BestWeek: NAIC Prepares for Budget Shortfall

The National Association of Insurance Commissioners’ 2009 budget of $73.1 million will not achieve its revenue goals, and NAIC officials have begun to cut spending to blunt the impact of the shortfall, according to a story in BestWeek U.S./Canada.

With aspects of the 2010 draft budget still to be determined, NAIC Chief Operations Officer Andrew Beal said many details are not yet available. But he said the association has begun to slice into its current 2009 budget in anticipation of “a little bit of a shortfall.”

Among them: no salary increases for the second half of 2009 or the first half of 2010, no funding of new positions, and unspecified cuts to the much-criticized travel budget. No layoffs and mandatory furloughs are currently under consideration, Beal said.

“The NAIC is not immune from the economic conditions of the marketplace,” Beal said.

NAIC President and New Hampshire Insurance Commissioner Roger Sevigny promised a 2010 budget that is “realistic, conservative and frugal.” The budget will be introduced at the NAIC’s fall national meeting near Washington, D.C., Sept. 21-24.

In BestWeek Europe, shareholders of Paris Re Holdings Ltd. approved a series of proposals that would set the table for Paris Re’s merger with Bermuda-based PartnerRe Ltd. According to Paris Re, shareholders representing 71.99% of the company’s outstanding shares approved five proposals from the board of directors at an extraordinary general meeting Aug. 11. Among the measures, shareholders approved the election of five PartnerRe executives to Paris Re’s board of directors.

Also in BestWeek U.S./Canada, two years after it was adopted, the New Jersey personal injury protection medical fee schedule has gone into effect due to a recent decision by the state Superior Court’s Appellate Division. Now, automobile insurers say reimbursement for medical costs can be controlled and expensive litigation over the payments can end. Simply, the schedule can keep insurance costs down.