Leading the Way in Insurance Regulation with Commissioner Jon Godfread

Speaker A: Welcome to Champions and Challengers, discussions on the legal edge of Fintech, hosted by Greg Listini and other attorneys from Bricker Graydon, a full service law firm with more than 200 attorneys with expertise in financial services, insurance and insurance tech law and clients across the country where we feature CEOs, founders, legal advisors and industry professionals exploring business technology, regulatory trends and legal trends that are reshaping the financial services industry.

Speaker B: Welcome to Champions and Challengers, a Fintech legal review. I'm Greg Listini, an attorney practicing in the government relations and insurance regulatory spaces and I lead our regulated industries group at Bricker Graden. Today we are pleased to join be joined by the insurance commissioner for the state of North Dakota, John Godfrey. Welcome.

Speaker C: Thanks for having me.

Speaker B: Um, Commissioner is your second term as commissioner of the great state of North Dakota and I see on your official government website it reads that your first priority is, quote, to safeguard the interests of North Dakota's consumers. It also goes on to state, at the same time, North Dakota's economy and personal security depend on a competitive insurance market to deliver reasonably priced insurance to consumers. My pledge to you is to work diligently to promote a healthy and vibrant marketplace for the good of the consumer, the insurance industry and North Dakota's economy. I wanted to lay that out at the beginning because you've done a lot of work on sort of innovation in this space and that's a lot of what we talk about on this podcast. And so safeguarding that, that consumer interest while, you know, letting companies sort of drive forward in, um, innovation is really a, uh, remarkable task. So thanks for the work you've done first, first and foremost. And um, just uh, really, really happy to be able to talk to you on our podcast today.

Speaker C: Yeah, I'm happy to be here. And I think you touched on some of the points. It's all about balance. It's all about trying to get that balance right. And um, the reality is, and whether we like it or not, we're in the middle of a industry revolution. Yeah. Um, and we're going to look very different, you know, five, six, eight, ten years from now than we do today. And my mantra has been, and I say it to my staff all the time, I say it to the, my other colleagues here is, I just don't want to look back and say we screwed it up. And so, I mean that leads to some, uh, being very judicious in our decisions and kind of, and probably moving a little bit slower than I think everybody would like. But I still think we're moving at the speed of government, which is, um, you know, love it or hate it, I think you need to be judicious. You need to be deliberate with what we're doing, and I think we've done a fairly good job of keeping the ball rolling forward.

Speaker B: Yeah. Yeah. So we're here actually live. I should have mentioned this up front at the naic, uh, spring meeting in Louisville. And so I've had the pleasure of hearing you present a couple times now in different forums. But you're such a good advocate for North Dakota. Tell us a little bit about the state of the industry in North Dakota as we. As we start off here.

Speaker C: Yeah, I mean, well, North Dakota's. We're a real state, and we like it that way for the most part. I think, um, we're certainly growing. We've seen a significant amount of growth over the last decade. Uh, we had a pretty significant oil boom going all. Well, it's probably longer than now, going back to 2009. And so we've seen a significant growth in population for us. Whereas we're a state that's getting younger, um, which is. We're one of the few states in the country that's getting younger. Some may say it's because we couldn't get any older, I don't know. But, uh, but no, we're getting younger, and so we're seeing some diversity in our workforce and our population, and all those are great things. As, uh, far as the insurance market goes, we've got a. We've got a fairly strong and competitive marketplace, save for a few areas I think we struggle in, you know, what's happening in the hardening of our PNC marketplace and how that impacts our energy development industry, how that impacts our ag industry, to be honest. So we've got a number of challenges as well, I think, for the personal insurance and the personal side of the world. We're doing really well. And even mainly commercial, it's when we start dipping into really, the key areas of our economy. Ah, with energy development, with. With agriculture. You know, we're starting to see some. Some warning signs that are giving me some pause. And we've been very. I've been very vocal on those as well. And so, all in all, life is good. We certainly love more domestic insurers. We've got 36.

Speaker B: That's.

Speaker C: That's fairly good, pretty good. A number of those are small, uh, county mutuals. But, um, you know, we're happy with where we're at. We're happy with the growth we've seen. And uh, you know, it's a great place to live and do work and do business.

Speaker B: So, you know, it's funny because I don't think people would compare these two states, but I know from our work in Ohio, a lot of similarities. Right, A lot of similarities in the economy. We had, uh, a shale oil boom there a few years back. And as I mentioned up front, you know, I do a lot of government affairs along with insurance regulatory. You were formerly, uh, vice President, Governmental affairs for the Greater North Dakota Chamber of Commercial. It sounds like, you know, obviously the things you're looking at and keeping an eye on your role there must have influenced kind of how you view your job today.

