State insurance budgets tick up
By National Underwriter
By Elizabeth Festa
State insurance departments are showing overall growth in budget levels over the past few years, with some significant highs and lows, according to the just-released National Association of Insurance Commissioners (NAIC) statistical report.
Overall, state budget levels for fiscal year 2014 are expected to rise by 0.04 percent from 2013 amounts, and to increase by 4.8 percent from 2010 amounts, according to the study, Insurance Department Resources Report 2012, Volume 2.
Total projected fiscal year 2014 budgets are $1.3 billion.
About half the U.S. jurisdictions -- 26 of them -- reported increased 2014 budget amounts from their 2013 reported budgets.
Thirteen states’ fiscal year budgets declined over the four year period, from fiscal years (FY) 2010 to 2014. The majority rose, and the majority of those rose by double digits, the data show.
States that rose significantly in budget funds over the four years tended to be states with a smaller revenue base. The largest increase begins with Vermont, which tallied a 70.13 percent increase to almost $11 million for FY 2014, and Oklahoma, which rose 44 percent to a FY high of $15.5 million, and Montana’s 40.13 percent rise to almost $5.44 million.
For declines, the Florida Insurance Department stands out. Florida's budget suffered a drop of 30.47 percent between FY 2010 and FY 2014, from $116 million to almost $80.65 million. Interestingly, Florida's insurance industry premium volume has risen incrementally since 2009 to almost $112.72 billion. Budget funds come from a variety of sources, including assessments, premium taxes, federal grants, unclaimed checks, interest and investments, fines and special funding. Overall, the budget as a percent of revenue is 6.63 percent, falling to 2005 levels from a larger share of almost nine percent in 2009.
Other significant decreases include Indiana, where the state's insurance department budget dropped 21.02 percent to $8.9 million and Alabama, down 13.86 percent to $18,52 million.
In terms of budget size, California reported the largest 2014 budget of almost $175 million, which is $31.3 million greater than the second-largest 2014 budget (New York). California’s percent rise since FY 2010 is 15.07 percent, while New York's is only 2.68 percent.
The five states with the most premiums written in all lines were again led by California, followed by New York, Texas, Florida and Pennsylvania. These five states accounted for 40.3 percent of all insurance premiums in the United States, the NAIC stated.
Revenues collected from the insurance industry increased 1.5 percent since 2011, to $19.5 billion. Total taxes collected increased by 1.4 percent. Fees and assessments decreased by 1.2 percent, and fines and penalties increased 126.2 percent.
Premiums increased by 5.7 percent to $1.8 trillion since the 2011.
Since most captive insurers only report premium to their state of domicile and do not provide information to the state in which the risk is written and may skew total premium for individual states, it is no longer included in the total premium for each state.
Vermont led, with 500 domestic captives in 2012 and $25,138,002,581 in total premium. Missouri was a vast second, with $6,563,633,128 in total premiums, followed by active and maturing captive jurisdictions New Jersey, Arizona, Hawaii and Delaware.
Originally published on LifeHealthPro.com