect storm" requiring the immediate attention and engagement of state insurance regulators.  It is not an exaggeration to say that the swift action of NAIC members saved lives and businesses.  As is the tradition of the NAIC, we are at our best when things are at their worst.    

When the pandemic began, nearly all states acted to remove consumer cost-sharing for COVID-19 testing.  As federal requirements emerged, states worked to communicate and implement federal standards and offer feedback on their effectiveness.  We advanced policies allowing consumers access to providers through telemedicine and other means.  The NAIC continues to engage with federal agencies, including the U.S. Department of Health and Human Services and Centers for Medicare and Medicaid Services, to provide a forum for coordination between state and federal efforts surrounding health insurance coverage.  Likewise, the NAIC remains directly engaged with the U.S. Congress to ensure federal efforts stabilize and support health insurance markets and they are coordinated and effective. 

Once we addressed critical issues related to COVID-19 testing and treatment, we quickly pivoted to taking on broader issues impacting consumers.  State regulators acted to address claims issues and provide premium due date extensions.  Through the NAIC, state regulators worked collectively to gather key data points from business interruption insurers to assess the size of the market, extent of exclusions, and scope of COVID-19 claims.  Throughout this crisis, the NAIC has advised Congress on business interruption coverage issues and we expect to be at the table as Congress looks at potential programs to cover future pandemic business losses.    

To help our members and the industry understand the issues around a federal mechanism for pandemic Business Interruption, CIPR is holding a special session tomorrow at 11 a.m. Eastern on creating a federal insurance mechanism. We'll be looking at what could be and should be, and lessons learned from previously established federal programs for flood, crop, and terrorism risks.  I encourage you to join us and participate in what is sure to be an enlightening session on an evolving issue. 

In the wake of the pandemic, our efforts also allowed many businesses to remain open and consumers in their homes.  The NAIC worked with members to provide new accounting and reporting guidance for the treatment of overdue mortgages.  We also extended the due dates of quarterly filings to provide some relief and guidance for insurers — and, by extension business owners — by allowing more time for insurers to collect premiums before reporting the payments as late in the statutory financial statements.  

As driving habits began to change due to the pandemic and we all stayed home as directed, state regulators worked with auto insurers to return premiums to consumers.  I know many of us were getting about 2 weeks to a gallon at that point. So, in April, state insurance departments urged insurers to issue immediate reductions in auto insurance premiums to reflect reduced driving.  State regulators across the nation worked with insurers to address filing and accounting issues to help implement premium reductions quickly. 

Insurance premium relief measures generally resulted in reductions of 15−25% off customers' premium payments for one or more months during the spring and, according to the Insurance Information Institute, returned approximately $10.5 billion to policyholders. 

Commissioners also engaged with U.S. policymakers and regulators from around the globe advising them on critical developments and coordinating our actions.  Members took steps through the NAIC to establish a uniform and consistent manner for collecting data related to the pandemic's impact.  State insurance departments sent out numerous bulletins educating consumers about their insurance coverage and warning them about potential scams.  To make it easier for interested parties to find these bulletins and alerts, both the NAIC and NIPR created Coronavirus Resource Centers on their respective websites.  Those resources have been accessed more than 149,000 times. 

The NAIC enhanced market surveillance and analysis on the financial impacts of COVID-19 and worked with members to establish timely accounting and reporting guidance.  Our world-class insurance market in the U.S. has proven itself in past financial crises and it has performed admirably during this pandemic.  That performance is the result of a decade's worth of effort by the NAIC to improve group supervision, enterprise risk management, enhance U.S. capital requirements, and advance our ability to effectively coordinate with our counterparts across the globe.  Because of our work, the U.S. market is being characterized as the strongest and most resilient global market through this crisis.  Our work is not yet done and the NAIC will continue to advance additional improvements to our system.   

Our pandemic response also extended to the producer licensing area.  The NAIC and NIPR provided technical and communications support to 49 states to implement over 140 orders and bulletins related to producer licensing.  

The NAIC will continue to produce updates around the many actions that the state-based system is taking to navigate through this pandemic and associated challenges. 

