State lawmakers are welcoming a suggestion that the National Conference of Insurance Legislators share the state assessment revenue now flowing to the National Association of Insurance Commissioners.
The $2.1 million in state assessment revenue that the NAIC, Kansas City, Mo., expects to collect in 2008 would make up only a small part of the NAIC’s $66 million 2008 budget, and the amount is only slightly larger than the $1.9 million budget surplus the NAIC is expecting to enjoy in 2008, according to members of the Insurance Legislators Foundation board.
The ILF board, an arm of NCOIL, Troy, N.Y., included the assessment-sharing suggestion in the second phase of a report on state insurance regulation.
NCOIL members will review the report here at a special executive committee board hearing.
State Rep. Brian Kennedy, D-Hopkinton, R.I., NCOIL’s incoming president, says sharing a portion of the state assessment revenue should not have a material effect on NAIC operations.
“The goal is to maintain state-based regulation, and it seems that this would just make good sense,” Kennedy says.
The assessment line item in state budgets appears to be a general, discretionary line item, not an item that is tied to any one organization, Kennedy says.
The income from state premium assessments would probably be more important to NCOIL than to the NAIC, given the size of the NAIC budget, Kennedy says.
State Rep. Robert Damron, D-Nicholasville, Ky., NCOIL’s treasurer, agrees that state premium assessment income would be more important to NCOIL than to the NAIC.
The challenge would be working with state legislatures to redirect the funds, Damron says.
State Rep. George Keiser, R-Bismarck, N.D., NCOIL’s executive committee chairman, also agrees that NCOIL should explore the assessment-sharing option.
“Certainly, the funding level of NCOIL is very limited,” Keiser says.
The difficulty could lie in developing a mechanism that would make it possible to redirect state premium assessments, Keiser says.