NAII On NAIC Finances: Corrected Version
NU Online News Service, Nov. 13, 4:20 p.m. EST?The National Association of Independent Insurers is pressing for the National Association of Insurance Commissioners to tighten its fiscal belt.
The group's comments came after the National Association of Mutual Insurance Companies suggested last week that the NAIC might drop its Securities Valuation Office as an unneeded operation.
NAII, based in Des Plaines, Ill., said it was happy that the NAIC had not increased its database fees, but said it was encouraging regulators "to look further for ways to cut spending in the organization's 2003 budget and to create a long-term fiscal plan."
"The NAIC did a good job of holding the line on raising database fees for this year, but NAII still has a general concern about the level of growth and spending in the NAIC budget," said Robert L. Zeman, NAII senior vice president for state government affairs.
"At a time when state governments and insurance departments are facing serious budget shortfalls, it is interesting that the NAIC budget and reserves have increased last year," he added. "In light of economic circumstances, we suggest that the NAIC continue to look into new and innovative ways to further reduce expenses."
After reviewing the budget, NAII said it sent specific written comments to the NAIC, but also posed "bigger picture" questions to the committee regarding future budgets and planning.
"The NAII, like the NAIC, is a strong supporter of the state regulatory system, but our board also recognizes that state regulation must improve. We feel it is critical for the NAIC to continue a leadership role in improving the state-based framework," Mr. Zeman said.
He commented that progress made by the various working groups that arose from NAIC's Statement of Intent on regulatory reform, issued two years ago, is encouraging, "but efforts need to continue and must be further implemented in the states."
"A long-term fiscal plan is needed, and it should clarify what additional programs are being considered by the NAIC in their effort to advance modernization of state insurance regulation," Mr. Zeman said.
Another NAII written comment included a question about proposed new fees with the Securities Valuation Office.
"We are pleased that the Executive Committee agreed during its recent conference call hearing on the budget to have a discussion about the SVO fees during the Industry Liaison Committee at the NAIC Winter Meeting," Mr. Zeman said. Other specific concerns were addressed during the conference call hearing.
The NAII said it expects a further discussion on budget concerns and the SVO fee question during the Industry Liaison Committee meeting at the NAIC's Winter Meeting, set for Dec. 7-10 in San Diego.
The Executive Committee is expected to adopt the proposed 2003 budget at the Winter Meeting.
NAIC did not respond when asked previously about cost-cutting suggestions.
NAII said it has 715 member companies writing more than $98 billion in annual premium, representing more than 31 percent of the nation's property-casualty insurance.
###
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.