By Preeti Vasishtha
NAIC President Jon Godfread, Nebraska Insurance Commissioner Eric Dunning, Wisconsin Insurance Commissioner Nathan Houdek, and NAIC President-Elect Scott White explore how deepening collaboration with the Academy bolsters regulatory decisions, sharpens risk oversight, and reinforces the vital role of actuaries in today’s insurance landscape.
Editor’s Note: This is the final installment of a two-part interview with several state insurance commissioners. Be sure to read the first part in the July/August issue of Contingencies, in which National Association of Insurance Commissioners (NAIC) leaders share how they are charting the future of insurance in an evolving landscape.
Meet the Commissioners
Jon Godfread is the NAIC president and also serves as the chair of the Government Relations (EX) Leadership Council and vice-chair of the Senior Issues (B) Task Force. He has led the North Dakota Department of Insurance as commissioner since 2016.
Eric Dunning chairs the NAIC’s International Insurance Relations (G) Committee and has been Nebraska’s insurance director since 2021.
Nathan Houdek serves as chair of the Financial Condition (E) Committee. He is the co-chair of the new Risk-Based Capital Model Governance (EX) Task Force, as well as the vice chair of the Governance Committee of the Interstate Insurance Product Regulation Commission. Houdek was appointed Wisconsin’s commissioner of insurance in 2022.
Scott White is the NAIC president-elect and has chaired the Financial Condition (E) Committee, the Long-Term Care Insurance (EX) Task Force, and the Southeast Zone. He is a member of the International Association of Insurance Supervisors (IAIS) Executive Committee, Macroprudential Committee, and Insurance Capital Standard Task Force.
In the second installment of this two-part, wide-ranging interview, Jon Godfread, National Association of Insurance Commissioners (NAIC) president and North Dakota’s insurance commissioner; Eric Dunning, Nebraska Department of Insurance commissioner; Nathan Houdek, Wisconsin insurance commissioner; and Scott White, NAIC president-elect and Virginia State Corporation Commission Bureau of Insurance commissioner discuss how the Academy expertise informs regulatory decision-making and enhances insurance market oversight, while underscoring the trusted, enduring relationship between the two organizations. They also highlight the critical role actuaries play in shaping sound regulatory policy, advancing risk management, and ensuring consumer protection across evolving insurance markets.
How can an organization like the Academy-which provides independent and balanced insight and resources to stakeholders such as its members and the NAIC-better serve the industry and its insurance commissioners?
Godfread: One thing I consistently promote with my team in North Dakota is the utilization of professional development opportunities. The insurance landscape is ever-changing, and staying current with the latest trends and technology can help our industry better serve consumers through stronger and more stable markets.
Stronger collaboration is also key. Creating more opportunities for dialogue between actuaries, regulators, and industry leaders can bridge knowledge gaps and ensure policymaking reflects both technical expertise and real-world market needs.
Above all, the Academy’s greatest value is its commitment to objectivity. One area where the insurance industry excels is assessing risk, largely due to the work of actuaries. It’s difficult to tie numbers up into politics because numbers don’t lie. By continuing to offer clear, fact-based insights, the Academy helps regulators cut through the noise and focus on policies that truly serve consumers and maintain strong markets.
Dunning: The Academy’s focus on serving policyholders through better analysis and better data has been an incredible resource for regulators and policyholders. Continuing that tradition is an important source of strength for both. As we move forward with new artificial intelligence (AI) tools, actuaries will be at the forefront of helping to explain the new resources that the new tools will put at our disposal.
Houdek: The Academy plays an important role by ensuring that actuaries working across all lines of business are well-informed and qualified for their roles. The Academy’s briefs, policy papers, and other publications are important resources for regulators. Our departments of insurance will need reliable, balanced sources of information in the coming years as the industry faces many challenges and emerging risks, and we will look to organizations like the Academy for its insights and guidance.
White: The work done by the Academy is incredibly important to me. It contributes so much to the NAIC’s efforts-work that we rely on and apply both within the organization and in our state-level work. I’d say the Academy really helps fill-or complement-gaps in actuarial expertise in some of the most critical areas we face. And it does so in a way that brings balance and provides insights that stakeholders across the board can trust.
Let me give you an example. One issue I’ve been very involved in-both in Virginia and at the NAIC-is financial solvency. You’re probably familiar with the shift in investment strategies by life insurers over the past decade, much of it driven by private equity ownership and the prolonged low-interest rate environment. That trend has continued even as rates have risen. What we’re now seeing is a move toward more complex, opaque, and illiquid investments-particularly structured products like CLOs (collateralized loan obligations).
