The economic crisis is starting to cause noticeable problems for state insurance departments.
State government furloughs are affecting some insurance regulatory agencies.
The Maine Bureau of Insurance is one of them. The bureau noted on its website that it, along with all other Maine government departments and agencies, will be closed Monday.
This Monday will be the first in a series of 10 days where the entire state government will be shut down, according to Doug Dunbar, assistant to the commissioner of the Maine Department of Financial and Professional Regulations.
“That was a state-government-wide decision,” Dunbar says.
The government has designated 10 furlough days for this fiscal year and 10 more for the next fiscal year, Dunbar says.
The Arizona Department of Insurance has warned on its website that it might be shutting down indefinitely today, but that shutdown did not come to pass.
“We had that [warning] done in case a budget was not passed,” says Erin Klug, an Arizona department representative.
The budget was passed and now sits on the governor’s desk, Klug says.
But, “last fiscal year, there were significant budget cuts, including furlough days for many employees,” Klug states. “Over the fiscal year, 30% of our employees were laid off.”
In Pennsylvania, “the deficit is having a stress on the entire government’s budget and that trickles down to insurance,” says Randy Rohrbaugh, the state’s deputy insurance commissioner for administration. “All vacancies have been removed by the department. We won’t be able to hire people in those positions.”
In addition, the department’s travel budget “has been cut severely,” which has greatly limited out-of-state trips to conferences and workshops, Rohrbaugh says.
Michael McRaith, director of the Illinois Department of Insurance, says he cannot definitively say what kind of effect budget constraints will have on his department, but he is hopeful appropriate funding will be available.
“While the Department of Insurance is not funded by taxes and not dependent upon income tax, existing proposals from the legislative leaders and governor indicate that the Department of Insurance will receive appropriate funding,” McRaith says.
Officials at insurance departments in two of the country’s most-populous states, New York and California, say their departments are not having serious budgetary problems.
“Like all state agencies, we’re closely monitoring spending, but it hasn’t affected our core goals,” says Andy Mais, a New York department spokesman.
When told about the possibility of the Arizona department shutting down, Mais ruled out any chance of the New York department shutting down.
“That’s not going to happen here,” Mais says.
In California, despite the state’s fiscal crisis, the insurance department budget is in place until the end of the new fiscal year.
“We passed a budget in February through 2009 to 2010,” says Darrell Ng, a California department spokesman. “They’re currently fighting over revising the budget. Because of that, we have the authority to spend through June of 2010.”
Ng declined to comment on any problems that might arise once the current budget expires.