The National Association of Insurance Commissioners' (NAIC) proposed 2011 budget began the approval process today, following months of development by NAIC leadership, Internal Administration Subcommittee, Executive Committee and executive staff.
"The 2011 proposed budget reflects our primary commitment to serving members in their protection of consumers and maintaining a solvent industry," said Susan E. Voss, NAIC President-Elect and Iowa Insurance Commissioner. "The proposal includes important investments in NAIC services to the membership and regulated industry. The value of these services is exponential compared to the annual NAIC budget, which represents less than .005% of annual industry premium."
The NAIC budget includes total revenues of $75.2 million and total expenses of $75.4 million, which represent a 1.6% and 5.3% increase, respectively, from the 2010 budget.
Business and Fiscal Impact Statements are being proposed for eight policy and business initiatives at the NAIC, including:
• Records Management Initiative – This proposal seeks to ensure the NAIC is effectively managing its corporate records policy and retention requirements.
• Application Development and Testing Environment Expansion – This proposal seeks capital hardware and software expenditures to purchase the necessary technical infrastructure to improve the existing quality assurance testing environment for NAIC and NIPR software and database applications.
• SBS Maintenance and Staffing Strategy – This proposal requests the addition of eight full-time employees in early 2011 in an effort to establish the appropriate staffing level on the SBS Team to reduce the NAIC's future reliance on consulting resources.
• SBS Growth Strategy – This proposal requests the addition of six full-time employees to supplement the SBS Team in order to implement a series of short-term initiatives aimed at improving the overall effectiveness of the system and increasing user satisfaction, through the redesign of external interfaces and support of additional state implementation projects.
• SERFF Premium Rate Review Data Collection and Reporting Enhancements – This proposal seeks funding for enhancements to the data collection and reporting functionality of the SERFF system, in response to requirements arising from the Patient Protection and Affordable Care Act (PPACA) and specifications under development by the Department of Health and Human Services.
• NAIC Messaging Administrator – This proposal seeks an additional part-time employee to support the growing demands of NAIC messaging systems and communications.
• Impact Study of VM-20 Principle-Based Approach to Valuations – Sponsored by the Principles-Based Reserving Working Group, this proposal supports the study of the impact of proposed valuation methodology changes within the recently NAIC-adopted Standard Valuation Law.
• SBS Consumer Assistance Data Collection and Reporting Enhancements – This proposal seeks funding to support enhancements to SBS, in order to accommodate the data collection and reporting requirements arising from the PPACA to establish, expand, or provide support for the establishment of consumer assistance or ombudsmen programs.