Filed Under:Your Practice, Regulatory

NAIC CEO search, recruitment ups budget for 2012, '13

CEO Terri Vaughan, Ph.D., steward of the NAIC--for now. Courtesy NAIC
CEO Terri Vaughan, Ph.D., steward of the NAIC--for now. Courtesy NAIC

The cost of recruiting expenses in the NAIC is over budget in 2012 and due to spike in 2013 due to the search for a new CEO to replace Therese (Terri) Vaughan, Ph.D, according to the organization’s proposed 2013 budget document.

The majority of the over budget variance in 2012 is directly related to the search for a new CEO, which is ongoing. The 2013 budget assumes additional expenses related to the CEO search and an increase in reliance on external recruiting services for the attraction of NAIC employees in 2013, the NAIC stated in its budget.

The projected expenses by year-end 2012 for recruitment and relocation are about $262,300. This is more than $100,000 over the anticipated 2012 budgeted amount of $131,600.

For 2013, the amount budgeted under the line item "recruiting and relocation" is $214,243, a 62.8 percent increase over the 2012 budget.

The NAIC proposed budget document stated that “recruiting agencies are used to fill open positions with qualified individuals with a unique/specific skill set and those at the higher levels of management within the association when standard methods of recruitment prove unsuccessful.”

As CEO, the insurance regulatory heavyweight presently oversees the operations of the NAIC, including offices in Kansas City, Washington, D.C., and New York City, and serves as the association’s primary representative and chief spokesperson in Washington. She also is an expert and old hand in the international supervisory arena.

It is unclear how long she will stay at the NAIC. In August, Vaughan announced she will step down as CEO during the first quarter of 2013. She cited family obligations and the desire to revise a textbook as reasons for leaving the post.

She was hired in February 2009. 

The NAIC base budget (before adding investment income, fiscal impact statements, and the structured securities project) reflects total revenues of $78.5 million and total expenses of $78.1 million, which represent a 3.86 percent increase and a .33 percent increase, respectively, from the 2012 budget. Viewed in relation to the 2012 projected totals, the 2013 proposal represents an operating revenue decrease of 1.75 percent and operating expense decrease of 3.82 percent, according to the NAIC. 

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