Industry the November 2023 issue

In the Hot Seat

Initiated in the firestorm of 2008, NAIC president-elect Andrew Mais has keen insight into the strengths and vulnerabilities of the insurance industry.
By Leslie Werstein Hann Posted on November 1, 2023

But there’s no question that Connecticut insurance commissioner Andrew Mais—president-elect of the National Association of Insurance Commissioners—learned his most potent lessons about insurance regulation in the maelstrom of the financial crisis 15 years ago.

“It was a scary time. There really was not a precedent that you could look back on, and you didn’t know what you would discover the next day,” Mais says. “What it showed was the strength—despite the great stress that was placed on us—of state insurance regulation.”

Though he had more than two decades of experience in marketing, journalism and running a nonprofit, Mais was just two years into his first insurance job at the New York insurance department when he was thrust into the feverish 2008 effort to fashion an unparalleled rescue plan for AIG, whose exposure to risky mortgage-related contracts threatened the entire financial system. As director of public affairs at the insurance department, Mais demonstrated a keen ability to distill complex issues, articulate nascent policies, and craft confident communications in the fog of great uncertainty. In doing so, he delivered a crucial measure of calm amid the chaos.

“That was our Ph.D. in crisis management,” says Maria Filipakis, who served as special counsel to then-New York insurance superintendent Eric Dinallo and is now managing director of Topside Group, a regulatory advisory firm for financial services. “That time in the insurance department really shaped a lot of us in learning how to unravel a complicated issue and what it meant to be a regulator. It most certainly shaped Andy. You see it in the steadiness and the calm that he can bring to a situation.”

My sense is that the NAIC is increasingly divided between red and blue states and their various approaches to hot-button issues. I don’t think it’s an easy job to cross that divide, especially with increasing polarization.
Sen. Matt Lesser, Connecticut’s 9th District

The lessons Mais drew from that experience—as well as his subsequent work with global insurance executives during eight years at Deloitte—have influenced his tenure as the chief regulator in the all-important Connecticut insurance market. Those same lessons will inform his approach to leading the NAIC when he takes the helm in January. Today’s regulators are navigating property insurance markets that are contracting amid raging climate catastrophes; healthcare costs that are spiraling for employers and families; continuing challenges with efforts to increase diversity; and novel technologies that raise privacy concerns and have the potential to perpetuate racial disparities in insurance products and practices.

A leading voice on these critical issues in Connecticut and at the NAIC, Mais is also influential abroad, serving on the International Association of Insurance Supervisors’ executive and macroprudential committees as well as on its Insurance Capital Standards Task Force.

“He’s a strong internationalist who has deep relationships with supervisors across the globe, and I think that’s going to help,” says Kermitt Brooks, chief legal officer at The Guardian Life Insurance Company of America, who worked with Mais at the New York insurance department. “He not only will be able to draw from their good learnings but also make sure that they understand the U.S. regulators’ point of view.”

An idealist with pragmatic tendencies, Mais has no illusions about the limits of his power as president of the NAIC, whose members hail from 56 jurisdictions. But those who have observed his evolution have no doubt Mais will leave an indelible mark on the organization.

“Through his tenure in Connecticut and, frankly, through his first-mover moments, I think he’s garnered a lot of respect from the other states,” says Dinallo, the former New York insurance superintendent who now leads the insurance regulatory practice at Debevoise & Plimpton. “The irony with the NAIC is you have to simultaneously be a consensus maker but also a leader, because someone has to signal that this is the right way to go.”

Mais doesn’t hesitate to speak his mind, and he’s not afraid to disagree, says current NAIC president Chlora Lindley-Myers, director of the Missouri Department of Commerce and Insurance. “But he understands the importance of gaining buy-in from others, because you can’t do it alone.”

On both the national and international regulatory stages, Mais has earned a reputation for entertaining diverse viewpoints, but when push comes to shove, he turns to data to make his case. In this way, Mais has earned the trust of insurance regulators worldwide who might have vastly different opinions from his own about the merits, say, of a particular capital framework.

“Of course, we’re going to disagree on issues, even vehemently at times,” says Massachusetts insurance commissioner Gary Anderson, who counts Mais among his closest friends. “He tries to understand where each person is coming from. Everybody doesn’t do that, and he does that really well. I’ve seen it on both a national level and an international level. It takes patience and time and certainly a little more listening than talking.”

