NAIC Adopts 2009 Operating Budget

Members of the National Association of Insurance Commissioners (NAIC) have adopted the 2009 operating budget.

“We have crafted a 2009 budget that allows us to increase our support of member initiatives and state participation in NAIC activities,” said NAIC President-Elect and New Hampshire Insurance Commissioner Roger Sevigny. “In doing so, we are keeping our commitment to protect policyholders and ensure strict regulatory oversight of the insurance industry."

NAIC resources are continually evaluated and aligned with important and priority membership services, products, systems and data that serve as the backbone of a complex variety of state insurance regulatory programs and tools.

The 2009 budget proposes revenues and expenses of $73.1 million and $70.7 million, respectively, forecasting revenue growth of 7.1%. The NAIC’s expense budget is projected to grow by 6.3%, largely indicative of the NAIC’s continued investment in membership services and proposal supporting the membership’s strategic initiatives.

New initiatives include:

• Continued investment in the State Producer Licensing Reengineering project, representing consulting resources and one full-time employee.
• Allocation of NAIC resources to the Market Conduct Annual Statement proposal to (1) prepare and support the existing MCAS process (updating it to collect 2008 data filed in 2009); (2) enable the collection of data submitted by states to the NAIC; and (3) automate the aggregation of data for limited analysis and the creation of national ratios and averages by the NAIC, which is still subject to discussion by the NAIC membership in the coming months.
• A proof-of-concept proposal to evaluate the scope, timeline and potential costs of leveraging the Florida Office of Insurance Regulation’s Public Hurricane Risk and Loss Model in order to build a national multi-peril model administered by the NAIC for use by states potentially affected by natural catastrophes.
• The addition of one full-time employee to support of the NAIC’s goals and priorities in the work of the International Association of Insurance Supervisors (IAIS).

NAIC staff began working on the budget in May and formally presented it to the membership in September. A public hearing was held in November to provide insurance trade associations and consumer representatives, as well as NAIC members, an opportunity to provide comments.

For more information about the NAIC budget, visit www.naic.org/about_budget.htm.