@DOI.
Scott Kipper: This is my third stint as Commissioner in Nevada. I started in late 2008 through mid-2010, then returned again in October 2011 through mid-2015. I began this new term at the beginning of 2023.
I’ve also been the Insurance Administrator in Oregon, which follows the same structure as the Commissioner role within state government. I’ve been Deputy Commissioner in Louisiana following Hurricane Katrina and Hurricane Rita, and I spent a year in Washington as Deputy Commissioner.
My regulatory career began in Wyoming, and early on I worked for two national trade associations as a consultant, selling insurance. My experience is a hodgepodge, but it brings a good perspective in terms of how to best regulate for an organisational structure such as this one.
Our division is located within the Department of Business and Industry, and we have 10 sister agencies – overseeing everything from manufactured housing, to banking, to injured workers.
"If one of our companies was doing business elsewhere, they would pay
the higher of either that state's premium tax."
Scott: Our approach is similar to our sister agencies across the country. Nevada is somewhat unique in that we have a small domiciliary footprint. The reasons for that are many, but most companies that do business in Nevada are domiciled elsewhere, and the few companies that are domiciled in Nevada only do business in the state.
This is mostly due to the reciprocal premium tax; Nevada's is one of the highest in the US. If one of our companies was doing business elsewhere, they would pay the higher of either that state's premium tax or the 3% that's levied in Nevada. It makes them less competitive to do business out of state, which is partly why we have such a small footprint.
Scott: We’re focussed on working collaboratively with other states, because there are many companies doing business here that are domiciled elsewhere. We usually collaborate rather than trying to set the policy ourselves.
Scott: We’ve always had good relations with the carriers doing business in our state. Our approach is to be a partner in making sure the marketplace works. If we keep that in mind, we do well.
"It’s important to be open and collaborative while still
maintaining the stance of a regulator."
For us, the bottom line is what’s best for our consumers in Nevada, so we always favour a collaborative approach. We prefer to make sure that our carriers understand we’re accessible. If there are questions, concerns, or policy issues that arise, we’d rather have the opportunity to air and address them instead of staying in our regulatory bunker and letting them fester.
It’s important to be open and collaborative while still maintaining the stance of a regulator.
Scott: We believe that if carriers or insurers have questions – or they want to be somewhat innovative, for example – they should come talk to us and we’ll hear them out. We have an experienced staff and can approach questions from different sides – not only as a regulator, but also as a collaborator – to ensure the market functions as efficiently as possible.
Scott: Insolvency is at the top of our list. Throughout my career, and for the evolution of regulatory approaches over the last 20 to 25 years, the insurance regulators in the US have done a terrific job in making sure that solvency continues to be job number one.
If I go back 15 years ago to the crisis in 2008, we did a good job of making sure that our consumers were well protected with the solvency approach. It opened a lot of eyes, and it’s a topic that continues to evolve and that our regulatory world is very focused on.
"There's a sense that we are constantly re-evaluating and making sure that
we're doing the most work that we can for our consumers."
There are all kinds of things to consider here: risk solvency, capital allocation, reserving sustainability. All those pieces come into play. There's a sense that we are constantly re-evaluating and making sure that we're doing the most work that we can for our consumers, and that we're most efficient. For instance, the idea of principle-based reserving is one that came out of the 2008 issues.
That's an example of regulators working with industry to make sure that we continue to be the most efficient we can be – allowing companies to be efficient with their capital without impinging on any of these foremost solvency issues.
Scott: It’s not a sensitive topic for us because we have such a small domicile footprint that we work more with those regulators that do have a significant domicile population of carriers. Nevada is in a unique situation, which means that what's important for us is not necessarily as important in other places.
It's not as important for us to be at the forefront of ESG, but we need to be educated and be able to work with our colleagues around the country and to ensure things operate smoothly.
Scott: We have regular discussions with our bank regulator – which is one of our sister agencies here – and they are monitoring the situation. There's a slight concern, but, overall, they're confident that this won’t be as impactful as it has been in the past recessionary rates.
"Our Chief Insurance Examiner talks with her colleagues regularly,
discussing what's going on with trends in the marketplace."
For one, we are doing a much better job of monitoring those portfolios. We rely on the work of the National Association of Insurance Commissioners (NAIC) in the securities valuations office to make sure they're doing their job, too. I'm looking positively at the future, and I don’t think things are going to change that much.
I get the question “Do you guys talk to each other?” about other agencies, states, and federal bodies. Trust me, we do; it’s a regular conversation. Our Chief Insurance Examiner – who is our primary financial overseer – talks with her colleagues regularly as well, discussing what's going on with trends in the marketplace. We’re confident that nothing will sneak up on us.
Scott: From where portfolios and investment levels are monitored, there isn’t a great deal of concern at this point. Our team here does a terrific job of monitoring and looking at not only the obvious – which is the reserves, the surplus, and everything else – but drilling down into what's invested, how it’s been invested, and what’s linked to those investments to ensure that there's a great deal of confidence. If economic conditions worsen, we need to know that insurers would be able to weather the storm.