You know it's a historic year when this is the third time we've had to hold our National Meeting in a virtual format.  Never in the NAIC's almost 150-year history have we canceled all of our in-person national meetings in a single year.  While we have been physically separated, we have not been distanced.  To ensure that members could stay connected, the association focused on leveraging technology, streamlining operations, and looking for new ways to enhance communications among state regulators.  As you will recall, the NAIC held a virtual session on COVID-19 in mid-March.  This was only the start of what would be numerous virtual events including our National Meetings, Insurance Summit, and committee and working group sessions throughout the year.  

We are not through this pandemic or the longer-term economic uncertainty that it will likely leave in its wake, but as issues continue to evolve, we remain steadfast in our commitment to address them with flexibility and focus.  Though more work and even more pain may lie ahead as we deal with the remainder of this pandemic, I hope NAIC members and the larger sector take a moment to celebrate our work and the impact that it has had on millions of Americans.   

Racial Equality: 

As proud as I am of the NAIC's member response to the pandemic, I take even more greater personal pride in our engagement on the issues of race, diversity, and inclusion in the insurance sector.  While many organizations could become consumed with focusing on the pandemic, we demonstrated the ability to organizationally "flex" and take on emerging issues where NAIC member engagement was critical.  

As we began to adapt to our work from home situations and implemented new and different ways to operate, the issue of racial equality took center stage.  Thousands took to the streets protesting the deaths of several Black Americans.  This was a historic inflection point and spurred multiple conversations across the nation and within our membership.  

We knew that we must lead on these issues.  The NAIC formed a Special Committee on Race and Insurance, the first of its kind in NAIC history.  

This committee is focused on 5 critical workstreams and will make recommendations on actionable steps to better serve historically underrepresented groups.  The first 2 workstreams are focused on researching and analyzing the level of diversity and inclusion within the insurance industry, the NAIC, and the state insurance regulatory community.  The third, fourth, and fifth work streams look at what barriers exist in the insurance sector that potentially disadvantage people of color within Property and Casualty, Life Insurance and Annuities, and Health Insurance business lines.  

The Committee recommendations, which are expected before the end of the year or early next year, will set the stage for the NAIC's long-term engagement on the issues of race and diversity.  And make no mistake, this initiative will continue to be a priority for our membership.  NAIC officers have committed to ongoing leadership.  We will make a difference. 

We believe in not only saying we will do the right thing but, as an organization, we are also committed to following through and walking the walk.  In doing so, the NAIC hired our first Diversity, Equity, and Inclusion officer and formed an employee-based Diversity, Equity, and Inclusion committee.  We look forward to learning and growing as an organization through the work that is done.  

Guiding Principles for AI: 

One of the first places NAIC members took a stand towards greater equality was around the potential of proxy discrimination within artificial intelligence tools.  Members unanimously adopted guiding principles on artificial intelligence emphasizing the importance of accountability, compliance, transparency, and safe, secure, and robust outputs.  

These guidelines leverage existing state authorities and were established to inform and articulate general expectations for businesses, professionals, and stakeholders as the industry implements AI tools to facilitate operations. 

Climate Risk: 

And, because forces of nature don’t really care that there is an ongoing global pandemic, we have been confronted with a nearly unprecedented number of natural disasters this year.  Again, this is an area where the NAIC "flexed" and committed its resources and membership to take on this generational issue.  In 2020, we broke the 1916 record for the number of named storms making landfall in the United States in the month October.  Historic wildfires continue to ravage western states and damaging storms struck the Midwest.  Commissioners once again stepped up by forming an executive-level Climate & Resiliency Task Force and making -climate risk a strategic priority for the organization.  

This Task Force serves as the coordinating NAIC body for discussion and engagement on climate-related risk and resiliency issues.  Members will consider appropriate climate risk disclosures and evaluate financial regulatory approaches. The Task Force will look for innovative insurer solutions and identify sustainability, resilience, and mitigation issues and solutions.  

Task Force members will also focus on pre-disaster mitigation and resiliency.  Our members have taken an active role in educating Congress on issues such as the NFIP, which was reauthorized for another year.  Members also contribute to the international dialogue on this critical topic at organizations like the Sustainable Insurance Forum.  