When debates on subjects as Byzantine as international capital regulations get heated and veer off course, Mais can steer them back to the key issues.

“Because Andy is someone who is so steeped in insurance knowledge, when you combine those years of experience with his data-driven, thoughtful approach to problem solving, it creates an environment that if you’re not going to be talking about a data driven approach, then let’s not have the discussion—let’s keep this discussion confined to the data that’s out there,” Anderson says. “And if your argument isn’t good enough, you’d better come up with a better one with better information. When you create an environment like that, you’re pushing aside the elements that can raise the temperature in a room because we all feel so passionately about our own markets.”

Confronting Controversy

Mais is also not afraid to go against the tide at the NAIC. He and his chief actuary, Wanchin Chou, worked ardently to slow NAIC efforts to increase capital requirements for life insurers investing in certain classes of asset-backed securities.

Along with Iowa regulators, Mais and Chou pushed for a more data-driven analysis before making a significant move. They didn’t entirely succeed—the NAIC opted to increase capital requirements for risky tranches of collateralized loan obligations (CLO)—but their persistence led to what groups on both sides of the issue viewed as an acceptable resolution.

“Connecticut was one of the leaders that wanted to make sure that the NAIC would not be increasing capital charges for the sake of increasing capital charges,” says Nassau Financial Group’s CEO, Phil Gass. “Just having that voice was helpful.”

In the nearly five years since Gov. Ned Lamont appointed him to lead Connecticut’s Insurance Department, Mais has confronted hot-button issues with big public airings in some situations and quiet collaboration in others.

“He is very smart and brings a political savvy, in a very positive sense, to the job in Connecticut, which has a large domestic insurance industry but also a number of different legislative pressures,” says Connecticut state senator Matt Lesser, the Democratic deputy majority leader. “The job can be very tricky, and the politics, I think, hurt some of his predecessors. He’s been very effective at threading a needle that’s difficult to thread.

“My sense is that the NAIC is increasingly divided between red and blue states and their various approaches to hot-button issues. I don’t think it’s an easy job to cross that divide, especially with increasing polarization. But if anybody has that skill set, Commissioner Mais does. I am hopeful he can find common ground even when people are looking to pick fights with one another.”

In Connecticut, Mais has taken heat from Republicans and fellow Democrats alike in his measured approach to large rate requests from long-term care insurers and health insurers. Rather than yield to calls for formal, adversarial hearings that can eat up time and money, Mais arranged for public meetings—some four hours long—where insurers explain their rate requests and then regulators, lawmakers, policymakers and consumers get their chance to ask questions and sling verbal arrows.

Less than a year into the job, Mais orchestrated a meeting in which he put Genworth CEO Tom McInerney in the hot seat in a room with fuming policyholders and lawmakers to explain why the largest provider of long-term care insurance needed even more very large rate hikes to sustain underpriced policies that people purchased long ago with the promise of guaranteed renewal and the expectation of stable premiums. Mais ran the meeting like the cable TV public affairs host he once was. In addition to McInerney, Mais invited an outside actuary and a woman who spoke passionately about how an LTC policy provided the resources necessary for her to care for her mother as her Alzheimer’s worsened.

“There are other good insurance commissioners around the country, but I would say Andy is among the most well regarded by his peers and I think by insurance CEOs, like me, who believe he always tries to be transparent and open and considers all sides of the issue,” McInerney says.

Mais notes that, even when he rejects an insurer’s request in favor of a smaller increase, no one is satisfied. “As regulators, we have to walk that tightrope between availability and affordability,” he says. “I will tell you that I certainly have approved rate requests that I was not thrilled with but that I thought were necessary for the company to fulfill its mandate. It’s difficult because it shows the limitation of our power.… I can make sure health insurance companies are spending so much on medical care, but I simply don’t have the ability to lower the cost of healthcare itself. So what do you do? You do everything you can, recognizing there are times when everything you can do will not be enough. And that’s the frustrating part.”

Regulating Technology

Regulators also walk a tightrope when it comes to innovation. Here, Mais stepped out ahead of his peers on one of the most contentious issues of the day: how to regulate insurers’ use of emerging data and technology.

One of Mais’s earliest moves as Connecticut commissioner was to establish an advisory council on technology, and he has been a huge booster for businesses, both established and emerging, that are focused on innovation. He believes such businesses could help close the protection gap.

