NAIC Initiates 2023 Budget Approval Process
The National Association of Insurance Commissioners (NAIC) is releasing its proposed 2023 budget, following months of development by NAIC officers, the NAIC Internal Administration (EX1) Subcommittee, the NAIC Executive (EX) Committee, and input from NAIC staff.
"The proposed 2023 budget helps equip the NAIC to better support the nation's chief insurance regulators as they tackle the many challenges facing consumers and the insurance industry," said Chlora Lindley-Myers, NAIC President-Elect and Director of the Missouri Department of Insurance. "This budget recognizes the need for additional staffing resources, as well as a commitment to advance our technology and the modernization of insurance regulation in areas such as innovation, cybersecurity, and standard setting."
The NAIC's proposed 2023 budget includes total revenues (including investment income) of $146.8 million and total expenses of $149.2 million, which represents an 11.0 percent increase and 6.4 percent increase, respectively, from the 2022 budget.
The proposed 2023 budget includes five Fiscal Impact Statements (fiscals):
- SERFF Modernization – 2023 Transition Stages – This project is in its second year of a three-year initiative to improve the SERFF platform. In 2023, users will move by product into the new platform, beginning with the Insurance Compact, followed by life and property/casualty. In 2024, health and plan management will complete the transition. This request includes the addition of two headcount to support transition stages and provide ongoing support. Funding for 2024 will be requested via a fiscal with the 2024 proposed budget.
- Financial Data Repository (FDR) Modernization Phase 1 – FDR supports the loading, processing, and maintenance of insurance company financial statement data. The more than 20-year-old platform has become increasingly difficult to support. This fiscal requests funding for a third-party assessment and consulting to develop new access paths to FDR data tables.
- Regulatory Information Retrieval System (RIRS) Coding Project – RIRS is a common, uniform system to enter and review regulatory actions against insurance producers, companies, and other related entities. This fiscal requests funds to make significant coding revisions to RIRS to identify and enhance system reporting and update a segment of the platform's coding structure.
- 2023 Revenue Enhancements – This fiscal includes two enhancements to NAIC revenue. First, the group cap factor for Database Filing Fees, which has not been adjusted in three decades, will increase from three times the individual company cap to five to address inequalities in fees between large groups and individual filers. Second is a new fee to partially cover the ongoing costs of compiling, reviewing, and analyzing life insurance mortality experience data as required in VM-50 and VM-51 of the Valuation Manual.
- 2023 Staffing Requests – Workload increases related to regulatory support and operational business requirements necessitate the expansion of NAIC staff by 6.5 full-time employees. This fiscal excludes two headcount requested in the SERFF Modernization fiscal.
The proposed 2023 NAIC budget can be found on the NAIC's About Budget page.
Budget Briefing Meeting Details
Proposed NAIC 2023 Budget Briefing with Interested Parties
A budget briefing is scheduled for Thursday, Nov. 3, 2022, at 3:00 p.m. ET/2:00 p.m. CT/1:00 p.m. MT/12:00 p.m. PT. The purpose of this briefing is to provide an overview of the proposed 2023 budget in advance of the November 18, 2022, comment deadline.
Participants must pre-register to participate in this briefing by clicking here. Participants will receive WebEx information upon registration.
A public hearing will be scheduled for late November/early December. Written comments on the proposed budget are due to Jim Woody at email@example.com by November 18, 2022. Details for the public hearing will be posted on the NAIC website as soon as they are available.
About the National Association of Insurance Commissioners
As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.