This year is the 32nd time the NAIC has published its annual Insurance Department Resources Report
The National Association of Insurance Commissioners’ (“NAIC”) annual Insurance Department Resources Report (IDRR) is out. The Report, released in two separate volumes each year, has been published annually for the past 32 years and takes a look at a variety of metrics of the Division of Insurances from around the country.
The first of the two-volume report focuses on the resources and regulatory activities of the 56 NAIC-member jurisdictions. This includes the 50 states plus the District of Columbia, American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and
the U.S. Virgin Islands. All of the data compiled within the NAIC reports come via detailed surveys completed by each of the divisions of insurance.
Five general takeaways from the 2018 report
The following are some of the general takeaways from this edition of Volume One of the NAIC’s report.
- There were 5,965 domestic U.S. insurers in 2018 an increase from
5,954 companies in 2017. - State insurance departments received nearly 290,000 official complaints and more than 1.6 million inquiries.
- Licensed resident producers numbered nearly 2.2 million individuals and 228,393 entities. Non-resident producers consisted of nearly 6.6 million individuals and 456,908 entities.
- 5,598 fines and 1,582 restitutions were levied against insurance producers in 2018; while 32,767 licenses were suspended; and 2,035 licenses were
revoked. - California claims the largest 2020 budget, projected to be $66.1 million greater than the second-largest 2020 budget (New York).
Number of Domestic Insurers & Regulated Entities nationally, in New England, and Massachusetts specifically.
There were 80 domestic insurers in Massachusetts as of 2018.
Looking at the New England region as a whole, Vermont, however, is the New England state with the highest number of domestic insurers, with 109 domestic insurers in 2018. Connecticut is second with 102 insurers, followed by New Hampshire (57), Rhode Island (31), and then Maine (22).
New York is the state with the largest number of domestic insurers (577), followed by Florida (432), and Texas (410). Wyoming, Alaska, and American Samoa tie for the states with the least amount, each with only five domestic insurers in each state.
The Massachusetts Division of Insurance by the numbers
Agency Checklists has parsed the report for the facts and figures with respect to Massachusetts. Here is what the report found for 2018:
It has a total of 80 Domestic Insurers, one less than in 2017, and three less than in 2016.
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- Life/Annuities: 16
- Property/Casualty: 48
- Health: 13
- Fraternal: 2
- Title: 1
- Risk Retention Group: 0
- Other: 0
Its total number of Licensed Foreign Insurers is 1,330
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- Life/Annuities: 370
- Property/Casualty: 706
- Health: 2
- Fraternal: 26
- Title: 17
- Risk Retention Group: 77
- Other: 0
- The number of Domiciled Self-Insured Groups or Pools is 25;
- The Commonwealth only counted four Domiciled Purchasing Groups in 2018.
2018/2019 Insurance Department Budgets
The Massachusetts Division of Insurance is funded 100 percent by a combination of fees and assessments. The 2020 projected budget for the Division is $15,309,000. Every year for the past five years, the Division of Insurance in Massachusetts has seen an increase in its budget.
- Projected 2020 budget: $15,309,000
- 2019 budget: $14,578,000
- 2018 budget: $14,412,000
- 2017 budget: $14,611,730
- 2016 budget: $14,712,080
Looking at the past five year period, the increases in the DO I’s budget have represented a 4.06% increase from 2016 through 2019. As compared to other states, Massachusetts budget, however, is comparatively small for being the 11th largest insurance market in the country, listed as the 29th largest budget out of the 50 states and jurisdictions.
The ten states with the largest insurance department projected budgets are listed in descending order:
- California $226,042,000
- New York $159,923,000
- Texas $121,804,367
- Florida $89,505,969
- Illinois $53,427,400
- North Carolina $51,080,490
- New Jersey $50,799,000
- Alabama $44,032,323
- Ohio $42,518,154
- Michigan $36,787,100
Revenues, Taxes, Fees & Fines Collected
As for Revenues, the Massachusetts Division of Insurance’s total revenues in 2018 was $562,937,372, representing almost a quarter of California’s 20187 Revenues amount for the same year which is $2,836,408,308. New York was the closest to California with $2,032,289,000 in Revenues.
The breakdown of the Division’s funding and expenses is 80% for Administration and Regulation expenses and the remaining 20% covering Operational expenses.
A look at some of the Division’s 2018 numbers:
- Total Revenues: $$562,937,372
- Total Taxes: $381,888,550
- Fees & Assessments Collected: $179,610,896
- Fines and Penalties: $1,437,926
- Other Revenue: $0
Financial, Market Conduct Exams and Formal Hearings
The Massachusetts Division of Insurance completed 129 examinations last year, the most of any other state. Here is the breakdown of the type of exams conducted:
- Financial Only Exams: 8
- Market Conduct Exams: 121
- Combined Financial/Market Conduct Exams: 0
- Regulatory Actions Taken:
With regards to the Financial Only Exams, all of the companies examined were dones so statutorily and involved Domestic Insurers.
As for the Market Conduct Examinations, with 121 conducted during 2018, 23 of these examinations involved Domestic Insurers, while the remaining 98 involved Foreign Entities. As for whether these examinations were Statutory or Discretionary, 8 were Statutory with the reamining 113 examinations being Discretionary.
Only 1 Administrative Order was taken against an insurer in 2018 based upon the results of the preceding Market Conduct Examination.
Only one Formal Rate Hearing also occurred during this time period as well.
Insurance Producers
The NAIC states that as of 2018, a total of 9.46 million individuals and entities were
licensed to provide insurance services in the United States.
Massachusetts had a total of 134,152 Individual Licensed Producers in 2018. Of that number, 30,584 comprised Resident Producers while 103,568 were Non-Resident Producers.
There were 7,514 Licensed Business Entities Producers in 2018. Of that number, 2,411 were Licensed Producers while 5,103 represented Non-Resident Producers.
A breakdown of the number within each of the various categories of licensed producers:
- Licensed Producers: 141,666
- Surplus Lines Brokers: 2,940
- Bail Bonds: nothing reported
- Adjusters: 309
- Other: 6,175
Actions Against Producers
The Division imposed 435 fines against Producers in 2018, collecting a total of $359,650 for the year. There were also 20 Restitutions in 2018, resulting in $109,405.
As for particular actions the Division took against Licensed Producers, Massachusetts initiated no Suspensions, 14 License Revocations, 18 Cease & Desist Violations and no Denial Orders.
Consumer Complaints & Inquiries
With respect to consumer complaints, Massachusetts had 1,986 Consumer Complaints in 2018, once again significantly smaller than in other states such as New York with 36,794 complaints made in 2018 or California which once again received the highest number last year with 45,532 consumer complaints logged.
As for consumer inquires, Massachusetts received a total of 14,374 in 2017, a fraction of the number received by Florida, which had the highest number in the country with its Insurance Department receiving 297,456 inquiries during the same time period.
