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January 05, 2009 at 10:47 AM
Insurance departments are responding to the recession by working to hold down spending.
But many departments have their own sources of funding that are separate from general revenue funding, and the impact of a recession will depend partly on the stability of those funding sources, according to representatives for several major state insurance departments.
The 2009 budget of the National Association of Insurance Commissioners, Kansas City, Mo., includes travel subsidies to support each state commissioner’s involvement in NAIC national meetings.
The NAIC will distribute $13,000 in grant funds per state this year, up from $10,000 in 2008, and it will award additional scholarships to state regulators who need help paying to attend NAIC national meetings and educational programs.
The NAIC budget also includes $3,000 per state for members to host state legislators at the NAIC 2009 Fall National Meeting.
The situation at the state level varies from state to state.
Connecticut is expecting to suffer from a $6 billion deficit over the next 2 years.
Connecticut Gov. Jodi Rell has imposed a hiring freeze and a ban on all non-essential travel, according to Connecticut Insurance Commissioner Tom Sullivan.
About 20 states have similar travel restrictions, Sullivan says.
The Connecticut department gets its funding from assessments on insurers domiciled in the state, not from the state’s general fund, but Sullivan says his department is trying to be fiscally prudent, to “set a good example when others are being asked to cut back.”
The number of Connecticut regulators at the NAIC’s 2008 winter meeting fell to 6, down from a peak of 9, Sullivan says.
In New York, which is expecting a $15 billion budget deficit, the insurance department finances its operations by collecting assessments from participants in the insurance industry, according to David Neustadt, a spokesman for the New York department.
