The National Association of Insurance Commissioners (NAIC) anticipates $167 million in revenue for 2025, including investment income, against projected expenses of $173.6 million.
The $6.6 million shortfall is attributed to an 8.8% increase in expenses driven by higher staffing needs, inflation, and technology-focused initiatives, according to the association's budget document.
The forecasted revenue represents a 6.2% increase over 2024, while the projected expenses continue a trend of operating with deficits, a practice the nonprofit group has managed in prior years. For example, the 2022 budget projected a deficit of $7.5 million.
The NAIC’s budget outlines eight major priorities for 2025, each expected to have a fiscal impact of at least $100,000 or require over 1,150 hours of internal technical resources. As per a report from AM Best, five of these initiatives focus on technology enhancements to modernize NAIC systems, while others aim to expand analytical, informational, and operational capacities.
Among the key technology projects is an upgrade to the System for Electronic Rates & Forms Filing platform, which will extend its use to life and property/casualty users in 2025. To support this expansion, the association plans to add two staff members.
The NAIC is also advancing the fourth phase of its enterprise data platform, which focuses on developing a cloud-based system for financial and regulatory data. Other projects include a long-term care experience study in collaboration with the Society of Actuaries and exploring third-party vendor solutions for managing financial data repository infrastructure.
To support its initiatives, the association is seeking to hire additional staff, including five technical employees for the Capital Markets and Investment Analysis Office and eight more employees for roles in technology, regulatory services, and operations.
Funding for the NAIC’s operations comes from various sources, including fees for required data collection from the insurance industry, meetings and conferences, and investment analysis.
Additional revenue streams include licensing data and compliance services through the National Insurance Producer Registry and the Insurance Compact system, which provides a streamlined multi-state product review process.
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