The National Association of Insurance Commissioners’ (NAIC) revealed in its proposed 2012 budget that a significant loss in projected investment income in the third quarter due to volatile markets has eliminated the $3 million projected total net revenue margin for the NAIC for 2011 initially projected back in June.
The NAIC also said in its budget proposal that further fluctuation of the market value of the NAIC’s portfolio is expected through the end of 2011 due to the volatility.
Unrealized gains that were at $2.1 million as of June 30th have fallen to a loss of $2.9 million as of Sept. 30, a $5 million plunge, according to the report.
The 2011 mid-year projections showed a net margin of negative $1.2 million without the expected bump from the structured securities project and investment income, and without the fiscal impact proposals, which was better than first budgeted.
The total projected 2011 revenue after business and fiscal impact statements and the structured securities project was $4.159 million, according to the revenue and expense summary.
The NAIC 2012 proposed budget includes total revenues of $79.2 million and total expenses of $77.6 million, which represent a 4.99% and 2.52% increase, respectively, from the 2011 budget. The base budget includes revenues of $78.2 million and expenses of $75.4 million, a decrease of .58% and .42% respectively from the 2011 projected totals. The base budget does not factor in the structured security project and the fical impact proposals.
The budget proposal line items and text go back and forth between the projected 2011 totals and revenues, in light of the “significant change in investment income,” and the expectation of further volatility.