NAIC - Operations / Budget / etc
- 2022 1216 - NAIC - Attachment Two - Executive (EX) Committee and Plenary - Executive Summary - NAIC 2023 Budget - 119p
- (p12) - Group Cap Adjustment
- 5. The ACLI requests the NAIC use its unrestricted net assets by increasing its annual deficits rather than increasing the cap on database filing fees to generate additional revenue. Although the database filing fee group cap has not been increased since its inception (despite an increase in the number of mergers and acquisitions resulting in large groups), they do not see the need to increase the group cap to enhance revenues given the NAIC’s projected Net Asset balance at the end of 2023.
- NAIC Response: The NAIC appreciates the ACLI’s comments and wishes to note that for 2022, the NAIC is projected to have a $3.6 million operating loss, and because of investment losses, is budgeted to experience a $18.9 million reduction in surplus during 2022. Additionally, before the inclusion of the filing fee cap revenue adjustment and considering the other fiscal impact statements, the NAIC’s 2023 operations are budgeted to incur a $9.4 million operating loss (which is reduced to a $4.8 million operating loss by the increase in group cap revenues by $4.6 million). Also notable, the budget operating loss does not include the $11.7 million in planned capital expenditures, an increase of $5 million over 2022’s planned capital spending of $6.7 million. The ACLI does correctly identify that NAIC’s revenues, before the cap adjustment, do indeed increase, however expenses are budgeted to grow at a significantly faster rate. Several of the NAIC’s systems, as indicated throughout various fiscal impact statements, are 20+ years old, and accordingly many of these systems will require significant upgrades. These planned and future upgrades will provide the members, insurance companies, and consumers with the access, data, and services they expect and deserve.