Speaker C: Yeah, absolutely. I think insurance is one of the unique areas where it literally impacts every sector of the economy. Um, you know, to small businesses, to consumers, to everybody you can think of. Everybody has a need for insurance or has insurance. And so it's one of those areas that really attracted the position is it's going to touch everything. And it's not always the most sexy topic to talk about. It's not always the most amazing, ah, piece. But I'll tell you, it's been a really, really good fit for me. And I think my advocacy on the chamber side has really led well into not only the relationships I've had with our legislators and the political branch in North Dakota, but just that ability to do consensus building, ability to work with others. And that's all been really, really helpful. At the end of the day, again, it's really prepared me, well, I think, to have a broad, uh, I'd say I'm not an expert in much, but I know a lot about everything. Yeah, yeah. So that's really been helpful.

Speaker B: Well, and then you've been very active at naic, obviously over the years. Can you just sort of remind everybody your journey through the organization?

Speaker A: Sure.

Speaker C: So I started off in 2017, was when I was first sworn in, um, elected in 2016. Uh, in that first year, about halfway through the year, the former insurance commissioner from, uh, Michigan, who is the chair of our Innovation Technology Task Force, was stepping down. So I got, I don't know if I was dumb or what, but I raised my hand to kind of help and fill in that spot and so served, uh, as Innovation Technology Chair for a number of years, uh, and did a lot of work on AI principles and different, different kind of again, that technological revolution that we're in. It's really been interesting to me and it's really been fun to be a part of, you know, have been around long enough where I think a, uh, run for officer was. It was a good idea. And so I'm currently the vice president of the organization. So I've been through the Secretary treasury role and will continue on to the chairs if they'll continue to have me. Um, but it's been a really great organization to be a part of. And, you know, I think every. I'm an elected commissioner, so it's a little bit different. My tenure is generally a little bit longer than, say, some of our appointed friends. I think they average about two years. And so North Dakota has a long, long history of having, uh, leadership within the naic. Um, I'll tell you what, I certainly did not anticipate this when I started. Uh, there's, you know, depending on how you handle it, there can be criticism back home of your work at the naic, and if you're gone too much and you can draw some criticism, I think I've done a fairly good job of balancing that so far. So. But when I, when I started, it certainly wasn't saying, oh, I'm going to go be an ASC president, but you get, you, you're part of the organization, you're in here long enough, and you can see just the critical importance that this has for not only our state, but for our other fellow regulators. And leadership's important. Um, and so it's really been a really nice transition into the officer role and not have to. I don't have. I think it's actually gotten better for me because at one point I was the chair of Innovation Technology, the chair of the B Committee, and had a number of different working groups that we're working on. So in some respects, the load's gotten a little bit lighter by being an officer and kind of giving that more global view of it.

Speaker B: Well, and, you know, with all due respect to the size of your state, you kind of have an outsized impact being in leadership in this organization.

Speaker C: Yeah, that's often brought up. Um, and again, I think that it kind of puts us in a unique position too, where we can be a little bit, probably more neutral. Maybe we don't have the huge marketplaces, the market forces maybe that are playing on some of the larger states that may have some issues and maybe be a little bit more controversial. We're probably a little bit more vanilla. Uh, and I think that's probably okay. And again, I think our state has shown, uh, a long history of being able to be that consensus builder and kind of bridge builder between other groups.

Speaker B: Yeah. Now if I'M not mistaken, you help shepherd the task force into the letter committee. Right. And for, for naic, non NAIC nerds, that's, you know, taking it for sort of from a working group to a full blown committee that does, you know, a lot of heavy lifting.

Speaker C: Yeah, I grew up. Yeah. And so it's, you know, we were a task force for a number of years and the reality is this technology pieces wasn't going to go away. And often task force are looked at as kind of temporary, uh, you know, needs based committees and technology, cybersecurity, all the issues around that revolution again, aren't going away anytime soon. And so to be able to grow that up into a full letter committee, which is the first letter committee We've added in 40 some odd years or something like that, uh, I think it shows the commitment that we have as the NAIC to this process, which hopefully helps give some indication to our federal partners and international partners that, hey, this is a serious role for us. We've got a standing committee on it. So, um, when you talk about privacy regulation or technology regulation, you know, we are a state based system, so let us be certainly be at the table, if not defer to us. Uh, and so that was a great, great process. And I'll tell you what, handing that over to Kathleen Brain, who's been the chair for the last two years of the age committee, she's taken it to places that I've never been able to. Um, you know, the collaboration forms that she's doing and the different work that she's doing in that committee have really, really fast paced the setup of the committee. I think we were all anticipating last year kind of being an organizational committee year for the age committee, just to get our feet under us and kind of figure it out. And, um, due to her leadership, we're able to again continue down the road and move some of these processes forward. And she has taken the pure understanding of the technology pieces across our commissioners, uh, who. There's a spectrum, there's an absolute spectrum of folks who want to be engaged with technology, people who are afraid of it or people who really understand it. And she's done a great job of raising that baseline, which has helped the conversation that we have as we talk about what's next. Is there a model bulletin, model law, model regulation? And how do we address these challenges? Um, because it's. Technology is a spectrum for me. Again, the minute you start looking at it, you say, oh God, we got to regulate this thing, we got to do a model law. Yeah, and, and the more you, the more you look into it like, okay, this onion, every time you peel it back, there's another layer, another layer and the tentacles continue to go down. And you know, I think I've gone through that spectrum and I've watched some of my colleagues with that spectrum where you initially see, well, let's just set up a model on it, let's make, you know, let's do it. And you come to realize that we have a pretty sound existing system with our, with the Unfair Trade Practices act, with a number of state based regulations that we have that we don't need to upset the apple cart with technology regulation. This is another tool and you know, AI machine learning, all those are going to be tools that can fit into our regulatory structure. We need to look at it maybe a little bit differently, but the fundamental laws and regulations that we have can adapt to this.

