HB2075

House of Representatives

small employer reinsurance program; repeal

Sponsors: Representative Carpenter

X	Committee on Financial Institutions and Insurance
	Caucus and COW
	Third Read
	As Passed the House

HB 2075 repeals the Small Employer Reinsurance Program effective December 31, 2002 and contains provisions for phasing out the program and redirecting the assessment fund for voluntary plans.

History

The Small Employer Reinsurance Program (SERP) was created in 1993 in an effort to decrease the number of uninsured small employer groups through a guaranteed issue program. SERP was intended to spread risk by allowing carriers to reinsure lives that the carrier believed would produce excessive claims. All participating insurers are assessed for the losses of the program and for any administrative costs. Since its inception participation has decreased and currently only 18 out of 68 insurers participate. Of that group, only 3 have ceded 18 lives to the program. The department has also realized difficulty finding persons to serve on the board and obtaining bids for the administrative contracts.

Provisions

· Repeals SERP effective December 31, 2002.

· Establishes a separate fund for voluntary plans for the Joint Underwriting Association, which was previously consolidated with the SERP assessment fund.

· Requires the department to phase out the program through a plan of operation written by the SERP Board.

· Exempts the assessment fund from a lapsing appropriation.

· Contains other technical and conforming changes.

· ---------- DOCUMENT FOOTER ---------

· 45th Legislature