The National Association of Insurance Commissioners has published the new edition of a kind of almanac aimed at people who want to know exactly how insurance regulation really works: the first volume of the NAIC’s Insurance Department Resources Report.
The first volume covers topics such as how many insurers the United States has, how many people work for state insurance departments, and various types of employees in state insurance departments earn.
The NAIC is a group for insurance regulators in U.S. states and territories.
(Related: 5 Worst States for Insurance Producer Fines)
One reason the NAIC publishes the resources report is to help states see if they’re spending too much on some regulatory functions. Another reason is to help states see if they’re spending too little to protect policyholders’ interests and provide efficient service to insurers, agents and other insurance industry players.
If an insurance department has too little money, or spends too much on the wrong things, it could have trouble with issuing insurance licenses to agents, getting annuity contracts and contract changes through the approval pipeline, or answering basic questions from agents and consumers.
Hawaii, for example, has 10 deputy or assistant insurance commissioners. The have annual salaries ranging from $46,000 to $129,000.
The NAIC also shows how big each department’s budget is, and the revenue streams that support the departments.
The budget ranking table shows that California has a budget of about $225 million this year. New York state comes in a distant second, with a budget of about $158 million. The Wyoming department has to make do with $3.1 million.
The departments get an average of 80% of their funding from fees and assessments, 16% from state general funds, and 5.3% from “other.”
State departments get an average of 0.8% of their revenue from imposing fines and penalties.
Some state departments get a much higher share of their revenue from imposing fees and penalties than others. For a list of the five states that get the highest share of their funding from collecting fees and penalties, see the slideshow above.
A copy of the first volume of the NAIC’s new Insurance Department Resources report is available here.
Correction: The fifth-ranked state, in terms of fines and penalties as a share of total revenue, was identified incorrectly in an earlier version of this article. The fifth-ranked state is North Dakota.
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