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NAIC Initiates 2021 Budget Approval Process

2021 NAIC Budget image

WASHINGTON (Oct. 28, 2020) — The National Association of Insurance Commissioners (NAIC) is releasing its proposed 2021 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 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 proposed 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 proposed 2021 budget includes four Fiscal Impact Statements (fiscals):   

  1. 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. 

  2. 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.   

  3. 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. 

  4. 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.

The proposed 2021 NAIC budget can be found on the NAIC’s About Budget page.  

Budget Briefing Meeting Details 

Proposed NAIC 2021 Budget Briefing with Interested Parties 

A budget briefing is scheduled for Wednesday, Nov. 4, 2020, 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 2021 budget in advance of the comment deadline of November 20, 2020.  

Participants must pre-register to participate in this briefing by clicking here. Participants will receive WebEx information upon registration.   

Public Hearing  

A public hearing is scheduled for Wednesday, Dec. 2, 2020, at 12:00 p.m. ET / 11:00 a.m. CT / 10:00 a.m. MT / 9:00 a.m. PT. Written comments on the proposed budget are due to Jim Woody at jwoody@naic.org by November 20, 2020. Details for the public hearing will be posted on the NAIC website as soon as they are available.       

About the NAIC

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. For more information, visit www.naic.org.

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