Speaker B: Yeah.

Speaker C: And this isn't the first time the insurance industry has gone through a revolution. I mean we've, we've been around for 150 years. So we've seen the advent of the automobile and the, you know, electricity and all that stuff. So uh, this isn't the first time we've done it and we've looked back on the history of this organization and the ability to weather some of those transitions has been meaningful. And again, the credit goes a lot to the people who were before me that have set this system up. And uh, there is just no need to fully upset the apple card. And I think my colleagues are to understand that.

Speaker B: Yeah, I think. And that's what we hear from um, Commissioner French too in Ohio, you know, Julian, from it before her, they wanted to look at it within the structures that we have. You know, I think it's interesting that you said earlier, you know, maybe move slowly sometimes and too slowly. I obviously interact with a lot of insurance companies and you know, I think the, the view of your work in this space has always been very respectful and you know, I've heard very positive things. That being said, it's, it can be scary. Right. And so what are, you know, this is intended to talk about sort of the nexus of Fintech and the legal implications. You know, what are some of the biggest, big things? Obviously AI machine learning right now, but kind of through the, through the task force, into the committee. What are some of the things that have stood out to you? Uh, as I don't want to say biggest concerns, but you know, kind of the red flags that you saw early on about this area.

Speaker C: Yeah, well, change is hard yeah, that's number one. Right. And we're going through a proof of concept in North Dakota right now on some blockchain technology that has gone really, really well. And so it's a, it's, it's certainly top of mind. But anytime you bring forward a new idea or a new, um, kind of a new innovation, if you will, if it's coming from the companies, it's probably like they're, they're excited about it, right? Yeah. It comes from the regulator. Like, whoa, where is the right. What's the, uh, what's the boogie man? Yeah. What's the boogeyman behind?

Speaker B: What's the gotcha. What are you trying to.

Speaker C: Yeah, And I think that's unfortunate. Right. And I think, you know, I'm hoping that I've set myself a little bit as a, as a. As a willing partner to work on these issues and, you know, deal and deal in honesty and be upfront. You know, I think the difficulty in the insurance industry is there is always that there's always. There is some mistrust between a regulator and the industry. And understand that, fully understand it. I mean, it's a regulated entity. With a regulator, you're going to have some. There's going to be some hesitancy there. But the more we can break that down and the more we can have true and honest discussions without the fear of the heavy hammer of regulation coming behind it that informs a regulator, it helps inform, it helps make good public policy.

Speaker A: Yeah.

Speaker C: And, you know, we've. I think I've done my best to do that. We're probably not perfect on it as far as naic, full regulator body. Um, but the more we can again have those discussions, because the reality is the industry is going to see this stuff way before we do, and they're going to have a better idea of what it looks like. And 98 of the industry, they're good actors.

Speaker B: Yeah.

Speaker C: And we always got to regulate to that lowest common denominator. And so you don't ever want to throw the baby out with a bathwater. And I'm not going. I'll stop using cliches here. But you don't want, you don't want to regulate that lowest common denominator and punish the good actors.

Speaker B: Yeah.

Speaker C: And so we've got to be able to have that open dialogue. And I think we're continuing to try to do that. And so that, that was kind of a surprise to me coming in from the chamber space a little bit, you know, the advocate advocacy world, where I could go to my regulator and be like, okay, here's my problem and let's talk it out. And sitting on the other side of the table, I can understand why there's some hesitancy at times to, to, to issue that because you may not know me, uh, you may know me now, but you may not know me then. And you, you may have a bad experience with another state who did you know. Yeah, we promise we're going to work on this. And also it gets filled up in a marked conduct report or shows up in some other issues. So you know, we've got to continue to work on that. And I also think there's, you know, as new entrants come into this marketplace with insuretechs and fintechs and all those pieces, I think there's some assumption that we are unapproachable and, and there's a fear of actually just reaching out to the office.

