This is the 36th Edition of the NAIC Annual Report
The National Association of Insurance Commissioners (“NAIC”) has published its annual Insurance Department Resources Report (IDRR). Divided into two separate “Volumes”, the report has been published annually for the past 36 years.
Key focus of Volume 1
The IDRR uses data culled from extensive data obtained from NAIC member states. The first of the two-volume report focuses on the resources and regulatory activities of the 56 NAIC-member jurisdictions including the 50 states, in addition to U.S. territories like Guam and Puerto Rico. The report is organized into five different sections: Staffing, Budget and Funding; Examination and Oversight; Insurance Producers; and Consumer and Antifraud.
Key facts from this year’s report
Some of the highlights from this year’s survey of NAIC members revealed the following:
- There were 5,965 domestic U.S. insurers in 2022, as compared to 5,978 in 2021.
- Revenues collected increased 9.8% to $32.7 billion in 2022.
- State insurance departments received 282,567 official complaints and 1.5 million inquiries.
Total Number of Domestic Insurers & Regulated Entities in Massachusetts
The chart below illustrates the number of Domestic Insurers there are in each state throughout the country as of 2022. Focusing on New England, Massachusetts had a total of 84 Domestic Insurers, one more than in 2021 and up from 78 in 2020. Vermont, Connecticut, and Maine each increased in the number of domestic insurers by one, with 108. 103, and 23 respectively, while New Hampshire and Rhode Island’s counts remained the same at 57 and 30.
Trend of Domestic Insurers over the years
The following data from the NAIC’s IDRR report shows the overall trend in the number of domestic insurers across the country since 2014.
A Spotlight on New England insurance industry
Turning the to the size and scope of domestic and insurers in both Massachusetts and New England, Agency Checklists has reviewed the IDRR to compile the following graphs which break down the numbers between domestic and foreign insurers in each of the six New England states.
Domestic Insurers in both Massachusetts & New England by type:
| DOMESTIC INSURER TYPE | MA | VT | NH | ME | CT | RI |
|---|---|---|---|---|---|---|
| Life/Annuities | 16 | 1 | 0 | 3 | 26 | 1 |
| Property/Casualty | 47 | 11 | 47 | 11 | 64 | 20 |
| Health | 18 | 5 | 10 | 9 | 10 | 8 |
| Fraternal | 2 | 0 | 0 | 0 | 1 | 0 |
| Title | 1 | 1 | 0 | 0 | 0 | 0 |
| Risk Retention Group | 0 | 83 | 0 | 0 | 2 | 0 |
| Other | 0 | 7 | 0 | 0 | 0 | 1 |
Foreign Insurers in both Massachusetts & New England by type:
| FOREIGN INSURER TYPE | MA | VT | NH | ME | CT | RI |
|---|---|---|---|---|---|---|
| Life/Annuities | 376 | 351 | 328 | 348 | 353 | 387 |
| Property/Casualty | 760 | 758 | 760 | 757 | 775 | 792 |
| Health | 8 | 20 | 41 | 6 | 3 | 11 |
| Fraternal | 26 | 15 | 17 | 13 | 35 | 27 |
| Title | 20 | 17 | 19 | 21 | 21 | 18 |
| Risk Retention Group | 117 | 55 | 92 | 91 | 104 | 91 |
| Other | 131 | 37 | 0 | 91 | 0 | 53 |
2023/2024 Insurance Department Budgets
The Massachusetts Division of Insurance is funded 100 percent by a combination of fees and assessments. For the upcoming year, the projected 2024 budget for the Division is $19,000,000, placing it as the 27th largest state budget. Connecticut is 17th with a slated 2024 budget of $36,152,373. New Hampshire is 40th with a projected budget of $13,829,702, followed by Maine ranked 43rd with a budget of $12,021,357 and Vermont ranked 44th with a budget of $11,512,673.
For comparison purposes, the 10 states with the largest insurance department budgets are as follows (in descending order of their 2024 Budget):
| 2024 RANK | STATE | BUDGET | 2023 RANK |
|---|---|---|---|
| 1. | California | $259,319,000 | 1 |
| 2. | New York | $184,972,000 | 2 |
| 3. | Texas | $138,408,305 | 3 |
| 4. | Illinois | $87,328,400 | 8 |
| 5. | Florida | $83,377,779 | 5 |
| 6. | Alabama | $77,135,968 | 6 |
| 7. | New Jersey | $76,299,000 | 7 |
| 8. | North Carolina | $54,059,587 | 4 |
| 9. | Arizona | $43,923,243 | 10 |
| 10. | Ohio | $43,316,669 | 9 |
Revenues, Fees, Fines & Penalties for Massachusetts and the other New England states
The Massachusetts Division of Insurance had revenues totaling $752,927,248 in 2022 as compared to $634,799,685 in 2021. The breakdown of the Division’s funding and expenses is 80% for Administration and Regulation expenses and the remaining 20% covering Operational expenses.
