The National Association of Insurance Commissioners approved its 2006 operating budget during the Winter National Meeting this week.
The NAIC budget was proposed in September and a public hearing was held shortly after that during which industry representatives raised concerns regarding the size of the NAIC’s reserve, among other items. The budget was approved at the Winter National Meeting without further comments from the industry or consumer groups.
The budget itself calls for consolidated revenues of $59.3 million and consolidated expenses of $58.4 million, representing a .18 percent and 3.69 percent increase, respectively from the 2005 budget and a 1.63 percent and 3.87 percent increase from 2005 projected levels.
“Our primary objective is to demonstrate the NAIC’s focus on modernization of state insurance regulation,” said Alessandro Iuppa, NAIC president and Maine Insurance Superintendent.
The NAIC said its focus includes a substantial financial commitment to SERFF and its redesign and enhancements to the State Based Systems Initiative and other regulatory modernization reforms.
Some industry representatives questioned the 100 percent reserve section of the budget. Several national property casualty insurance trade associations questioned the need for such a high reserve percentage. The NAIC leadership said the reserve level was the result of a very detailed review and recommendation by an independent consultant, Tate and Tryon, and careful review by the NAIC Executive Committee. The NAIC said that the issue of the reserve will be taken under careful review in coming years.
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