Speaker B: Yeah.

Speaker C: And so the naic, uh, through some of the work of the task force, the Innovation Technology task force, set up a state innovation contacts table. Again, really encouraging folks. If you're new to the industry, if you're new to the go, reach out. And if you've got a, if, if you've got a state that you're in or you want to go talk, reach out and use that contact. I'm our state's innovation contact. Yeah, as well. So it's like, it's like I want to have these conversations and I want to have the. Hey, we're just going to spitball here for a minute. This is some new technology we're looking at. What are your thoughts? Yeah, and, and we'll have that in a closed door session. Be like, well, here's some things we're concerned about. Have you thought about this? You know, insurance is a heavily regulated industry. So here's some pieces that we'd look at. Without a formal filing, without a formal process, I mean, I'm as much of a nerd as the next guy. And I love to see this new technology. I'd love to see what's coming forward because at the end of the day, all this technology hopefully will lead to a more engaged consumer, better products available for those consumers. And that's a win for everybody, in my opinion. So if we can get people to be engaged with their insurance policy to understand their policies and really understand how to protect their financial future, I love that.

Speaker B: Right.

Speaker C: That's in technology.

Speaker B: No matter how that, no matter how that's packaged.

Speaker C: Absolutely.

Speaker B: Yeah. Um, so once you get to that formal filing Then you know, sort of what, what is the process, uh, in North Dakota? How do you guys handle those innovative products or companies when they, you know, eventually they gotta file. Right. And so when it comes to that point, what does that look like?

Speaker C: Well, usually hopefully we've had a pre call with them and had a discussion if there's anything new. You know, I, I tell every company that I deal with, I hate surprises. And so the, the less you can me, the better we're all going to be. Even if it's bad news, our clients, that is. Even if it's bad news, I'd rather hear it from you and hear it early. And then we can work, I can work through just about anything if you can tell me up front. But um, so then we, we send it through our traditional filing process and so if we have that pre call, we'll be able to flag with my, with my analyst crew and say okay, this filing is coming through. Yeah, remember we talked about that and remember we made the, made these modifications or we've offered this stuff and there'll still be some back and forth I'm sure between the company and our, and our analysts, but we are very much uh, how to get to yes, state. And it took some time frankly with my staff and my department to get us over the hurdle of if the answer is no, that's fine, but we've got to provide a way to yes and leave that back to the company or leave that back to the industry to say, okay, here's how we think you get to yes. If you don't like that, then it's still going to be no. But we've at least showed you a little bit of what we're looking at, what we need to either see changes to get there. Because again I'll go back. We're a rural state, we're a tech heavy state. Um, our governor right now is, you know, is a tech m. Ah, a tech guy. And so we're pretty open to just about anything. Um, and so I think we're very much how do we get to yes, and it's not always going to work, but it's having those conversations and I think we've been a very, very forthright, very honest group to talk to. And um, not that doesn't mean everything works. I mean there are bad ideas out there and we will let people know when they're bad ideas, but it's certainly not without a conversation.

Speaker B: You have um, sort of visibility on pitfalls or you know, blind spots that companies have, particularly in the legal realm, since we're, you know, doing this sort of as a legal podcast. Things that, that they just don't see that they should think about when they go into this endeavor.

Speaker C: Well, I think the biggest thing is, is, is governance really, honestly, when you look at it. And how do you get to, um, appropriate governance? Um, that's one thing that I certainly look at. And it's gotten better in the industry, but it's still not perfect, you know, especially when you're looking at technology. And I, uh, talk to a company and say, why are you guys using, how you utilize an AI? What are you guys doing? And they say, we're not doing it, we're not doing it. And I'll talk to an analyst from that company, like, oh God, we're doing it here, here, here, here, here. And it's fantastic. Or speed up the claims process and do this. You know, there's a disconnect between the boardrooms and probably the, the staff rooms. Yeah. And, and that is a, that is a major concern. If you can, if you can show that, that, that the, the boardrooms and the, and the C suites are having the full understanding of what technology being used. That gives me a lot of good comfort because there's a significant exposure there for companies that if they're, if they aren't aware of what's going on, you can run down to some pretty bad spaces pretty quickly. Yeah. And then all of a sudden you're in a bit, you're in a big, you're in a big issue. And it gets back to a little bit of how we think we can go about regulating the space. And it's going to rely heavily on governance and rely on those checks and balances. Because for a while we wanted to know every algorithm and every black box and every process. And the reality is that that's impossible for not only for department staff to do, but just functional reality is that when it gets to true full machine learning, that algorithm that we do unpack will have changed by the time we unpack.