“This is what I tell all the companies: ‘We’ve got to see new products. We’ve got to see new ideas,’” Mais says. “It’s up to them to figure out what to do, but we will facilitate it. You don’t want a good idea to get lost because the regulatory system is so foreign to them.”

Just up the street from the Connecticut Insurance Department, Nassau Financial Group dedicates a floor of its building to Nassau Re/Imagine, an insurtech and retiretech incubator that provides entrepreneurs with funding and expertise. Mais makes every effort to support Nassau Re/Imagine and his state’s other insurtech organizations.

“I think his involvement has really helped bring another level of gravitas to Connecticut’s insurtech community,” says Nassau’s Gass.

At the same time, he won’t put consumers at stake. When it comes to regulating artificial intelligence, Mais insists carriers take responsibility for risks associated with predictive models that rely upon third-party consumer data and machine learning. He put carriers on notice in 2021 that their use of big data in marketing, distribution, product design, pricing and claims must comply with state and federal anti-discrimination laws. A year later he took a step further, mandating that domestic insurers annually sign a form certifying that they are, indeed, in full compliance.

In a blog post last year, lawyers at Debevoise & Plimpton said the certification requirement “potentially positions Connecticut as the new forerunner in AI insurance regulation in the United States.”

“He has been pretty direct about what his expectations are around getting the industry as front-footed as possible on things like proxy discrimination, artificial intelligence, cyber, etc.,” says Dinallo, who, as New York superintendent, drew Mais into his close circle of policy advisors. “I’m not saying we always agree with him, but he doesn’t leave behind a lot of doubt about where he wants people to be.”

Dinallo is not at all surprised to see Mais moving ahead of many other state regulators on some of the industry’s most vexing issues.

“His expertise and equanimity to regulate during difficult times and to deal with hard questions, like race and insurance, were, in part, forged in the crucible of the financial crisis,” Dinallo says. “We had to be first movers in demonstrating confidence in the system and in the solvency of the companies. He has no trepidation about that. What he experienced during the crisis, I think, very much informed the way he’s been moving on some of these issues.”

Early drafts of the certification requirement caused alarm, but insurers praised Mais’s willingness to listen to their concerns, which ultimately produced a narrower guidance document.

“The commissioner’s opinion was that it’s fine for you to use these third-party data aggregators, but understand that, even if they’re the ones who are providing it, if it somehow has a discriminatory result, that’s on you,” says Eric George, president of the Insurance Association of Connecticut. “He has stuck to his guns, but he’s listened to us. The certification document got to a place where we were able to live with it. But it didn’t start that way.”

To be able to hold insurers’ feet to the fire, Mais integrated data scientists into the insurance department’s actuarial staff to dig through increasingly complex filings. He’s also deploying market conduct exams to check compliance after the fact.

“You can’t take things at face value, and you have to question deeply,” Mais says, citing lessons he learned from his Jesuit education growing up in Jamaica as well as in the regulatory trenches. “We need to verify that what is being presented to us is actually the truth.”

My core mission during my year as president will be to do all I can to close the protection gap.
Commissioner Andrew Mais, Connecticut Insurance Department

A Momentous Transition

When members of the NAIC vote for their 2024 officers at the conclusion of their fall meeting Nov. 30 to Dec. 4, it will mark the beginning of a momentous transition: in January, Lindley-Myers, the first black woman to serve as president of the NAIC, will hand the baton to only the third black man to lead the organization in its 152-year history, and the first in 17 years.

“It still is largely an organization run by white men,” Lindley-Myers says. “Having a different perspective is liberating for the NAIC. Hopefully we will have made a difference in some people’s thoughts going forward.”

Though he’s reluctant to dwell on the negative, Mais has seared into his memory scary situations when he was treated with suspicion and later, at professional meetings, when he was the only black person in a room full of insurance executives.

“I don’t think that would be anything particularly uncommon if you are a black man or a black woman,” says Mais, who immigrated to the United States from Jamaica at age 17. “You have experiences where sometimes you wonder how you got through. You go back to what your parents told you: you have got to be better than everybody else in order to get ahead. So you do that. There are times when you’ve got to bite your tongue and just keep moving.”

Mais finds hope in the recent efforts to reckon with issues of diversity, equity and inclusion (DE&I) in the insurance industry. In Deloitte’s confidential surveys of insurance CFOs, diversity ranked consistently in the top five concerns.