This shift has raised a number of questions and highlighted gaps in our current insurer investment framework. One of the major debates we’ve been engaged in concerns how much capital insurers should be required to hold against these structured products in the event of default. These assets are relatively new and materially different from traditional bonds, yet they’ve often been treated similarly when it comes to assigning capital charges.
In response, we’ve launched an ambitious initiative to develop new capital charges specifically for asset-backed securities like CLOs-charges that more accurately reflect the tail risk involved. This is incredibly complex work, and we’ve leaned heavily on the Academy’s expertise. The Academy has earned the trust of regulators and stakeholders alike, and its input has been critical in this very contentious debate, particularly given the high stakes for industry players whose business models are tied to the current capital framework.
What’s been particularly valuable is that no one has questioned the integrity or the quality of the Academy’s work-it’s one less thing we have to worry about as we try to navigate these challenges. We hope to use the Academy’s work not only to inform capital charges for these specific assets, but also as a foundation for evaluating future investment types as new and more complex financial products emerge.
We greatly appreciate the Academy’s role in this process and the value it brings to both current and future regulatory work.
The NAIC is has made significant progress with its AI Governance Framework, to which the Academy provided comments and input. How do you see AI and other evolving technologies shaping the future of insurance? What do you view as the keys risks and opportunities associated with AI?
Godfread: AI and other emerging technologies are significantly transforming the insurance industry, presenting both exciting opportunities and substantial challenges. I am a strong advocate for the responsible use of AI to enhance work efficiency and serve as a safeguard against potential human errors. Overall, AI is making things faster and more efficient. It can help insurers better predict risks, expedite claims processing, and more effectively detect fraud. For consumers, that could mean more personalized policies, quicker responses, and a smoother overall experience.
But with all that potential comes real responsibility. One of the biggest concerns is making sure AI is used fairly. If we’re not careful, algorithms could unintentionally lead to biased decisions in underwriting or claims, which isn’t acceptable. That’s why efforts like the NAIC’s AI Governance Framework matter; they help ensure that AI is used in a way that is transparent, accountable, and puts consumers first.
As regulators, we have to strike the right balance. We want to encourage innovation because it can genuinely improve the industry; however, we also need to ensure that new technologies don’t come at the expense of fairness or consumer protection. It’s all about working together, as regulators, industry leaders, and experts like those at the Academy, to ensure that AI strengthens the insurance market while maintaining fairness and accessibility for everyone.
Dunning: Nebraska was an early adopter of the NAIC AI Governance Framework. I believe it provided a solid structure to approach regulation in a quickly evolving area. As a regulator, and as a close observer of the policymaking space, I’ve been frustrated by challenges getting and analyzing data to help get a handle on the challenges our market faces. AI is going to give us so much leverage to extend the work done by actuaries and others who will help design and evaluate insurance products. We know that there are Americans who have a difficult time accessing the value of insurance. AI has enormous potential to help close those gaps.
Houdek: The NAIC has spent recent years building a regulatory framework consistent with the AI principles. The most recent work product, the AI bulletin, ensures the deployment of novel technologies is consistent with regulator expectations-especially in the context of unfair discrimination. New and emerging technologies can benefit consumers by mitigating potential losses, providing premium discounts, and improving consumer-facing aspects of the insurance life cycle, but those technologies must comply with existing laws and regulations.
The next big project being undertaken by the NAIC, the update to the Insurance Information and Privacy Protection Model Act, addresses the emerging issue of transparency and fairness in the use of consumer data. The NAIC has been measured but responsive in dealing with emerging risks and opportunities of AI and I am confident we, as an organization, can meet the regulatory challenges presented by evolving technologies.
White: I know the Academy was very involved when we were working on the AI bulletin, providing valuable expertise and perspective. I see the actuarial community playing an increasingly important role in every area of this discussion-and that role is only going to grow.
When I explain this to a general audience, I frame it in terms of risk-specifically, the intersection of consumer protection, privacy, and cyber risk. Technological innovation, particularly through machine learning and AI, touches all three. It not only creates new opportunities but also accelerates the areas of concern.
There’s certainly a lot to be excited about-AI is bringing greater efficiency, improved decision-making, and cost reductions. These benefits are especially visible in companies moving away from legacy systems. What AI-powered algorithms can do now-analyzing vast datasets in real time, identifying patterns, making predictions-would’ve been unimaginable just a few years ago. It’s transforming risk management, fraud detection, customer service, and distribution channels.
And we want to encourage all of that innovation. But we also need to be clear-eyed about the risks. One of the biggest concerns we’re facing is the lack of transparency in these models. They’re highly complex and understanding how decisions are made within them can be very difficult.