Speaker B: That's right.

Speaker C: And so we've got to see the checks and balances. You got to see the processes of. Here's what happens if you get an unexpected outcome. Here's how we're going to cr. Corrected. Here's how we're gonna go back and make it right for the people who were impacted.

Speaker B: Yeah.

Speaker C: And so having those processes in place to be able to show that to the regulator is really important. That's, that's number one. And number two, having the ability to explain the technology. I don't need to know the, the, the coding behind it, but I need to know what the, what, what is your goal with it? What's the end result? What's the hope with this stuff? And I was like, well, we just, uh, it's just really cool. Okay, that's dangerous because you don't understand technology and now you're implementing it on, on a significant book of business. Yeah, that's the other piece that is really, I think, sometimes overlooked is, you know, oftentimes you get into the algorithms and the use of AI and especially as we dip more into the underwriting decisions. You know, this isn't going to be one bad underwriter. This is going to be your entire book of business.

Speaker B: Yeah.

Speaker C: Right. And so the, because it's all leveraged

Speaker B: on that, on that, uh, tip of that pin.

Speaker C: Yeah. And so this exposure risk is so much larger that if you have a bad process that's not going to impact tens of people, maybe hundreds of thousands of people, and that multiplies really, really quickly. And you know, again, as a regulated entity and a regulator, you know, if we get down to that point, it's going to be like, uh, my hands are tied because I've got to now take some significant action against the company. Because you were discriminatory, you did these things. And so it's those pitfalls, I wouldn't necessarily even call them pitfalls. But it's also, I think the newer the entrance you are, the more you've got to. There's insurance is different. We're regulated different. We're not a, uh, you know, we're not a federal entity. We're. We've got the Unfair Trade Practice Act. Learning that and knowing that like the back of your hand is important. And also I think it's, it's been fun to watch through some of these new, new entrants saying, well, we'll just go to the feds and get what we wanted.

Speaker B: Like, good luck.

Speaker C: Hey, good luck. And if, and just be careful what you wish for, because what you go and present, you're not going to get. And you may end up with something that you hate and then you're never going to change it. And so, you know, truly using the states as the laboratories of democracy is, Is I think, important and we're trying to do that. And you know, I think back to the anti rebating law that we updated in North Dakota and went through that process, that was an antiquated law. It was 100 years old and it really was stifling technology growth.

Speaker B: Yep.

Speaker C: We updated it. It didn't. Certainly the sky didn't fall. You know, policies are still effectuated, contracts are still sold. Um, and, and so be able to do some of those things. And, and those are really critical for us as regulators to know. So if there's smart attorneys out there, if there's groups out there say, boy, I don't know why the heck you still do it this way. Or, boy, this law has been around forever and we need to adjust it. We've got an E Commerce working group at the NAIC that, that is dying for those things.

Speaker B: Yeah.

Speaker C: So that's great advice. Continue to stay engaged. And I, I love that kind of information. And north, uh, Dakota is always open to hearing, hey, why don't you change this law? Because it doesn't make sense anymore. And we can go, what, we can modernize. I want to be the first one to do that. Yeah. Um, and so, uh, this is an open invitation to any attorney that you're listening to this, that if you've got issues and you can't seem to get through any other state, give us a try.

Speaker B: Call North Dakota because we're looking for it. I love it. Um, so on AI and machine learning, we had an earlier episode. Anthony Habayev with Monitor. AI talks a lot about testing because to your point, you can't, you can't open up that black box in an efficient way. I mean, are you seeing that? Is there, is there a big component to testing that's involved in the AI machine learning space?

Speaker C: There will be. Um, I, you know, and I'm familiar with Monitor, and they do great work that some of the issues that we're seeing, maybe they're a little bit further along than I haven't talked to them in probably a couple months. But, um, testing is going to be a critical component of these algorithms and these processes. The problem we have right now is we don't know what the score means. So I can send an algorithm through the test and it says I get a one, right? What does that mean? Is that one out of 100? Is it one out of one? Is it one out of, you know, 50,000? So I don't know what that score. We don't have that range yet of what a good algorithm looks like versus a bad algorithm. All this takes time. And I think, you know, you see some states who moved maybe a little bit more forward in the space. I think they're going to run into some of those headwinds of. Okay, now you got to test. Okay, what does testing mean? You know, and what, and how do we do it? And it's again, getting that, that uh, unwrapping the onion. It's just like every layer you go down is like, boy, we, you know, we don't even have a definition for artificial intelligence. Okay, we got that. Now how do we test it? Oh God, I don't, I don't know. Yeah, now we got the score. What does the score mean? I don't know. Are we, are we being unfair? Unfair to certain things is our testing is wrong. And so again, all this is going to take time. It's gonna look, like I said, it's gonna look very different in the next five to eight to ten years. Mhm. And I think we've done a fairly good job so far to setting up the process to be successful. When we get that information that we have. We don't know, we don't know yet it's coming. We've got to be a little bit patient on it. We got to continue to have the guardrails and the fence posts. We're going to get there. And uh, I think again, the value of this, these tools significantly outweigh maybe the uncomfortable gray area we're in right now. Because the reality is, uh, I think everybody wants to have fair products non, um, discriminatory. It's a little tough in a space where insurance is based on discrimination, legal discrimination. But I think we can get to a point where the goal, the Pollyanna's view of this is beyond the more you get to machine learning, the more you get to these pieces, you can remove that human bias out of the equation, which then gives you that true, look at it. And true review. And I think.