Long-Term Care: 

Long-Term Care Insurance continues to be a key focus for us here at the NAIC, one that we expect will continue to be at the forefront throughout 2021.  This year, our attention has been on developing a state-based mechanism to drive a more consistent approach for reviewing rate increase requests while developing guiding principles and regulatory tools for evaluating reduced benefit options in place of a higher premium.  

The multi-state actuarial rate review team has completed its first pilot project advisory report.   

The Reduced Benefit Options Subgroup is focused on providing policyholders guidance when faced with the choice of a higher premium or reduced policy benefits.     

The Subgroup is developing a series of principles related to fairness and equity and is also developing guidance to improve the clarity of communications with policyholders. 

We have also organized a Subgroup to coordinate matters concerning financial solvency issues.  Much of that Subgroup's work involves the ongoing financial and actuarial analysis of long-term care insurers, conducted in regulator-only sessions.   

Group Capital Calculation: 

Early in the year, NAIC staff completed crucial field-testing work that advanced discussions on several key issues surrounding the Group Capital Calculation.  Since June, the Working Group and stakeholders have been focused on resolving remaining technical issues regarding the calculation and amending the NAIC Model Holding Company Act and Regulation to effectuate the GCC.  Both the GCC and the models are expected to be adopted by the Financial Condition E Committee during this Fall National Meeting. 

State Ahead: 

Nearly two-and-a-half years ago, the NAIC introduced State Ahead, a three-year blueprint for the NAIC's future.  This strategic plan laid out our vision and the series of actions and initiatives needed to make the NAIC more innovative, adaptive, and effective in support of its members and state-based insurance regulation.  

Although some projects were delayed due to the pandemic, 15 State Ahead projects were completed.  While I won’t cover them all, here are a few of the accomplishments. 

The NAIC consolidated and revised a communications portfolio designed to help educate consumers and small businesses.  The NAIC communications team worked with consumer advocates and committee working groups to improve the readability of these insights. 

We made significant progress in monitoring the financial solvency of the market, completing a proof of concept for AI-based solvency monitoring and enhancements to the NAIC's Enterprise Data Platform and Data Warehouse.  

The NAIC transitioned 29 states to the new SBS platform.  

We enhanced data visualization capabilities for market conduct regulators and created a new Annual Market Data Report to provide critical feedback to the Market Information Systems Task Force. This new report highlights successes in data reporting and areas for improvement, leading to more accurate analysis, more targeted use of state insurance resources, and enhanced consumer protection. 

The NAIC also expanded its member outreach and saw a 12% increase in the Professional Designation Program enrollments. Two new programs were rolled out this year: a New Financial Regulator Training and a "train-the-trainer" Advanced Financial Regulator training.   

We all have a new appreciation for imagining the challenges and opportunities that lie ahead.  The members will continue to work together to define the NAIC of the future as we outline State Ahead 2.0 in late 2021.   


Although we are hard at work on planning for the NAIC of the future, it's important to reflect on our past and how far we have come. Indeed, next year the NAIC will celebrate its 150th anniversary.  Our efforts, both historic and current, have resulted in an insurance market that continues to show strength and resiliency in this time of crisis. As the pandemic continues to evolve, we remain resolute in our commitment to protecting consumers and maintaining strong insurance markets.   

NAIC CEO Mike Consedine asked me during a podcast recording of The Regulators how I would want future generations to remember the NAIC membership during this historic year.  That's a serious question and I recall telling Mike that first and foremost I'd want us to be remembered for taking care of our people – our consumers, our staff, and each other.  That we treated others as we would want to be treated.  That we stayed focused on the issues.  And, ultimately, that we became better regulators and better people having gone through such an event.   

I see now at the end of this year that aspirational vision is a reality.  We can all be proud of the legacy we have created over this long year.  It has also been my greatest honor to serve alongside you all during this period as NAIC President.  I know I am a better person for having walked this path with you.   

I leave you in the very good hands of incoming President David Altmaier and our other amazing officers Dean Cameron, Chlora Lindley-Myers, and a soon to be decided Secretary-Treasurer.  Together, we will continue to do great things.