“Even if you don’t necessarily know how to get there, that tells me that, at the very highest levels, people want to get there,” he says. “This is an industry that has traditionally been regarded as pale, male and stale. We need to change that because, if that’s who is in the industry, you are only going to look for solutions that serve that particular group. That doesn’t work. We have a changing society, and the industry must adapt to that change.”

As regulators, Mais says, “we’ve got to keep pushing. Part of our job is evangelizing, and part of our job is holding people accountable. So when we have our meetings…these are the questions we ask: where are you; what’s the plan; how are you going to get there.”

It’s not just insurance companies. The NAIC has been working to help insurance regulatory agencies that have struggled to build a more diverse staff. The Connecticut Insurance Department, Mais says, is reaching beyond traditional sources of talent, including recruiting at historically black colleges.

“We’ve been in the middle of a talent war, so, God bless us, let’s all fight for everyone,” he says. “We can create organizations that reflect our environment, which means we create organizations that people want to be a part of, where people can be their authentic selves. That, I think, is a route to success.”

The NAIC’s focus on diversity shifted into high gear as the nation erupted in protests for racial justice following the death of George Floyd in May 2020. Mais credits former South Carolina insurance director Ray Farmer, the NAIC president at the time, for decisive action initiating the NAIC’s Special Committee on Race and Insurance and elevating its mission to the top of the organization’s agenda.

“I like to say I worship at the altar of Ray Farmer, because what Ray did took courage,” says Mais, the committee’s co-chair. “It’s easy to issue a statement and then let it go with that. After George Floyd, Ray brought us together and said, ‘We have to do something. We know this is an issue that goes way beyond insurance, and we can’t solve it. But we have to solve it for the insurance side.’ I can never give Ray enough praise for that. That’s an example of leadership.”

The Protection Gap

Early on, Mais knew how he would use the NAIC president’s bully pulpit.

“My core mission during my year as president will be to do all I can to close the protection gap,” he says. “It’s not a short-term thing. It’s not going to happen in a year, just like DEI is not going to happen in a year. What you do is bring awareness to it and you see if you can kind of nudge that movement along.”

Swiss Re estimated the global protection gap—defined as the uninsured portion of resources needed to fully mitigate a risk—at $1.8 trillion in premium for 2022, a 20% increase over the 2018 estimate of $1.5 trillion. Its report highlighted key gaps in natural catastrophe insurance, crop insurance, life insurance and health insurance.

The focus on the protection gap taps several veins that fuel Mais’s unapologetic passion for insurance. Mais has a deep well of empathy for people who lack access to resources that can improve their physical and financial well-being and a sense of moral outrage that a disproportionate number of those consumers are people of color and from other marginalized communities.

During the pandemic, he says, “there were people who should have had health insurance—and probably could have had it paying little or nothing through the exchange—who don’t have it. Why not? It’s easy to see the disparities that existed and the underserved populations that either did not have access to healthcare or didn’t trust the system enough to take advantage of the access they had.”

Climate change heightens the stakes for the property insurance protection gap, in which the most economically vulnerable face the greatest risk. It’s a top-of-mind issue in Connecticut, where two thirds of the insured value of property statewide is located along the coast, second only to Florida’s 78%.

“We’ve got our friends in Greenwich who may have a house on the water, and they’ve got insurance, either in the admitted market or elsewhere,” Mais says. “If something happens, they can take care of it. But you also have the person whose family house has been passed down for generations.”

Without a mortgage that requires homeowners and flood coverage, he says, “They’re going to go with what they can afford,” leaving them unable to rebuild after a disaster. “How do we address that? … It’s partly on us regulators to say we are going to do what we can to encourage coverage everywhere, to keep that vibrant market going.”

If his empathy drives his interest in the problem, Mais’s zeal for creative problem-solving animates his search for solutions. He views education as a key component in closing the protection gap, but he believes regulators should also push carriers to develop new products and ensure the regulatory process is nimble enough to accommodate them. He cites a pilot program developed by Swiss Re and Guy Carpenter to help low- and moderate-income neighborhoods that are prone to flooding. Under the program, payouts from a parametric insurance policy triggered by rainfall and storm surge events fund emergency cash grants that the Center for NYC Neighborhoods distributes to eligible residents.

“We need to be able to look at who are the people who have insurance and who are the people who don’t and to try to figure out how to get it to them,” Mais says. “Given the way the insurance system is structured, innovation is absolutely necessary in order for us to reach a greater portion of the populace with more relevant products and to have those products be as affordable as possible.”