That’s why reporting is so important-how are the data collected? What kind of data hygiene protocols are in place? How was the model built? We focus more on the process than the output, because we don’t want to be overly prescriptive, but we need to ensure a sound foundation.
A related issue is the use of third-party vendors. This is something we’re very focused on at the NAIC. The lack of transparency becomes a real problem when a company says, “That model was developed by our vendor,” and the vendor, in turn, won’t provide details for proprietary reasons. That’s a significant regulatory challenge. This year, it’s one of the major projects our AI-focused committee is working on.
Then there are the more traditional concerns, like data bias. This has been on our radar for at least five years. These models often rely on historical data-if that data are biased or skewed, there’s a real risk of amplifying or perpetuating existing inequities.
Overarching all of this is the question of how regulators keep pace with the rapid adoption of AI. While some predicted a faster timeline for AI’s impact five years ago, it hasn’t quite moved as quickly as expected. But we know it’s happening-and we know things could change very fast. That’s especially true with the developments in generative AI. So we’re preparing ourselves to be ready for immediate and potentially profound shifts in the regulatory landscape.
Can you talk about your interactions with actuaries, the role they play at the state level, and their contributions to regulatory efforts?
Godfread: Actuaries play a vital role in insurance regulation at the state level. As I previously mentioned, the insurance industry excels at assessing risk, largely due to the contributions of actuaries. Their expertise in risk assessment, pricing, and financial stability helps ensure that insurance markets remain fair, competitive, and solvent. In my role, I rely on my actuaries to provide objective, data-driven insights that guide regulatory decisions, from evaluating rate filings to assessing the financial health of insurers.
One of the most valuable aspects of working with actuaries is their ability to distill complex financial and statistical data into meaningful analysis. Whether we’re reviewing proposed premium changes, stress-testing solvency models, or analyzing emerging risks like climate change or AI-driven underwriting, actuaries help regulators make informed, balanced decisions that protect consumers while maintaining market stability.
Beyond just the numbers, actuaries play a key role in shaping policy. Their work helps us anticipate future challenges, refine regulatory frameworks, and ensure that insurance products are priced fairly and sustainably. Frankly, I encourage my actuaries to shed light on any blind spots I may have when we’re making policy decisions.
Dunning: I have a standing meeting with the senior member of Nebraska’s actuarial team. It is the one meeting I actively look forward to. Getting a handle on how our markets are performing, and talking through the potential consequences on responses, is always fascinating for an insurance nerd like me.
Houdek: In Wisconsin, we do not have dedicated actuary positions at our agency, but we work with several contract actuaries on various projects. For example, our consulting actuary plays a critical role in helping to establish payment parameters for our 1332 State Innovation Waiver reinsurance program, the Wisconsin Healthcare Stability Plan (WIHSP). This actuary team has helped the WIHSP weather the uncertainty of a pandemic, changing federal regulatory approaches, and the Medicaid unwinding to ensure that premiums remain reasonable for individual insurance market plans every year since the program’s inception.
As chair of the NAIC Financial Condition (E) Committee and co-chair of the RBC Model Governance (EX) Task Force, I regularly interact with members of the Academy to discuss important issues relating to risk-based capital and the overall U.S. solvency framework. The Academy continues to be an important partner as we navigate the challenges of the evolving investment landscape and risk assessment of more complex assets and reinsurance transactions.
White: I started my career over 25 years ago as an attorney, and like most attorneys early in their careers, they put you in areas that nobody else wants to do. For me, in Virginia, that meant I was in charge of workers’ compensation hearings. This required me to work with a seasoned actuary to develop testimony and review what’s known as assigned risk rates and loss costs for workers’ compensation-every bit as dry and technical as it sounds. But it was there that I learned invaluable lessons that I carry with me to this day.
Working with that actuary was a formative experience. The rigor he brought to the process was incredible. I had to dive deep into very complex areas of workers’ comp that I wasn’t familiar with, learn them, and then be able to communicate them effectively. This actuary had a unique ability-not only to understand and analyze the data but also to translate it into terms that our judges could grasp. When I put him on the stand, his ability to communicate complex concepts to a lay audience made my job much easier.
That experience taught me a lot about working with actuaries, and since then, I’ve been very comfortable collaborating with them. In Virginia, we use both in-house actuaries and actuarial consultants. They’ve been invaluable, particularly in our long-term care filings. We strive to strike a balance between protecting consumers from rate shocks while ensuring that companies will be financially stable enough to pay claims in the future.
We also have an in-house life actuary who focuses on the asset side of things-specifically, the valuation of assets and their impact on reserves. This is critical in the long-term liability space, where future obligations can span decades.