Speaker B: And the purest form of the AI.

Speaker C: Exactly. And that's, and that's what the goal is to get to. We're not there yet, but let's make sure we don't screw it up so we, we don't ever get there.

Speaker B: Well, and God love them, in these companies, patience is not, you know, that that's not what they were built on. Right. And so that's a lot to ask and that's a lot for you to try to manage.

Speaker C: Well, sometimes it's better. You know, the old adage is do you want to be first or do you want to be right?

Speaker B: Right.

Speaker C: So it's, it's. But I think again, it goes back to the risk in this space is, uh, we've seen it with the Apple card, the Amazon hiring process. You can number of different Processes that the risk of getting it wrong is significant, too. And so we're hopefully helping set up a space where companies can operate in, but yet feel that there is guardrails there, uh, and kind of see the direction we're heading in.

Speaker B: Yeah. Uh, we didn't have this on the agenda, but you mentioned it earlier, and I heard you present on the blockchain project. It's really interesting. You want to just talk about that for a minute?

Speaker C: Yeah. So data is one of my pet peeves in this industry. Um, I believe that you got to have good data to make good, informed policy to public policy decisions. Um, my legislature asked me all sorts of random questions all the time, and I love it. Um, you know, we got down to. As far as, you know, John, how many homeowners in North Dakota have a daycare liability policy? Wow, that's a great question. I have no idea. And if you want that answer, you have to wait about three to six months at the minimum, because you get asked, they get 20 days to respond to it. Inevitably, that response is wrong. Then I got to. Then I got to go back and tweak that. Probably 10 to 20 days, and then another 20 days to get it back. You got to compile it and aggregate it. And, you know, by that point, they're all in the farm, in the fields and planting, and the legislature is gone. So it's trying to figure that out and get a better response to this. It's also the data process within the industry. We, our companies right now pay to give up their data, have it analyzed, habits, put into the stat reports, and they got to pay to get it back. Yeah, this value chain's flipped on its head. And so, uh, that bothers me a little bit because the values of the data and the. The independent parties that are. That are doing this, they're keeping that data, they're utilizing that data, and then they're making the companies buy it back. Yeah, uh, it would drive me nuts if I'm a company to have to deal with that and then other restrictions that are on top of that. So we've, uh, been fooling around the blockchain for, well, since my entire time as a commissioner and, you know, working with different. Different vendors or different providers of this. And it kind of got to the point where it's like, okay, let's put our money where the mouth is. This is actually going to be a viable technology. So we tried to find a really simple question which is, you know, an uninsured motorist is an issue in our State as well, like every other state, I imagine. And so we asked, can we take the vin, the vehicle identification numbers of in numbers with registrations from DOT and compare them with the bins from insurance companies? Super simple question, does this VIN have insurance? That's the question we're asking. That's the one. That's what we want the answer to. And we took our top 10 carriers in our state and said, we're going to try this. Let's see how it goes. And uh, after some machinations, after some, oh my God, you can't do this. Why, why can't you just do a normal data call, which the industry hates as well. They've often talked to me about, you can't do data calls. They're super time intensive. And they, and they take, we got to take a whole team off another project to do this data call. And then you ask again, you know, is there a better way to do this? And we bring a better way forward. Like, well, can't you just do it the normal way? But all that to say is, you know, after about a year of work, you know, we've been able to produce some results and it's a viable option. Yeah, uh, you know, data and a faster option. Much faster. Yeah. So we've been able to get the results once you get the node set up on the blockchain and kind of go through that process, which if you talk to the technical people in the companies, that's not a hard process to do and they understand the security around it and they understand what goes into it. We're able to get response to these questions in minutes versus months and that's a significant turnaround. And again, it's a very limited data set. It's a very simple data set. To standardize data standards are going to become another big issue that we've got to figure out and standardize that data across the industry, which I, I don't know if I've got the energy to take that on necessarily, but it's, it's going to come, it's going to happen. And so the, the sooner we can get through that stuff and have that conversation again. It's my hope is that this is a better way to access our data. It's a better way to the, for the companies to leverage their data and hopefully it's more cost effective. Yeah, I would love to get to a point where I've got a dashboard and I can look at that's almost in real time and, and say, okay, yep, we've got daycare we've got, you know, 18,000 daycare liabilities in North Dakota. And here's the average premium of that.

