A regulatory group is giving insurers a break on fees.[@@]
The National Association of Insurance Commissioners, Kansas City, Mo., is waiving a requirement that insurers pay a second, $790,000 installment on a special Securities Valuation Office assessment.
The SVO evaluates the safety level of the securities in insurance company portfolios.
In 2004, state insurance regulators agreed to exempt “Nationally Recognized Statistical Rating Organization-equivalent” securities from SVO filing rules.
NAIC officials imposed a 2-part, $1.58 million assessment in an effort to keep the filing rules change from cutting SVO revenue.
But the filing fee shortfall was smaller than expected because insurers paid to file more than 4,000 securities that were exempt from the filing requirement, and that reduced the need for an assessment to hold revenue steady, according to NAIC Chief Executive Catherine Weatherford.
Weatherford says the NAIC will try to do more to tell companies that they no longer have to file NAIC-1 and NAIC-2 securities with the SVO.
Some companies may have voluntarily chosen to file the exempt securities in 2004 as they move to the new system, but many have stopped filing the exempt securities, Weatherford says.
The number of filings of products in the newly exempt category fell to 4,097 in 2004, from 24,790 in 2003, according to the NAIC.
The NAIC is in the process of reviewing whether other securities may be exempt, and it could establish a pilot project, Weatherford says.
The non-NRSRO filing fee revenue anticipated and budgeted for 2004 totaled $4.5 million.
In the future, if the number of SVO filings continues to fall, the NAIC could impose another assessment to hold SVO revenue steady, Weatherford says.