BISMARCK, N.D. – Insurance Commissioner Jon Godfread, along with five other Insurance Department employees, joined insurance regulators from across the U.S. earlier this month for the National Association of Insurance Commissioners (NAIC) spring meeting in Denver. Godfread was one of 12 new commissioners welcomed at the event.
“It is crucial for the Department to be well-represented at events like the ones hosted by NAIC because these meetings test and hone our current abilities, while allowing us to learn and apply new skills and processes that are good for the Department, and even better for North Dakotans,” Godfread said. “They also provide us with an opportunity to work together with our counterparts from other states, along with our domestics and companies that are interested in bringing new products like peer-to-peer insurance to our great state.”
The NAIC is the U.S. standard-setting and regulatory support organization created and 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 review, and coordinate their regulatory oversight.
Attended by more than 2,000 individuals, the NAIC spring meeting agenda included speakers, committee and task force meetings, and forums for discussion on all areas of the insurance industry and regulation. The NAIC released its 2016 Annual Report outlining the financial health of the organization and highlighting the progress regulators have achieved in providing consumer safeguards and ensuring the success of insurance markets. The document, titled “Inspiring Innovation,” illustrates the importance of continually strengthening the vitality and stability of the insurance regulatory system with new initiatives and by exploring developing technologies.
The success of the NAIC’s Life Insurance Policy Locator, a program created to help find a deceased person’s life insurance policies and annuities, was also announced at the meeting. In just six months, the policy locator has matched nearly 1,800 beneficiaries nationwide with lost or misplaced life insurance policies or annuities, totaling more than $17 million returned to consumers, as of April 1. In North Dakota, 26 requests have been made via the Policy Locator with three matches having been made, however, no claim total has been reported. Visit www.nd.gov/ndins to access the Life Insurance Policy Locator.
The meeting also highlighted topics of growing importance like understanding usage-based insurance (UBI). UBI, also known as telematics, works by tracking driving behavior through devices installed in a vehicle or through smart phones and transporting that data in real time back to insurers. The devices can measure miles driven, time of day, where the vehicle is driven, rapid acceleration, hard braking, hard cornering and air bag deployment, among other things. The data collected is then used by the insurer to help determine premiums. By the end of 2018, it’s estimated that 80 percent of new cars in the U.S. will be equipped with on-board telematics devices and by 2020, 70 percent of all auto insurers will use telematics. This technology shift suggests UBI may become the most common way to determine auto insurance premiums.
Finally, the spring meeting introduced a greater focus on innovation and technology, featuring the official launch of the Innovation and Technology Task Force. The purpose of the task force is to provide a forum for regulator education and discussion of innovation and technology in the insurance sector, to monitor technology developments that impact the state insurance regulatory framework, and to develop regulatory guidance. Commissioner Godfread represented North Dakota on the 27-member task force.
“I am excited to be a part of this new task force,” Godfread said. “Innovation and technology have the potential to positively transform the insurance market and I am pleased that I will have the opportunity to take a leading role in overseeing these products as they make their way to North Dakota’s insurance market.”
NAIC conferences are conducted at the expense of the NAIC and funding is provided to states to offset the cost of employee travel.