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 for various licensing activities.
2. Requires DOI establish the annual assessment on insurers for operation of the Department’s Fraud Unit.
3. Requires the Director to adjust fees, charges and assessments so that future collections equal between 95 and 110 percent of the current fiscal year budget for the Department or Unit, as appropriate.
4. Requires the Director to provide a copy of the revised fee schedule and supporting calculations to the Joint Legislative Budget Committee.
5. Authorizes the legislature to review the fee schedule concurrently to reviewing DOI’s general fund appropriation.
6. Requires captive insurers pay issuance and renewal fees as prescribed by the Director.
7. Stipulates that the 95 – 110 percent requirement does not apply to the Captive Insurer program.
8. Changes the filing deadline for premium taxes from March 31st to March 1st.
9. Prescribes definitions.
10. Makes numerous technical and conforming changes.
11. Contains a proposition 108 clause.
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.
Senate Action
BI 2/7/02 DPA 4-1-1-0
Prepared by Senate Staff
February 8, 2002