Mais also sees promise in insurers’ growing focus on embedding risk mitigation into the risk transfer business. He cites a litany of examples: cyber insurers that teach businesses how to harden their systems, vehicle telematics programs that promote safe driving, property insurance discounts for buildings made more resilient, and long-term care insurance policies that provide the kind of care that enables the elderly to stay in their own homes.

“That’s the kind of thing that really excites me,” Mais says. “That’s where I think, in general, insurance should be moving to.”

Mais might want to be careful what he asks for. His health plan with the state of Connecticut offers reduced premiums to members who commit to preventive screenings and treatments for chronic illnesses. “They offer you this diet, which is absolutely horrible,” he says, laughing. “I can’t eat bread. I can’t touch sugar. But it works. It’s mitigating the risk.”

Fierce State Advocate

Mais believes that regulation should reflect the needs of the individual communities it serves, and in that, he is a fierce advocate for state-based regulation and supports the development of model acts. In comments on a draft of the NAIC model on consumer privacy, The Council of Insurance Agents & Brokers lamented the unnecessary complexity it would add, if adopted by states, to the existing web of state and federal privacy requirements.

The states “are in the best position to see which regulations work best for our industry and our consumers and how those regulations should be structured,” Mais says. “There could be one-size-fits-all federal government standards that don’t necessarily reflect the needs of a particular community. We want to make sure our communities are protected. We want to make sure that our agents and brokers are protected. And that’s what we as insurance regulators understand that somebody at the federal level may not necessarily be able to understand or be interested in understanding.”

Ultimately, Mais takes an optimistic yet pragmatic approach. “I believe that we are the keepers of our brothers and sisters, and I believe we should leave this place better than we found it,” he says. “You do the best you can every day. You realize you’re not always going to succeed. You realize there are going to be times you need to adapt. You realize there are times you are going to have to compromise. But you keep your eyes on the prize, and you keep pushing towards that goal.”

Born in Jamaica 64 years ago, Andrew Mais was a teenager attending high school at St. George’s College, a public Catholic school in Kingston, when his mother, Iris, brought him and his sister to the United States while his father stayed behind.

They lived first with family in New York City, before moving to Stamford, Connecticut. Mais’s 93-year-old mother, whom he describes as “the mother who fathered me,” now lives with him and Susan, his wife of 39 years, in Wilton, Connecticut.

After coming to the United States, Mais was tempted to continue his Jesuit schooling. After all, Father Andrew McFadden, a leader at St. George’s whom Mais greatly admired, was vice president at the College of the Holy Cross in nearby Worcester, Massachusetts. But then came the offers from Harvard and Yale. A message from Yale’s then-president Kingman Brewster Jr., which Mais can still recite, sealed the deal. It concludes, “You probably have not been as free before. You may not be as free again. Enjoy the privilege of doubt. Make the most of it.”

Mais dropped his initial plans to study pre-med and majored in organizational behavior. Always curious and a terrific writer, Mais had a strong interest in journalism, working summers in college at the Stamford Advocate, where he met Susan.

After a dozen years in corporate marketing, Mais returned to newspapers before running a nonprofit focused on volunteerism. When he was thinking about his next challenge, a friend who started working at New York’s insurance department suggested he apply. Mais had the standard reaction when broached with the prospect of a career in insurance.

“I’m like, ‘You’ve gotta be out of your freakin’ mind,’” Mais recalled. “I’m glad he was persuasive. I’ve been fascinated by the field ever since.”

Until he became commissioner, Mais’s career afforded him the opportunity to travel the world with his family—boating down the Mekong River in Vietnam, climbing Egyptian pyramids, and exploring Greece, Turkey, Morocco and Israel.

Many of these trips also included his mother and his mother-in-law, who has since passed away. By the time his daughter, Jennifer, was a teenager, her passport was stamped 37 times.

Friends describe Mais as a devoted family man and the quintessential “girl dad.” At Jennifer’s wedding last year, he told the gathered friends and family that if he were ever to write a business book it would be titled “Lessons I Learned from My Daughter.”

One such lesson stemmed from the time she came crying to him with her latest experience of teenage angst and heartbreak. “Of course, I had to tell her how to fix it, but she very politely looked at me and told me, ‘Dad, shut up and listen,’” Mais says. “And that is advice I have taken ever since.”

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