Insurance industry representatives are questioning some of the items in the budget proposed by the National Association of Insurance Commissioners.
The 2009 budget comment period ended Friday.
The NAIC, Kansas City, Mo., will hold a public hearing on the budget proposal Nov. 5, and the NAIC’s executive committee will consider the budget Dec. 6.
The NAIC is projecting that revenue will increase 7.1%, to $73.1 million, and expenses will increase 6%, to $70.5 million.
Sources of revenue growth should include an increase in revenue from the System for Electronic Rate and Form Filing, an increase in royalties from data redistributors, and an increase in revenue from the state producer licensing system, according to Roger Sevigny, the NAIC president-elect and New Hampshire commissioner.
Expenses could include a 3.5% increase in employee salaries and benefits, to $411,873 and an additional $748,000 in insurance department travel subsidies, Sevigny says.
The NAIC also will be paying for a severance package for Cathy Weatherford, the former chief executive, who left in August; the formation of a new market conduct analysis program; and implementation of efforts to move the NAIC’s executive team to Washington.
The NAIC has not published information about the size of the settlement with Weatherford or information about projected compensation for the NAIC’s next chief executive.
Andy Beale, the NAIC’s acting chief executive, said in response to a question from Bill Boyd, a manager at the National Association of Mutual Insurance Companies, Indianapolis, that the terms of Weatherford’s separation agreement are confidential and will not be released.
Sevigny said estimates of the cost of paying the next NAIC chief executive and moving NAIC executives to Washington are not yet available.
Deirdre Manna, a vice president at the Property Casualty Insurers Association of America, Des Plaines, Ill., asked if the NAIC has an estimate of implementing a proposal to create an independent rating agency.
There is no specific 2009 line item, and the initial funding would come from the budget lines for other regulatory modernization initiatives, according to Brady Kelley, the NAIC’s chief financial and business strategy officer.
The NAIC has budgeted $541,000 for the creation of a Brussels-based liaison to regulators in Europe.
Boyd asked whether the NAIC could use the NAIC representative at the International Association of Insurance Supervisors, Basel, Switzerland, to handle the work in Brussels.
Sevigny said the duties in Basel and Brussels would be too much for one rep to handle.