The new budget is in. The National Association of Insurance Commissioners (NAIC) 2014 proposed budget includes total revenues of $93.2 million, including $3.8 million in investment income and total expenses of $91.8 million, which represents a 3.68 percent and 3.87 percent increase, respectively, from the 2013 budget.
It is expected to exceed the 2013 budget by $7.3 million.
The proposed operating revenue budget is expected to be $89.5 million, 2 percent higher than the 2013 budget but 1.5 percent less than the 2013 projection.
However, in relation to the 2013 projected totals, the 2014 proposal represents an operating revenue decrease of 1.51 percent and an operating expense increase of 2.67 percent.
Increases are coming not from database fees but valuation services. The valuation services revenue is higher than budget by $2.52 million mostly because of higher than budgeted revenue generated by the 2012/2013 structured securities project and higher than expected Securities Valuation Office (SVO) revenue, the NAIC said in its proposed budget release.
Database fees are about 29.5 percent of the 2014 budget revenue mix, while valuation services are about 26 percent. Professional services is lower than the previous year due to resolution of legal matters and completion of enhancements to SERFF required for the Patient Protection and Affordable Care Act (PPACA) Plan Management System.
Database fees are lower than budget by $410,000 due to database fee caps.
Revenue from publication and insurance data products is up by $181,499 from the 2013 budget and $133,000 more than the 2013 projection due to growth in this area.
“The 2014 proposed budget reflects the NAIC’s commitment to prudently manage expenses while investing in important projects to enhance the association’s ability to evolve with changes in insurance regulation,” stated Adam Hamm, NAIC president-elect and North Dakota Insurance Commissioner. “The NAIC provides its members with the tools and resources necessary to regulate companies in a sound and cost-effective manner.”
Proposed expenses increased almost 4 percent compared to 2013 and increased a lower amount compared with the 2013 project, the NAIC said.