Managers of the National Association of Insurance Commissioners could spend about $12 million over the next three years to improve the organization’s information systems and data security efforts.
Officials at the Kansas City, Missouri-based regulator group say they hope to use about $8.5 million to modernize the NAIC’s insurance industry data collection systems, and change the NAIC’s tech project development practices.
NAIC officials say they also need money to create an analytics data warehouse, offer regulators self-service business intelligence tools, harden NAIC systems against hackers, and create tools regulators can use to educate consumers.
Officials have outlined the spending proposals in a new three-year strategic plan.
(Related: Making a Case for a Strengthened NAIC)
The plan, dubbed “State Ahead,” also includes non-tech proposals, and both tech and non-tech proposals that that involve little or no extra spending.
A copy of the plan is available here.
NAIC officials want to spend $600,000 to give state insurance regulators more briefings on complicated new issues, such as cybersecurity, and the insurance implications of self-driving vehicles.
Other, low-cost projects could include expanding training programs for insurance department staffers below the commissioner level, and weeding out NAIC working groups and other NAIC panels that aren’t doing enough to justify their cost.
Julie Mix McPeak, the NAIC president, and four other NAIC officers write in a letter introducing the strategic plan that they have been talking to NAIC employees and other commissioners about the strategic plan since early 2017.
The strategic plan is necessary because of all of the many forces changing the nature of U.S. insurance regulation, including low interest rates, advances in technology, and consumers’ demand for simpler, faster insurance product purchasing procedures, NAIC officials write.
“The NAIC has never experienced such a convergence of forces with the potential to reshape the industry,” NAIC officials write. “We need to evolve with the marketplace around us, lest we be left behind.”
The NAIC was founded in 1871. It hopes to generate about $106 million in revenue this year and spend about $106 million.
The NAIC expects to get 28% of its 2018 revenue from insurance company and industry information database fees, and 15% of its revenue from the sale of publications and other types of insurance data products. Only 2% of NAIC revenue comes from member assessments, according to the NAIC budget.
— Read NAIC To Move HQ To Washington on ThinkAdvisor.