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 non-profit 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 Proposed 2015 Budget
The National Association of Insurance Commissioners' (NAIC) proposed 2015 budget is now in the approval process, following months of development by NAIC leadership, the Internal Executive (EX) Committee, Administration Subcommittee (EX1) Subcommittee and NAIC staff.
“We’re proud that our 2015 proposed budget demonstrates the NAIC’s continued focus on carefully managing our revenue and expenses while balancing investment in key initiatives that enhance our ability to support our members,” said Monica J. Lindeen, NAIC President-Elect and Montana Commissioner of Securities and Insurance. “The NAIC is committed to protecting insurance consumers and providing our members with the tools and resources they need to effectively regulate companies.”
The NAIC proposed 2015 budget includes total revenues (including investment income) of $94.3 million and total expenses of $96.1 million, which represents a 1.1% and 3.4% increase, respectively, from the 2014 budget.
There are seven Business and Fiscal Impact Statements (fiscals) proposed in the 2015 budget:
State Based Systems (SBS) Software Enhancement and Technology Compliance Initiative — Phase III. This is the third and final phase of a multi-year project to redesign SBS services by updating the architecture and tool set, providing enhanced performance, stability and scalability. This system is scheduled to be implemented in the first half of 2016.
Securities System Rewrite (SSR) – Expanded Phase I. This is expansion of the first phase of a multi-year project to redesign and replace the existing securities system and its components, while incorporating new business processes to support the Securities Valuation Office (SVO), the Capital Markets Bureau (CMB) and the Structured Securities Group (SSG).
SERFF Integration Expansion. This initiative will enhance SERFF licensee/user back office operations by automating the ability to extract product filing information from SERFF, after state review and/or approval for the purpose of enhancing company reporting, tracking and compliance.
State Producer Licensing (SPL) Team Augmentation. This proposal will provide additional support to the SPL team and ensure the products they support can continue to be enhanced and maintained in a timely and cost-efficient manner.
Commercial Mortgage Backed Securities (CMBS) Resource for Structured Securities Group (SSG). The Structured Securities Group (SSG) was formed in mid-2013 and is comprised of three NAIC staff. Currently a full-time consultant monitors and evaluates commercial mortgage-backed securities (CMBS). This fiscal adds a full-time position in place of the consulting expense to expand CMBS monitoring which is critical given the importance of commercial properties in an insurance company’s investment portfolio.
Enhanced Support for Member Use of Electronic Workpapers. This proposal will add a full-time position to provide support to members with their use of tools to conduct solvency and market conduct monitoring activities.
2015 Revenue Modification. This proposal will modify the NAIC’s revenue structure in a number of categories by reducing or eliminating certain fees or assessments.
Click HERE to view the NAIC's proposed 2015 budget.
*Please note the 2015 proposed budget is over 200 pages and is set up for duplex printing.
A public hearing on the NAIC Proposed 2015 budget is scheduled for Wednesday, November 12, 2014 at 3:30 p.m. Eastern/2:30 p.m. Central/1:30 p.m. Mountain/12:30 9.m. Pacific/10:30 a.m. Hawaii time. Please provide any written comments on the proposed budget to Jim Woody at email@example.com by November 4, 2014.
To participate in this call pre-register by following the instructions at http://dpregister.com/10053366. Registered participants will receive their dial in number upon registration.
NAIC 2014 Budget
The NAIC adopted its 2014 Budget the Joint Meeting of the Executive and Plenary Committees at the 2014 Fall National Meeting. The budget includes total revenues of $89.5 million and total expenses of $93.0 million.