Today's Department for Tomorrow's Industry

Insurors CEO Ron Travis discusses the role of agents with Commissioner Lawrence as the group listens

Insurors Sits Down with Insurance Commissioner Lawrence and the TDCI

Insurors recently had the opportunity to sit down with Commissioner Carter Lawrence, J.D., MBA and several key members of his team at the Tennessee Department of Commerce and Insurance (TDCI). Among those participating were Bill Huddleston - Assistant Commissioner of Insurance, Jim Tracy - Senior Advisor to the Department, Chris Burger - Chief Strategy Officer, Toby Compton - Deputy Commissioner of Insurance, Patrick Merkel - Director of Insurance and Alex Lewis - Assistant Commissioner.

We are excited to work with you all and especially with everyone in their new roles. How well do you feel the Department is now positioned to regulate the insurance industry?

Commissioner Lawrence: First of all, let me say how humbled and honored I am for the opportunity to be appointed by Governor Lee to this position of Commissioner. As someone who has been at the Department for five years – I can confidently say our entire team is incredibly well-positioned to continue to regulate the insurance industry and serve all of our customers and stakeholders. Throughout my tenure at the Department we’ve continually focused on our mission, vision and values.

Our Department is committed to fostering fair marketplaces, public safety and consumer education that promote the success of individuals and businesses while serving as innovative leaders. We are also focused on protecting Tennesseans through balanced oversight of insurance and regulated professions while enhancing consumer advocacy, education and public safety. In all that we do, we have a strong focus on customer service excellence, strategic decision making, inclusive environment, transparent/efficient government and principled actions.

In your opinion, what role do trade associations have in the regulatory process?

Commissioner Lawrence: Trade associations play an important role in representing their members and pooling their expertise and contacts. We know that we cannot get 400 different agency contacts in a room at one time to discuss issues and provide information, but Insurors can serve as a conduit with the Department to accomplish these goals.

In your opinion, how important is the role of insurance agents in helping consumers properly cover their risks?

Commissioner Lawrence: The role insurance agents play in helping consumers properly cover their risks is vital. I believe it’s important for agents to schedule time to sit down – or especially during the COVID-19 pandemic to meet virtually – with consumers to review their policies and to help make sure their insurance coverage is still appropriate and that they are prepared for potential risks.

Tracy: They're extremely important. As a former agent I know how crucial it is to have someone guide consumers on what they really need and what they may not. Whether it is reviewing coverages with insureds, helping a client understand a

risk or walking them through a claim, agents play a critical role in this system.

Are there upcoming bills of interest from the Department that our agents should know about?

Commissioner Lawrence: Bills that were pending last year are certainly coming to the forefront again. Some issues we are focused on for the future are credit for reinsurance, healthcare liability reform and the Modernization Act.

Lewis: Two key items of interest for us are Cyber Security Legislation, which is directed at the insurance industry and modeled from the NAIC cyber security model legislation; and – as the Commissioner alluded to – the Modernization Act, which makes several technical corrections but also provides some updates related to reinsurance, captive insurance and removes "service of process" on carriers through the Department.

What is the outlook on the insurance industry in Tennessee for the next few years?

Commissioner Lawrence: We expect to see continued growth in the insurance industry in Tennessee, including growth in the number of carriers doing business here and in premium amount written. Some facts and figures to highlight:

• Over $45 billion in insurance premiums are written in

Tennessee each year by over 1,900 licensed insurance companies. • In 2020, the Division licensed 23,155 additional insurance producers, bringing the total number of insurance agents to 225,647. • In 2020, 55 insurance companies were newly licensed in

Tennessee bringing the total active number to 1,907. • Since January 1, 2019, Tennessee has added seven new domiciled insurance companies. • For Captives: In 2020, Tennessee had 212 licensed captive insurance companies and 508 approved cell companies for a total of 720 risk-bearing entities (RBEs) compared to 652 RBEs at the end of 2019.

Do you feel the strength of the Tennessee economy through this pandemic will help make for a “faster” recovery for businesses and consumers after it is over?

