NAIC Trims Budget Outlay For 2005

NAIC Trims Budget Outlay For 2005

NU Online News Service, Oct. 6, 4:26 p.m. EDT?The National Association of Insurance Commissioners said it is proposing a $55 million budget that is leaner than last year with nearly three percent less spending in 2005.[@@]

The NAIC said it will hold a hearing to discuss the budget via a conference call on Nov. 17.

According to the association, the consolidated budget for 2005 calls for projected revenue of $58.8 million, a 2.06 percent rise over the 2004 budget level, with projected expenses of $55 million, a 2.83 percent drop from the 2004 budget level.

NAIC President Diane Koken, the Pennsylvania insurance commissioner, explained that the association has been able to realize "significant expense reductions from the prior year" by cutting costs or reallocating human and budget resources from "less essential to more essential projects and services."

"I'm pleased to report that we have cut expenses by $1.6 million overall, representing a 2.83 percent reduction from 2004," Ms. Koken said.

Significant revenue changes from 2004 to 2005 include:

? Database revenues: they are projected to go up by around $422,780, or 1.68 percent over the 2004 budget.

? Publications and subscriptions revenue: these will jump by $486,229, some 3.53 percent, from the 2004 budget.

? Services revenue, however, is budgeted to decrease by $859,612, or 8.83 percent.

? Investment income is projected to go up by $124,965, or 18.7 percent, from the 2004 budgeted level.

Significant expense changes from 2004 to 2005 include:

? Salaries: are budgeted to go up $1,112,288, or 4.5 percent, from the 2004 budget. The 2005 salary budget also includes the elimination of six full-time employee positions.

? Travel is budgeted to drop by $193,982, or 9.2 percent, from 2004.

? Professional services are budgeted to drop by $1,214,165, or 29.9 percent.