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 a high level of disclosure for a nonprofit budget. Throughout the development of the NAIC's budget, there are numerous and detailed reviews by all levels of management, the NAIC Officers, the NAIC Executive (EX) Committee, and the Internal Administration (EX1) Subcommittee. As stated in Article IV of the NAIC Bylaws, the budget is released to the public for comment before final consideration and adoption.

NAIC 2017 Budget

The National Association of Insurance Commissioners (NAIC) 2017 budget was approved on Dec. 13, 2016, following a lengthy internal vetting process involving NAIC officers, the NAIC Internal Administration (EX1) Subcommittee, the NAIC Executive (EX) Committee and NAIC staff.

"Over the past two years the NAIC has made substantial investments in technology initiatives, including cybersecurity, which is consistent with the organization's goal of providing high-quality services to state insurance regulators, consumers and insurance industry users," said Ted Nickel, NAIC President-Elect and Wisconsin Insurance Commissioner. "In 2017 the NAIC will finish implementing a number of enhancements born out of these recent investments. This budget prudently manages expenses while providing reasonable funding to continue the organization's support of state regulators in their goal to protect consumers and ensure a solvent insurance industry."

The NAIC's 2017 budget includes total revenues (including investment income) of $101.9 million and total expenses of $102.1 million, which represents a 4.4 percent increase and 0.4 percent decrease respectively, from the 2016 budget.

The 2017 budget includes six Fiscal Impact Statements (fiscals):

  1. Regulatory Data Collection – Phase II – This fiscal requests funding to establish a flexible, responsive data collection framework at the NAIC. The first initiative for which the framework will be used is Principle-Based Reserving (PBR).

  2. System for Electronic Rate and Form Filing (SERFF) Integration Expansion – Phase II – This request expands SERFF Integration Services (SIS) to allow industry customers to retrieve additional data and attachments from SERFF and to send updates back to SERFF, making two-way integration available. This initiative will improve speed to market for insurance products as the automation provided will reduce errors, eliminate duplicate data entry and help insurers get timely products into the hands of insurance consumers.

  3. Online Content Management System (CMS) – Traffic on the NAIC's website has grown from 40,000 unique users in 2006 to 2 million in 2016. This fiscal requests funding for a tool and the implementation of processes and procedures to streamline the creation, approval, security and deployment of content as well as improve navigation, accessibility and usability of content.

  4. Information Technology Infrastructure Library (ITIL) Adoption – Phase II – This is the second phase of an initiative to enhance existing technology with a new tool to improve change and incident management processes. Centralized tracking of changes to the NAIC technology environment benefits cybersecurity efforts and strengthens NAIC's position for audits and certifications. Enhancements in this area will help prevent system outages/issues or provide swifter resolution to system outages/issues when they occur.

  5. Job Scheduler –This fiscal requests funding for the purchase of an off-the-shelf job scheduler tool, which will improve availability, reliability and performance of NAIC applications and promote greater uniformity across internally developed systems.

  6. Recalibration of Database Filing Fee Structure – A simplified database filing fee structure is proposed in this fiscal. Approximately 70 percent of filers will experience no change or a reduction in fees paid compared to the current structure. The recalibration will reduce the disparity of fees while more equitably distributing funding of major investments in important insurance regulatory initiatives, NAIC systems and technology infrastructure, which benefit state insurance regulators, consumers and the insurance industry.

A fee calculator is available for insurance companies interested in determining their 2017 database filing fee using the formulaic approach.

The NAIC's 2017 budget.
*The budget is over 200 pages and is set up for duplex printing.

NAIC 2017 Budget

The NAIC adopted its 2017 Budget during the Joint Meeting of the Executive and Plenary Committees at the 2016 Fall National Meeting. The budget includes total revenues of $101.9 million and total expenses of $102.1 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 2017 projections included within the 2018 budget proposal.

Should you have any questions about the NAIC budget, please feel free to contact Jim Woody, Chief Financial Officer at (816) 783-8015 or Carol Thompson, Senior Controller at (816) 783-8038.