Speaker B: And you can get it like that, like that.

Speaker C: And then, and because the reality is we've got legislators, legislatures who are making decisions based on that data.

Speaker B: Right.

Speaker C: The data I've got is 24 months old because that's what's in the Stat report. They're going to make an uninformed decision, and especially in a girl, any of their. Whether, whether you're growing in population or declining population. Two years is a really long time.

Speaker B: Yeah.

Speaker C: And, and I just, I, I'm, I'm afraid we're going to continue where we may make some bad decisions going down the road or miss opportunities because we just didn't have the data.

Speaker B: Well, and with a, with a population that's getting younger, that, you know, there's gonna be new data that is going to help inform your decisions. And the faster you get that, the more, more important.

Speaker C: And I mean, it's. Yes, you're absolutely right. But some of the interesting conversations we've had around this is what about the privacy? What about the. And, and I'd argue again, the blockchain is a more secure avenue because I'm not giving it to a third party. We're not trans. We're not sending over spreadsheets across email. You know, if it's, it's more secure. But it's, it's new technology and not everybody understands it. I would argue I, I maybe understand 10 of it, but I know enough to be dangerous.

Speaker B: And it's really kind of what it was designed to do.

Speaker C: Absolutely.

Speaker B: You're using it for exactly what it was designed.

Speaker C: Absolutely. And so the further, the more we can adapt to this. I, I just believe that'll be a better data chain for everybody involved. Yeah.

Speaker B: So for h. Committee, then what. What do you see as next is there? You know, we talked about AI and machine learning, but what do you see kind of coming down the horizon?

Speaker C: So I think we're going to continue on the principles, kind of implementation of those. I think again, it's going to be much more of a guidance document on how to, how to implement and how to at least recognize that you understand them and they're going forward. And just remember those AI principles were developed three years ago now. Um, and they're essentially, you know, it's almost do no harm. Right. It's make sure you've got your fair, you're accountable, you're transparent, um, you're all the things that you need to be within artificial intelligence. My guess is that looks something like a model bulletin, looks something like a model guidance document. But we're going to continue down that path. But it has been an interesting conversation. Again the spectrum of the commissioners is we've gone from we need a model law and we need it yesterday to okay, now we understand why the principles were there. Like that makes some sense because I don't know how else you regulate it. Now it's like well okay, let's. Can we do an interpretation bulletin and just say here's what we mean, here's what we're looking for in your orsa. Here's what we're looking for as, as you're adapting this technology and, and continue to keep the lines of communication open. You know, I think the companies are coming around, the industry's coming around to have some of those honest conversations with us about hey, here's some issues we're seeing. Yeah. Um, just to make us aware again, I don't think there's a commissioner around that likes a surprise. And so the more we can have those honest conversations the better. And then I also going to see that the H Committee continue to shift onto the data conversation we just had.

Speaker B: Mhm.

Speaker C: Uh, they're going to also continue to focus on um, E Commerce and what that means and making sure that again one of the few good things out of the pandemic was we're able to shift to a virtual paperless, uh, uh, industry effectively overnight and the sky didn't fall. And so we don't need to go backwards and say okay now we need to have wet signatures, we need to do this stuff. And so just really kind of codify a lot of those issues that we kind of resolved during the pandemic and make sure that they maintain going forward. I would also love to get to a point where we get to even more paperless. We're doing opt in for paper. We're doing things like that. Some of that takes federal changes which I don't know. But if we can get to a point where we can do an opt in for your policy documents and things like that, people who want paper can still get paper. My parents would still get paper. But uh, I don't, I don't want it. Yeah, it's, it's wasteful. And so those kind of things around the edges are going to be, continue to be the focus of the E Commerce working group and age committee will continue down the road of I think trying to uh, understand and adapt technology and continue to Use it. I think the blockchain presentation prevents or provides some new, new opportunities to look at. How do we, how do we manage our own internal data at the naic? How do we manage company data? What do we look? What does this look like? And so I think there'll be some, some interesting conversations coming.