The following is a look at the most recent revenue numbers for both Massachusetts and the other New England states (Rhode Island’s budget did not appear in the IDRR list for this section):
| REVENUES | MA | VT | NH | ME | CT |
|---|---|---|---|---|---|
| Total Revenues | $752,927,248 | $113,520,604 | $154,934,863 | $151,475,295 | $223,230,509 |
| Total Taxes | $496,242,752 | $62,655,983 | $126,526,378 | $107,371,503 | $79,205,680 |
| Fees & Assessments Collected | $256,624,141 | $50,545,871 | $27,949,089 | $24,323,022 | $140,943,265 |
| Fines & Penalties | $60,355 | $318,750 | $459,396 | $189,800 | $3,081,564 |
| Other Revenue | $0 | $0 | $0 | $19,590,970 | $0 |
Financial, Market Conduct Examinations and Formal Hearings
According to the IDRR “…[f]inancial examinations investigate a company’s accounting methods, procedures and financial statement presentation.” Alternatively, market conduct examinations include reviewing “…agent licensing issues, complaints, types of products sold by the company and/or agents, agent sales practices, rating practices, claims handling, and other market-related aspects of an insurer’s operation.”
The following is a listing of all the market conduct and financial examinationss undertaken by the insurance departments of each New England state during 2022.
| MA | VT | NH | ME | CT | RI | |
|---|---|---|---|---|---|---|
| Financial Examinations Only |
20 | 17 | 5 | 4 | 9 | 3 |
| Market Conduct Examinations Only | 6 | 0 | 2 | 0 | 45 | 3 |
| Combined Financial/Market Conduct Examinations | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Examinations Completed | 26 | 17 | 7 | 4 | 54 | 6 |
Insurance Producers
Licensed Producers
A total of 12.5 million individuals (and entities) were licensed to sell insurance in the U.S. during the year 2022. These include Producers, Surplus Lines Brokers, Bail Bonds, and adjusters. As for New England, the following graphs show how many of these producers were in New England over the past year.
| Individuals | MA | VT | NH | ME | CT | RI |
|---|---|---|---|---|---|---|
| Resident | 29,592 | 1,925 | 6,617 | 7,712 | 20,298 | 5,537 |
| Non-Resident | 152,079 | 71,377 | 110,380 | 216,617 | 150,231 | 107,691 |
| Total | 181,671 | 73,302 | 116,997 | 224,329 | 170,529 | 113,228 |
| Business Entities | MA | VT | NH | ME | CT | RI |
|---|---|---|---|---|---|---|
| Resident | 2,120 | 156 | 532 | 824 | 1,620 | 350 |
| Non-Resident | 6,023 | 4,833 | 7,148 | 7,618 | 9,749 | 4,488 |
| Total | 8,143 | 4,989 | 7,680 | 8,442 | 11,369 | 4,838 |
Licensed Producers/Adjusters
| MA | VT | NH | ME | CT | RI | |
|---|---|---|---|---|---|---|
| Producers | 224,329 | 73,302 | 116,997 | 224,329 | 181,898 | 114,531 |
| Surplus Lines Brokers | 2,502 | 73 | 3,436 | 2,502 | 3,482 | 2,409 |
| Bail Bonds | 0 | 12 | 0 | 0 | 229 | 0 |
| Adjusters | 20,029 | 82,305 | 99,287 | 20,029 | 120,321 | 96,817 |
| Other | 0 | 70 | 0 | 0 | 2,160 | 2,972 |
Actions Against Producers
| MA | VT | NH | ME | CT | RI | |
|---|---|---|---|---|---|---|
| Number of Fines | 5 | 1 | 16 | 1 | 6 | 2 |
| Amount of Fines | $5,500 | $65,750 | $382,000 | $750 | $16,000 | $8,000 |
| Number of Restitutions | 0 | 0 | 5 | 0 | 0 | 0 |
| Amount of Restitution | $0 | $0 | $108,787 | $0 | $0 | $0 |
| Other | 0 | 0 | 1 | 0 | 2 | 1 |
Consumer Complaints & Inquiries
In addition to the above information, the NAIC also tracks the number of consumer complaints and inquiries state insurance departments have received over the course of the year. The following is a breakdown of the complaints for Massachusetts as well as for the rest of New England during 2022:
| NEW ENGLAND STATE | CONSUMER COMPLAINTS | CONSUMER INQUIRIES |
|---|---|---|
| Massachusetts | 2,079 | 5,623 |
| Connecticut | 3,941 | 12,993 |
| Maine | 499 | 4,313 |
| New Hampshire | 929 | 4,310 |
| Rhode Island | 341 | 1,109 |
| Vermont | 353 | 2,187 |
