As State Deficits Loom, Regulators Tighten Belts

The department has not yet had to cut staff, and it has no current plans to lay off employees or shut down programs or offices, Neustadt says.

But "given the current budget situation and how dire it continues to be–we are extremely conscious of spending," he says.

The department sent a half to a third as many representatives to the winter 2008 NAIC meeting as it sent to prior meetings, Neustadt says.

New York Gov. David Patterson has proposed that unions forego a 3% increase and delay receiving a week's pay. Some of the insurance department's employees are union employees, Neustadt says.

Like the Connecticut and New York departments, the California departments uses a separate fund, rather than the state's general fund, to finance its operations, according to Darrell Ng, a spokesman for the California department.

Policy fees generate the revenue that goes into the department fund, Ng says.

The department is subject to furloughs and salary reductions, Ng reports.

The salary reductions are expected to be 10% of an employee's salary, depending on the state classification of that employee, Ng says.

Because the department is not funded through the general fund, there is not a moratorium on travel, and employees who need to attend NAIC meetings can still attend the meetings, Ng says.

A spokesman for the Massachusetts department says that the department is funded with industry assessments.

The department has $12 million annual budget and generates $112 million in annual revenue, the spokesman says.

Massachusetts is still asking the department and other agencies to contribute 7% of their budgets to help balance the state budget, but the funding shift will not affect travel to NAIC meetings, the spokesman says.