ARIZONA STATE SENATE
Phoenix, Arizona
insurance
department; general fund recoupment
Requires the Department of Insurance (DOI) to levy fees and charges for various licensing activities and the annual assessment on insurers for operation of DOI’s Fraud Unit. Contains a Proposition 108 clause.
The Director of DOI is authorized to issue different charters and collect associated fees for the administrative costs of the issuance. Statute stipulates that the total amount of the next year’s fees collected is to be between 95 and 110 percent of the appropriated budget for the current fiscal year. S.B. 1162 seeks to comply with this requirement by authorizing the director to adjust the fees accordingly.
Current fee
ranges are inadequate to meet the appropriated budget percentage requirement.
According to DOI, in the near future, they will be unable to collect ninety
five percent of their appropriated budget through the current fee
structure. S.B. 1162 requires the
Director to revise the fee schedule every year in which the prior fiscal year
fees do not meet the threshold requirement for the current fiscal year and the
corresponding credits. The Director is required to adjust the fees such that
the fees collected in the subsequent year equals between 95 and 110 percent of
the current fiscal year budget. The
adjustments must be a uniform percentage across the fee categories.
According to DOI, there has been an increase in demand for the DOI’s Fraud Unit. As a result, DOI is seeking to increase the assessment levied on the insurance industry doing business in Arizona for the operation and administration of the Fraud Unit. Again, the Director is required to collect the assessments and the sum of the assessments collected must be between 95 and 110 percent of the appropriated budget of the Fraud Unit for the prior fiscal year.
According to the DOI, the insurance industry will experience a cost due to the provisions in this bill. However, the costs will not be uniform and cannot be discerned at this time.
Provisions
1. Requires DOI to levy fees and charges within established limits for various licensing activities.
2. Increases the annual assessment from $700 to $1050 for funding the DOI Fraud Unit.
3. Caps the premium tax credit collected by eligible domestic stock life or disability insurers at $680.
4. Requires the Director to adjust fees, charges and assessments within established ranges so that future collections equal between 95 and 110 percent of the current fiscal year budget for the Department.
5. Requires the Joint Legislative Budget Committee staff to analyze the correlation between the amount assessed by the Department and the actual costs of services provided and report to the Committee by October 1, 2002.
6. Authorizes the Legislature to review the fee schedule concurrently to reviewing DOI’s general fund appropriation.
7. Requires captive insurers pay issuance and renewal fees as prescribed by the Director.
8. Stipulates that the 95 to 110 percent requirement does not apply to the captive insurer program.
9. Changes the filing deadline for premium taxes from March 31 to March 1.
10. Prescribes definitions.
11. Makes numerous technical and conforming changes.
12. Becomes effective on signature of the Governor.
Amendments Adopted by Committee
·
Makes conforming change clarifying the intent of the
bill by lifting the fee cap associated with assessments for DOI's fraud unit.
Amendments Adopted by House of Representatives
1. Re-establishes fixed rate ranges within which the Director is permitted to adjust licensing and administrative fees.
2. Caps the premium tax credit collected by eligible domestic stock life or disability insurers at $680.
3. Eliminates the requirement that the Director submit rate revisions for review to the Joint Legislative Budget Committee.
4. Increases the annual assessment from $700 to $1050 for funding the DOI Fraud Unit.
5. Requires the Joint Legislative Budget Committee staff to analyze the correlation between the amount assessed by the Department and the actual costs of services provided and report to the Committee by October 1, 2002.
6. Becomes effective on signature of the Governor, except as otherwise noted.
Senate Action House
Action
BI 2/7/02 DPA 4-1-1-0 FII 4/10/02 DPA 10-0-0-3
3rd Read 3/18/02 20-8-2-0 APPROP 4/23/02 DPA 10-0-0-6
Final Read 5/9/02 21-6-3-0 3rd Read 5/6/02 45-12-3-0
Signed by Governor 5/15/02
Chapter 214
Prepared by Senate Staff
June 6, 2002