Commissioner Lawrence: Yes. First, I want to commend Governor Lee’s leadership throughout the pandemic – being focused on both lives and livelihood. His leadership with the Economic Recovery Group – on which I serve, and his stewardship of state and taxpayer resources have Tennessee being one of the top states in the country for economic recovery. In addition, Tennessee’s diverse economy – agriculture, commerce (manufacturing, technology, logistics, healthcare) and other facets – will aid in a “faster” recovery. Other variables to consider are: • Tennessee is more diverse in industry than many other states. • Tennessee’s continued business friendly environment and population growth will help aid in our economic recovery. • Tennesseans are moving here with jobs, bringing with them money and the need for insurance. • Expected continued growth in our state and our economy. • The role of insurance in economic development projects.

Do you believe we are one of the best states in the country for insurance regulation? If not, how can we get there?

Commissioner Lawrence: Yes, we are one of the best states for insurance regulation. We recently underwent accreditation review by the NAIC and received great accreditation results, including a statement that indicated Tennessee is above the expected normal operation of a regulator. Some of the achievements we are proud of are:

• Receiving positive feedback from the NAIC examiners while expecting a full five-year accreditation with no rereviews – which is the best result we could receive. • We are always looking at ways to maintain and improve our business-friendly environment, balanced oversight and consumer advocacy including ways to further embrace innovation, technology and new ways of doing insurance business in Tennessee. • According to NAIC – we run the leanest and most efficient insurance department in the country.

If our members need help from the Department, how should they make contact?

Huddleston: Members who need assistance from the Department can contact the agent licensing section of the Division and members can reach out to them at 1.888.416.0868 or 615.741.2693. Kim Biggs is the director of the Section and does an excellent job.

Also, for any Tennessee consumer who believes they have been wrongfully denied a claim by their insurance company or have another issue with an insurance agent or carrier, consumers can file a complaint online and learn about other ways to file complaints, including by mail or phone, at https:// www.tn.gov/commerce/insurance/consumer-resources/filea-complaint. Please note that the insurance policy must have been written in Tennessee.

For Jim Tracy – Can you tell us about what your role will with the Department will be as Senior Advisor? How will you career experience as an insurance agent impact that role?

Tracy: I am bringing experience in the insurance industry to practice as we look at legislation, regulation and how it af-

With my background as a small business owner, I know how many dynamic items affect small business owners. My experience in public service, including 13 years in the State Senate, brings a career of relationships, experience and legislative know how in order to be an asset to the Department.

My knowledge gained being involved in the insurance industry from the ground up, from the agents’ point of view and also how items affect small businesses, policyholders and others.

For Bill Huddleston – How do you envision directing the insurance side of the Department? What or who influences your role as a regulator and impacts your decision making?

Huddleston: The Division has a history of strong and responsive leadership. I envision carrying on in the same manner, directing the Division to focus on consumer protection while maintaining a balanced look at solvency and market conduct. We want to maintain an environment that is robust with insurance options and that allows consumers free choice in an open market.

Governor Lee, Commissioner Lawrence and other members of the Tennessee Insurance team influence my role as a regulator and inform my decision making. In addition, experience and ideas of other regulators across states and the NAIC will continue to be helpful as we examine and implement lessons learned and best practices.

We are committed to best in class customer service, stakeholder engagement, ensuring a business-friendly environment and balanced oversight.

For Chris Burger – How is the TDCI getting their message out to consumers?

Burger: The Department continues to be proactive in our messaging to stakeholders directly and via traditional and social media. Recently, we have highlighted the importance of insurance during the anniversaries of the Nashville Flood and the tornadoes, along with a variety of other messages about the importance of being properly insured and regularly reviewing your insurance policies. We want consumers to be more aware and take better precautions for their risks. And, we know agents play an important role in consumers being properly insured and covering their risks before an insurable event occurs.

For Patrick Merkel – What else do our members need to know?

Merkel: We are all here to help however we can. Bring your questions to us and we will get you the answer and do it with a smile.