SB1162 - 452R - House Bill Summary

House of Representatives

SB 1162

insurance department; general fund recoupment

Sponsors: Senator Cirillo

DPA	Committee on Financial Institutions & Insurance
DPA	Committee on Appropriations
DPA	Caucus and COW
X	Third Read	This bill as introduced contains *a PROP 108 clause.*
	As Passed the House

SB 1162 adjusts the licensing fee schedules for the Department of Insurance in order to meet general fund recoupment requirements.

Current Status

SB 1162 was amended in the Financial Institutions and Insurance Committee to establish an effective date of July 1, 2002 for the sections of law referenced in the bill. An amendment to establish a cap on the licensing fee schedule was also adopted. The Appropriations Committee adopted an amendment requiring the Joint Legislative Budget Committee (JLBC) to conduct an analysis of the fee schedule and issue a report by October 1, 2002. The report shall analyze the actual costs of the services for which the fees are charged and discuss whether the fees are equitable. A substitute floor amendment to the Appropriations Committee amendment adding the analysis of premium taxes to the JLBC study was adopted in Committee of the Whole. A floor amendment placing a cap on document copy fees was also adopted. The Financial Institutions and Insurance and Rules Committee amendments were also adopted in Committee of the Whole.

History

The Department of Insurance (DOI) has a funding mechanism that requires the department to recoup between 95 and 110 percent of its appropriated budget from the fees it charges to producers, insurers, reinsurers and other fee payors. Current law also sets monetary ranges for each fee category. The department cannot raise fees beyond the top end of the current ranges. The current fee ranges have been in place since 1985. The department’s appropriation is established through the regular appropriations process. The department remits all collected fees to the general fund. As of July 1, 2001, the department began charging fees at the top end of the current statutory ranges. A continued trend could result in inadequate funding, causing an impact to the general fund. SB 1162 revises the schedule fee range and authorizes the director to increase fees when the fees received from the previous fiscal year do not meet the threshold requirements for the current fiscal year and the corresponding credits. The bill specifies that the Legislature may review the fee schedule at the time it considers DOI’s general fund appropriation.

Provisions

· Amends the adjusted fee schedule for the department. The bill consolidates other fees located in other sections of law into one fee schedule.

· Stipulates the fees are nonrefundable and shall not be prorated.

· Provides that if the fees collect during the previous fiscal year fall below the required 95%, or exceed 110% of the current fiscal year budget, the director shall revise the fee schedule on a uniform percentage basis among all fee categories.

· Stipulates that within thirty days of adjusting the schedule, a copy of the fee schedule must be supplied to the Joint Legislative Budget Committee. The Legislature may review the fee schedule at the time it considers the department’s general fund appropriation.

· Clarifies that the appropriated budget does not apply to the captive insurance program. Captive insurers must pay issuance and renewal fees as prescribed in rule by the Director.

· Changes the premium tax filing deadline from March 31^st to March 1^st ^for domestic insurers.

· Amends the annual assessment on insurers for the department’s fraud unit. Clarifies the intent of the bill by lifting the fee cap associated with assessments for DOI's fraud unit.

· Contains technical and conforming changes.

· Contains a proposition 108 clause.

SB 1162 was amended in the Financial Institutions and Insurance Committee as follows:

· Provide a delayed effective date of July 1, 2002 for sections of law referenced in the bill.

· Establish a cap on the licensing fee schedule.

SB 1162 was amended in the Appropriations Committee as follows:

· Requires the Joint Legislative Budget Committee to conduct an analysis of the fee schedule and issue a report by October 1, 2002. The report shall analyze the actual costs of the services for which the fees are charged and discuss whether the fees are equitable.

SB 1162 was amended in the Rules Committee as follows:

· Makes a technical change.

SB 1162 was amended in the Committee of the Whole as follows:

· Places a cap on document copy fees of not less than $.50 and no more than $.75.

· Amends the Appropriations Committee amendment to add the analysis of premium taxes to the JLBC study.

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· 45th Legislature