Annual Budget

 

Annual Budget

Insurance Compact Budget Process

The Interstate Insurance Compact’s annual budget process is open and transparent with participation from Compact Members and all interested parties, including the Legislative Committee and the Industry and Consumer Advisory Committees. The Insurance Compact’s Executive Director is charged with drafting an annual proposed budget for review by the Compact membership. Throughout the development of the budget, there are numerous and rigorous reviews conducted by the Insurance Compact Office in consultation with the National Association of Insurance Commissioners (NAIC) Finance Department which provides accounting and financial services under the Insurance Compact - NAIC Services Agreement. The Compact Officers and Finance Committee review and agree upon a final proposed budget which is then recommended to the Management Committee for a public comment period. During this public comment period, all interested parties may review and submit comments regarding the proposed Insurance Compact Annual Budget. The final Budget is then the subject of a majority vote by both the Management Committee and the full Commission before it is accepted and implemented by the Compact Office.

Insurance Compact 2019 Budget

The 2019 Annual Budget process began in the summer of 2018, with a proposal from the Executive Director working with the NAIC Finance Department to the Finance Committee. The Finance Committee held two public calls to receive comments on its annual budget recommendation, which included six fee proposals and two resource requests. The Finance Committee recommended the 2019 annual budget package to the Management Committee on September 29, 2018. The Management Committee exposed the proposed budget package for public comment and held a public hearing on October 29, 2018. The Commission adopted the 2019 Annual Budget on November 14, 2018, during the joint meeting of the Management Committee and Commission in San Francisco.

The 2019 Annual Budget anticipates revenues and expenses of approximately $2.75 million and $2.5 million, respectively. The Insurance Compact will expand its annual registration categories with companies of $1 billion or more in premium volume having an increase in their annual registration fees for the first time since 2008, while companies with $10 million or less in premium volume will experience a decrease in annual registration fees. The Annual Budget includes a pilot program for a limited-queue expedited review process, as well as two new filing fees: a fee for an optional service to calculate filing fees in advance of payment, and a fee to be assessed on electronic funds transfer (EFT) returns after a company’s first return. The Annual Budget includes the retention of two new reviewer resources in second quarter 2019 – a form reviewer and actuary.

The 2019 Annual Budget demonstrates the Compact’s growth. For the sixth year in a row, the Insurance Compact did not utilize the available line of credit from the NAIC. The Insurance Compact does not plan to request any line of credit in 2019.

Should you have any questions about the Interstate Insurance Compact's Annual Budget, please contact the Insurance Compact Office.