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.
The National Association of Insurance Commissioners (NAIC) 2021 budget was approved on Dec. 9, 2020, following months of development by NAIC officers, the NAIC Internal Administration (EX1) Subcommittee, the NAIC Executive (EX) Committee and input from NAIC staff.
“The 2021 budget is aligned to sustain operations and meet the evolving needs of the organization and its members. Ultimately, the NAIC’s goal is to continue to provide members with tools and resources to make a meaningful impact across the insurance sector,” said David Altmaier, NAIC President-Elect and Florida Insurance Commissioner.
The NAIC's 2021 budget includes total revenues (including investment income) of $119.0 million and total expenses of $127.2 million, which represents a 1.1 percent increase and 1.5 percent increase, respectively, from the 2020 budget.
The 2021 budget includes four Fiscal Impact Statements (fiscals):
- Artificial Intelligence and Machine Learning for Financial Analysis – proposes to utilize an external consultant with expertise in AI and predictive analysis to assist NAIC staff in improving the accuracy of the NAIC Scoring System for life and accident & health insurers, which is a key financial analysis solvency tool used by regulators to identify and assess potential financial risks and to prioritize financial surveillance efforts.
- Enterprise Data Asset Management – continues to build-out the new cloud-based Enterprise Data Platform and adds new tools and technologies to modernize the NAIC’s data capabilities in areas such as data movement, data quality, data preparation, and data science. Advanced data users at state insurance departments will gain efficiencies in their data work and gain more powerful insights from their analyses, while less technical users will be empowered to perform some of their own data discovery and analysis.
- MCAS/FDR Separation – due to the growth of MCAS filings from the initial four lines of business in 2014 to nine lines of business in 2021, this project will address the growing complexity of the MCAS system relying on the FDR system. This project will allow the MCAS system to operate independently of the FDR system and reduce work across multiple NAIC departments when setting up annual data validations and MCAS scorecard ratios. Eliminating system dependencies and simplifying internal work processes will provide for more efficient use of NAIC resources to meet the needs of the NAIC Members.
- SERFF Plan Management Enhancements – these updates will streamline processes supporting data collection related to the Patient Protection and Affordable Care Act. The resulting process will require less NAIC staff support and improve data quality as well as simplify the process for insurance companies.
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.
NAIC 2020 Budget
The NAIC adopted its 2020 Budget during the Joint Meeting of the Executive and Plenary Committees at the 2019 Fall National Meeting. The budget includes total revenues of $117.6 million and total expenses of $125.3 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 2020 projections included within the 2021 budget proposal and the 2020 budget shown above includes these additions.
Media queries should be directed to the NAIC Communications Division at 816-783-8909 or email@example.com.