NAIC Budget

The NAIC's annual budget process is an open and deliberative process among the NAIC members and members of the insurance industry. NAIC budgets have historically offered more disclosure than any nonprofit budget. Throughout the development of the NAIC's budget, there are numerous and rigorous reviews by all levels of management, the NAIC Officers, the Internal Administration (EX1) Subcommittee, and the NAIC Executive Committee. As stated in Article IV of the NAIC Bylaws, the budget is released to the public for comment before final consideration and adoption.

NAIC 2012 Budget Proposal

The National Association of Insurance Commissioners' (NAIC) proposed 2012 budget is now in the approval process, following months of development by NAIC leadership, the Internal Administration Subcommittee, Executive Committee and executive staff.

“The modest increase in the 2012 proposed budget reflects key services that focus on the NAIC’s primary mission of serving our members’ commitment to consumer and solvency protection,” said Kevin M. McCarty, NAIC President-Elect and Florida Insurance Commissioner. “Our investment in technology enhancements, regulatory and policy expertise, and consumer resources will continue to strengthen and enhance our national system of state-based regulation.”

The NAIC 2012 proposed budget includes total revenues of $79.2 million and total expenses of $77.6 million, which represent a 4.99% and 2.52% increase, respectively, from the 2011 budget.

Business and Fiscal Impact Statements proposed for 14 policy and business initiatives at the NAIC include:

1. SERFF Premium Rate Review and Data Collection and Reporting - Cycle II – This proposal seeks approval for enhancements to SERFF to assist states in improving health insurance rate review and reporting.
   
   
2. SERFF Health Insurance Exchange Program Data Collection and Communication – This proposal seeks funding to assist states in establishing health insurance exchanges.
   
   
3. Test and Development Automated Tools Expansion – This proposal seeks approval to expand the licensing and capacity of automated testing development tools used to validate testing and development of all NAIC and NIPR systems.
   
   
4. Security Log Auditing – This proposal seeks approval to purchase hardware and software to gain processing power and capacity to allow for more efficient security auditing of confidential data.
   
   
5. Resource Management Tools – This proposal seeks funding to evaluate, purchase and implement tools to help ensure valuable technology resources are effectively and efficiently allocated to high priority regulatory and revenue generation projects.
   
   
6. Online Securities System – This proposal seeks funding to replace the current Automated Valuation Services (AVS) and Structured Securities systems, due to an increase in the number and complexity of transactions processed through these limited capacity systems and incompatibility issues with current technology.
   
   
7. Supervisory Best Practices Program for Risk-Focused Exams – This proposal seeks funding for travel costs for participating regulators to share knowledge, develop best practices, receive valuable training, and receive feedback from peers in the review of risk-focused exam files.
   
   
8. NAIC State Insurance Regulator Core Competency Education Grant – This proposal requests the establishment of additional NAIC grant funds to provide increased training opportunities for state insurance regulators to develop proficiencies in essential areas.
   
   
9. Integrated Consumer Communications – This proposal seeks funding to increase consumer awareness of services and information available from the NAIC, Insure U, and state insurance departments.
   
   
10. Information Systems FDR Systems Liaison II – This proposal seeks the addition of one full-time resource to provide technical support to the growing FDR, I-SITE, and Market Conduct Annual Statement systems and to support new projects and initiatives that leverage FDR.
    
    
11. Health Solvency Policy Advisor – This proposal seeks the addition of a full-time staff member to help the organization gain added solvency expertise specific to the business of health insurance.
    
    
12. Health Financial Analysis Manager I – This proposal requests funding to hire a full-time position to provide improved ongoing support to financial analysis functions specifically related to health insurance plans.
    
    
13. International Policy and Analysis Manager – This proposal seeks the addition of one full-time international insurance professional necessitated by the increased demand for NAIC participation in the IAIS, increasing international focus on financial stability and supervisory issues.
    
    
14. Capital Markets Analyst III – This proposal seeks funding to add a full-time resource to help fulfill the expanded role of the Capital Markets Bureau in the areas of independent research, analysis, production of Special Reports, regulatory inquiries, committee staff support, and Investment Analysis Report production.

Click HERE to view the NAIC's proposed 2012 budget.

Budget Briefing Details

A budget briefing will be held on November 21, 2011. The purpose of this briefing is to provide an overview of the proposed 2012 budget in advance of the comment deadline of November 28, 2011 and public hearing scheduled for December 6, 2011.

A public hearing is tentatively scheduled for Dec. 6, 2011 at 3:00 p.m. ET, with written comments due by Nov. 28, 2011.

*Please note the 2012 budget proposal includes 332 pages and is set up for duplex printing.

NAIC 2011 Budget

The NAIC adopted its 2011 Budget during a special joint conference call of the Executive and Plenary Committees. The budget includes total revenues of $75.2 million and total expenses of $75.4 million.

Periodically the Executive (EX) Committee and the Internal Administration (EX1) Subcommittee receive funding requests for projects after the annual budget is approved. Generally these projects are of an urgent nature to the NAIC’s annual agenda or its committee structure that were either not known or not solidified at the time the annual budget was prepared. Their impact is fully described as part of the 2011 projections included within the 2012 budget proposal.

Should you have any questions about the NAIC budget, please feel free to contact Carol Hartley, NAIC Senior Controller, at (816) 783-8038.