Speaker B: I think that piqued a lot of people's interest when you gave that presentation the plug for the E Comm Working Group. Again, how do people reach out? Is that through the NAC website? If they want to, yeah, you can

Speaker C: go to the NASC website. Uh, uh, Troy Downing is one of the chairs of the E Commerce Working group. He's the Montana commissioner. Um, or, you know, really, you can send it to me. You can send. To. Send it to any commissioner, really, if you want. We can get in the right space. But there's, there's contacts on the NAIC website. Kathleen, uh, Breen is the chair of the age committee. She certainly is involved in that. Again, I, we sent out an ask, uh, right at the end of the pandemic, um, just saying, okay, we're coming to the close of the pandemic. What changes you saw during the pandemic that you believe we should maintain? Yeah, we got a good list back. Um, but there's still more work to be done. And so, uh, there are people that know certain sections of the code such a lot probably better than I do. And if something doesn't make sense, let's let it, let's let it look through it. Let's look through it. Let's figure it out. And so, uh, I think that's kind of an open standing invitation that if something doesn't make sense and we need, we can modernize it. We've got a, we've got a task force to do that or working to do that.

Speaker B: That's great. So before we wrap up, we're going to toot your horn for a second. You've been selected as a Rodell Fellow by the Rodell Institute. Um, that's great. Can you tell us a little bit about that and what that means for, you know, the work that you do?

Speaker C: Yeah, it's, it's a, it's a selective leadership development program. Um, every year they pick 24 individuals. So it's, it's 12 Republicans, 12 Democrats to come together and, and really think forward, I think. And, and in today's time, I think when we were getting much more polarized, we're getting much more divisive. You know, these type of things are really meaningful. We had our first meeting. Oh, boy. This summer. No. Right at the beginning of the year. And, um, you know, it was fascinating to sit with, you know, attorney generals from other states or auditors or treasurers or, you know, city commissioners or whatever, all these folks from different walks of life, from different areas of the country, different political stripes. And the reality is we have a lot of similarities. You know, there's so many similarities in here and so many issues that we're trying to work on. We may look at it work, we may look at the solution from a different angle. Sure. But we're trying to solve the same problems. And. And so being able to have those conversations, those connections, um, it's really, really, really impactful. It's been really nice as a. Just kind of a broader scale of what. What we're looking at and what we're moving forward. And it's, you know, it's. It was. It was underneath the Aspen Institute, which is a mere leadership, uh, you know, group is that many people are aware of. They've kind of spun off onto their own now. But, um, you know, there is a lot of. A lot of history behind the Rodell Fellowship, and not, uh, only within that class that you get to meet with those individuals, but it's, uh. You know, the broader Rodell network is. Is really, really important. So it's. It's just. It's a nice opportunity, honestly, I think, to step away from pure insurance regulation, step away from pure politics, and say, okay, we're all effectively leaders around our. Around our. In our communities and our states, where we're at. Where we're at. And. And what issues are you seeing in New York versus what am I seeing in North Dakota? And again, when you boil everything down, it gets very similar, and I think that's critically important in today's society.

Speaker B: So much of what we need today.

Speaker C: Yeah. When you. We can't have those conversations oftentimes.

Speaker B: Yeah.

Speaker C: And. And some of that's driven by the media. Some of that's driven by our own insulation where I sit around the table with my same six friends, and all of a sudden I've got a great idea to the broader public. And it's. You're terrible. We've got to be able to expose ourselves to different ideas and have different conversations with different people to really be able to effectively govern and effectively lead a, uh, lead a nation of our size. And that certainly is influencing. That is impacting that. It's, It's. It's really an honor to be a part of it. That's Great.

Speaker B: That's great. Well, so we got through a whole interview without mentioning your world Guinness Book record. If you want to know more about that, you got to go to his website. How can people find you in the North Dakota department?

Speaker C: It's an insurance dot. Indy.gov.

Speaker A: yeah.

Speaker C: Um, that's our website. Um, we've got a lot of resources on there, a lot of information about us. And the world Guinness record thing was. Was pretty fun. Um, it happened a couple years ago. I didn't know it was a thing until it was a thing. Uh, Brooklyn City Commissioner was named the world's tallest politician. I've got friends all over the country that said, I can't believe they're letting you. This is happening to you. Like, you've got to go take this on. So next thing you know, we're in the middle of a session. The. The media takes advantage of it because they're looking for some. Something to write about other than how terrible everything's going. And, uh, Guinness reaches out and it's. It becomes a whole process. Yeah. Uh, next thing you know, here you go. I'm listed as the world's tallest politician, which is rightfully back in the hands of North Dakota.

Speaker B: There you go.

Speaker C: Right where it belongs. Where it belongs.

Speaker B: Well, thank you so much, Commissioner, for joining us today. We appreciate your time and insights. Um, that's all for today's episode, and thanks to our audience for listening, and we hope you join us again next time.

Speaker A: Thank you for listening to Champions and Challengers, produced by Bricker Graden. Join Greg Listini and other Bricker Graden attorneys for our next podcast covering the latest fintech related legal topics. The views expressed by the participants of this program are their own and do not reflect the views of Bricker Grayton. None of the content included in this podcast is intended to be legal advice and does not create or imply an attorney client relationship.