In case you didn’t know, the National Association of Insurance Commissioners (NAIC) releases an annual report providing information about the various state insurance departments’ resources and how they are managed. This year’s report has been sitting on my desktop since its release on August 1, and I’ve finally had time to sit down and review it thoroughly.
I know, lots of you are probably thinking, Why on earth would anyone want to do that?!? The truth is I love statistics – always have. I always seem to find out interesting and unexpected little factoids when I review these kinds of reports. So here, in no particular order, are five(ish) things I learned.
#1 Where Do Insurance Commissioners Come From?
Well, when a state government and an insurance industry love each other very much …
Seriously, we all know that insurance commissioners and their departments are accountable to insurance consumers in their states. But some are perhaps a little more accountable than others. I had no idea that some insurance commissioners are actually elected. Of the 56 jurisdictions included in the report, 12 elect their commissioners. That number includes California and my own native state, North Carolina.
#2 Can’t Get Hold of Anyone at the DOI?
The good news is it shouldn’t be because of reduced staffing. Of the 56 jurisdictions, 29 increasing their staffing levels between 2014 and 2018. West Virginia had the biggest increase, 39.48%, with Arkansas coming in second with an increase of 22.94%. At the other end of the spectrum, Iowa saw a 17.82% decrease in staff size. Of course, there are lots of factors involved in staffing levels. Increased use of automation, for example, might mean fewer people are needed to handle the same workload. The report provides a detailed breakdown of the distribution of staffing across the various roles.
#3 Forget Texas, Don’t Mess with Florida
Producers sometimes (mistakenly) feel that regulators are out to get them in order to supplement their budgets. That’s simply not true. For most states, fines and penalties make up less than 3% of their funding. A notable standout in the 2018 report was Florida. Fines and penalties there made up 12.91% of their funding.
#4 Taking Action
That doesn’t mean that DOIs don’t take action against licensees that violate regulations. Delaware led the way in suspensions with 31,281! Michigan led the pack in license revocations with 307, although California came in a close second with 276. Michigan also topped the list of cease & desist orders with 30, followed by Puerto Rico with 26. Florida and California led the way in denial orders, with 344 and 319, respectively. Delaware issued the most fines (2,540), but everything was bigger in Texas with a total fine amount of $7,481,914.
#5 A Matter of Discretion
Fines and penalties often arise after a financial or market conduct exam. According to the report, Pennsylvania conducted the most financial exams (113), but most of these were statutory exams – unlike New Mexico, where 31 of their 69 exams were discretionary. For market conduct exams, Massachusetts took First Place with 121 exams, 113 of which were discretionary.
Hope you found this interesting, too!