WASHINGTON, D.C. (Oct. 8, 2019) — The National Association of Insurance Commissioners (NAIC) is releasing its proposed 2020 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 2020 budget reflects the commitment of our membership to enhancing the services and operations our members rely on, as articulated in the State Ahead strategic plan,” said Raymond G. Farmer, NAIC President-Elect and South Carolina Director of Insurance. "The pace of change in technology in the insurance sector requires enhanced tools, and our budget takes these needs into account.”
The NAIC's proposed 2020 budget includes total revenues (including investment income) of $117.6 million and total expenses of $124.5 million, which represents a 6.5 percent increase and 5.1 percent increase, respectively, from the 2019 budget.
The proposed 2020 budget includes five Fiscal Impact Statements (fiscals):
- Cloud Transition Phase IV (Cloud Migration) – The fourth phase of the NAIC’s move to the Cloud, this fiscal requests funding for 2020 migrations. The strategy focuses on minimal change to targeted systems, to enable them to move to the Cloud quickly and minimize costs. The move to the Cloud will transform NAIC into a nimbler organization, allowing for more frequent and faster delivery of functionality and products. It also continues the implementation of SOC 2 capabilities for secure cloud computing and provides technical support for in-progress cloud projects.
- Enhanced Regulatory Data Collection (RDC) – This project expands the current framework into an enterprise solution that can integrate with other applications, improve the quality of the data collected, and minimize delays between reviewers and submitters. It will also add an administration portal to allow business owners to enter and maintain form definitions, data collection file formats, validation rules, and notifications. The UCAA redesign project listed below will utilize the enhanced functionality.
- Financial Data Delivery Platform Enhancement – This project moves financial statement data fulfillment to a cloud-based platform, thus allowing the NAIC to sunset two systems on outdated platforms and enhance security. The move will also improve delivery of datasets to licensees by utilizing web services. This will benefit customers and NAIC support staff as the redesigned processes will be easier to use and require less manual intervention and support than current processes.
- SERFF Billing Improvements – This project will eliminate the significant manual effort currently employed by customers and the NAIC to administer and pay/collect SERFF transaction fees. A fiscal was approved in 2018 to address the NAIC’s financial liability by reducing the number of prepaid block tiers and expiring blocks after 24 months. With this proposal, customers will no longer purchase prepaid blocks, thereby eliminating the financial liability altogether. Instead, customers will receive a discounted transaction fee based on filing volume in the previous year. This project will also collect transaction fees along with applicable state fees at the time of filing, eliminating manual effort on customers’ part to log into a separate platform to pay invoices and the manual effort on the NAIC’s part to invoice and collect fees.
- Uniform Certificate of Authority Application (UCAA) Redesign and Biographical Affidavit Database – This 24-month project redesigns the UCAA system as a cloud-native solution and expands the number of company licensing-related applications which can be submitted electronically to the states thereby eliminating manual processes and improving accuracy and completeness. The final phase includes a biographical affidavit database. The redesigned platform will use the enhanced RDC process, which will allow this project to expedite the implementation of additional forms for data collection and electronic submission to the states.
The proposed 2020 NAIC budget can be found on the NAIC’s About Budget page. The proposed budget is over 130 pages and is set up for duplex printing.
Budget Briefing Call Details
A budget briefing is scheduled for Monday, Oct. 14, 2019, at 10:00 a.m. ET/9:00 a.m. CT/8:00 a.m. MT/7:00 a.m. PT. The purpose of this briefing is to provide an overview of the proposed 2020 budget in advance of the comment deadline of November 7, 2019.
To participate in this call, pre-register by following the instructions at http://dpregister.com/10135564. Participants will receive their dial-in number upon registration.
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A public hearing is scheduled for Monday, Nov. 18, 2019, at 1:00 p.m. ET/12:00 p.m. CT/11:00 a.m. MT/10:00 a.m. PT. Written comments on the proposed budget are due to Jim Woody at email@example.com by November 7, 2019. Details for the public hearing will be posted on the NAIC website as soon as they are available.