In the health insurance area, we have a key in-house health actuary, which is crucial given the high-profile nature of the Affordable Care Act market. He carefully reviews assumptions to ensure that companies entering the market are on solid footing.
We’re also increasingly using predictive rate models. While we don’t have a designated P&C actuary in-house, we rely on consultants who have been very helpful in that regard.
At the NAIC, I collaborate with actuaries on financial solvency issues, predictive rate models, and even on international matters, like the development of our group capital standard. Ours is unique-called the aggregation method-and it was developed with input from regulators and actuaries at the NAIC. This work dates to the late ’90s, and to this day, I apply the same level of rigor to complex topics that I learned back in those workers’ compensation filings in the late ’90s.
What strategies do you use to recruit and retain actuaries, and how can the Academy help support these efforts?
Godfread: Recruiting and retaining highly skilled actuaries in the public sector is a persistent challenge, largely due to the competitive salaries and benefits offered by the private sector. However, what we can offer is something just as valuable: meaningful work that directly impacts millions of consumers, along with a strong focus on professional development and work-life balance.
We emphasize the unique role actuaries play in state insurance regulation, where their expertise helps ensure fair pricing, market stability, and consumer protection. This mission-driven work can be a significant draw for professionals seeking a career with purpose.
To compete with private-sector opportunities, we prioritize ongoing education that allows actuaries to expand their expertise and advance in their careers. We also recognize that flexibility and work-life balance are increasingly important factors in job satisfaction.
The Academy can play a key role in supporting these efforts by raising awareness about public-sector career paths, offering training that aligns with regulatory needs, and helping to connect actuaries with opportunities to serve in state insurance departments. By working together, we can cultivate a pipeline of dedicated professionals committed to maintaining robust and equitable insurance markets for the future.
Dunning: I start with pleading. I’ll move on to begging if that doesn’t work. In all seriousness, there are very special people who are called to public service, and particularly actuaries. I’ve been so impressed with Nebraska’s team. My colleagues are here at every stage in their career. Some who are relatively early, taking tests and undergoing the rigor of the credentialing process to those who are further along in their careers. Nebraska is extremely fortunate to have the University of Nebraska Actuarial Science Program just down the street. We’ve had the pleasure of having interns from the program here, and we get to work with others as well.
Houdek: As mentioned above, Wisconsin does not currently have dedicated actuary positions at our agency, but we may consider pursuing position authority in the future. Any change to our agency’s position authority would require approval from both our governor and the state legislature.
White: Yes, we have a strategy for recruiting actuaries, and to your point, to afford them, we generally aim to bring them on at the tail end of their careers when they’re looking for a change. Many of them are at a point where they want to contribute more to society-while that may sound lofty, we do find that it’s often the case. They’re often looking for a second career, and we’ve had success with that approach.
For example, the workers’ comp actuary I mentioned earlier, who trained me on actuarial concepts, was at Oliver Wyman at the time. He’s now our in-house actuary at the Bureau of Insurance, and he’s been with us for years and does an outstanding job. Similarly, our last two health actuaries came from Anthem, our largest health writer in the ACA markets. They were looking for a change, and we were able to bring them on to help review filings from Anthem and other carriers in the individual market.
Our life actuary also came from the private sector, and he’s been with us for 10 years now.
The key for me, once we bring them on, is to keep them engaged. We’ve applied a similar strategy-once they’re on board, we allow them to work on not only the areas they were originally brought in for but also to explore other areas that pique their interest, as long as they have the skill set for it. Actuaries are intellectually curious, and they enjoy exploring different challenges.
For example, the workers’ comp actuary, who was instrumental in helping us with our workers’ comp filings, is now helping us on a national level. He conducted an excellent analysis of the potential subsidization issue regarding carriers who sustain losses from natural catastrophes in one state and whether that impacts Virginia. Our health actuary, meanwhile, has been very involved in our long-term care filings, an area outside of his initial focus. He’s provided fresh perspectives, and we’ve really appreciated his insights.
Finally, our life actuary has taken a leadership role at the national level-he co-chairs the Life Actuarial Working Group at the NAIC, which is driving crucial changes to our investment framework. We’re incredibly proud of the work he’s doing.
So, in summary, the key to retaining these talented professionals is to continuously challenge them and provide opportunities to step outside their comfort zones. All of them seem very satisfied with the work they’re currently doing.
We thank the commissioners for sharing their insights into the evolving challenges and opportunities facing insurance regulation today, and for highlighting the Academy’s role as a trusted partner.
Preeti Vasishtha is editor-in-chief, Contingencies, and the Academy’s director of content.