Fiscal Note - 1351 HB Insurance/credit exceptions (Office of Insurance Commissioner)
Summary
Individual state agency fiscal note for bill 1351 HB, titled Insurance/credit exceptions, from the Office of Insurance Commissioner. Part I estimates expenditures from the Insurance Commissioners Regulatory Account-State of 157,718 in FY 2022 and 23,551 in FY 2023, with 1.1 FTE staff years in FY 2022 and 0.2 in FY 2023. The narrative describes provisions requiring an insurer that uses credit information, on written request, to provide reasonable exceptions for a consumer whose credit information has been directly influenced by extraordinary life circumstances. It states that OIC assumes it would hold a series of stakeholder meetings and solicit feedback on multiple stakeholder rule drafts.
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“Fiscal Note - 1351 HB Insurance/credit exceptions (Office of Insurance Commissioner).”
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Individual State Agency Fiscal Note
Bill Number: 1351 HB Title: Insurance/credit exceptions Agency: 160-Office of Insurance
Commissioner
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
FY 2022 FY 2023 2021-23 2023-25 2025-27
FTE Staff Years 1.1 0.2 0.6 0.2 0.2
Account
Insurance Commissioners Regulatory 157,718 23,551 181,269 47,102 47,102
Account-State 138-1
Total $ 157,718 23,551 181,269 47,102 47,102
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
X Requires new rule making, complete Part V.
Legislative Contact: Kellee Gunn Phone: 786-7429 Date: 01/25/2021
Agency Preparation: David Forte Phone: 360-725-7042 Date: 01/28/2021
Agency Approval: Bryon Welch Phone: 360-725-7037 Date: 01/28/2021
OFM Review: Jason Brown Phone: (360) 742-7277 Date: 01/28/2021
Form FN (Rev 1/00) 163,329.00 Request # 21-26-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1351 HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or
expenditure impact on the responding agency.
Section 1(7)(a) and 2(5)(a) require an insurer that uses credit information, upon written request from an applicant
for insurance coverage or an insured, to provide reasonable exceptions to the insurer’s rates, rating
classifications, company or tier placement or underwriting rules or guidelines for a consumer who has
experienced and whose credit information has been directly influenced by extraordinary life circumstances.
Sections 1(7)(d) and 2(5)(d) requires insurers to provide notice to consumers that reasonable exceptions are
available and information about how the consumer may inquire further.
Section 1(8) and 2(6) authorize the Office of Insurance Commissioner to adopt rules.
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section
number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the
method by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time
and ongoing functions.
Section 1(7)(a) and 2(5)(a) require an insurer that uses credit information, upon written request from an applicant
for insurance coverage or an insured, to provide reasonable exceptions to the insurer’s rates, rating
classifications, company or tier placement or underwriting rules or guidelines for a consumer who has
experienced and whose credit information has been directly influenced by extraordinary life circumstances. The
burden is on consumers to request the premium relief and provide documentation to demonstrate the life event
had direct and meaningful impact on their credit information. The request for premium relief may or may not be
accepted by the insurer. If consumers do not receive the results they want, it is anticipated they will file a
complaint with the Office of Insurance Commissioner (OIC). Electronic complaints take an average of 2 hours
and phone complaints take an average of 10 minutes to resolve. The OIC assumes there will be an additional 56
electronic and 128 phone complaint cases filed each year requiring a total of 133 hours (56 electronic cases x 2
hours + 128 phone cases x 10 minutes) of a Functional Program Analyst 3 (FPA3) (100 hours) and Functional
Program Analyst 4 (FPA4) (33 hours) each year beginning in FY2022.
Sections 1(7)(d) and 2(5)(d) requires insurers to provide notice to consumers that reasonable exceptions are
available and information about how the consumer may inquire further. The OIC expects that this notice will
necessitate some type of form filing, such as a standardized consumer notice so that one notice could be used
across all affected lines of an insurer’s business. The OIC assumes a one-time filing influx by 420 companies
that will require 20 minutes each to review requiring a total of 140 hours of a FPA3 (93 hours) and FPA4 (47
hours) in FY2022. OIC additionally anticipates 3 enforcement cases a year to address whether the notice was
provided to the consumer. Investigations generally take anywhere between 25-80 hours per case and
enforcement actions require the equivalent of approximately 25 hours per case. For purposes of this fiscal note, it
is assumed that investigations will require an average of 25 hours per case and enforcement actions will require
an average of 25 hours per case requiring 75 hours of an Investigator 3 and 75 hours of an Insurance Enforcement
Specialist beginning in FY2022.
Insurance/credit exceptions 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 163,329.00 Request # 21-26-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1351 HB
Section 1(8) and 2(6) authorize the Office of Insurance Commissioner (OIC) to adopt rules. Due to the fact that
the rulemaking would provide regulations around certain discretions allowed of the insurance company and
undefined terms in the bill language, ‘complex’ rulemaking will be required in FY2022. OIC assumes that it
would hold a series of stakeholder meetings, solicit feedback on multiple stakeholder rule drafts, and define a
number of terms from the bill language into administrative code.
Ongoing costs:
Salary, benefits and associated costs for .06 FTE Functional Program Analyst 3; .02 FTE Functional Program
Analyst 4; .05 FTE Investigator 3; and .05 FTE Insurance Enforcement Specialist beginning in FY2022.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
Account Account Title Type FY 2022 FY 2023 2021-23 2023-25 2025-27
138-1 Insurance State 157,718 23,551 181,269 47,102 47,102
Commissioners
Regulatory Account
Total $ 157,718 23,551 181,269 47,102 47,102
III. B - Expenditures by Object Or Purpose
FY 2022 FY 2023 2021-23 2023-25 2025-27
FTE Staff Years 1.1 0.2 0.6 0.2 0.2
A-Salaries and Wages 93,609 13,803 107,412 27,606 27,606
B-Employee Benefits 32,565 5,038 37,603 10,076 10,076
C-Professional Service Contracts
E-Goods and Other Services 31,544 4,710 36,254 9,420 9,420
G-Travel
J-Capital Outlays
M-Inter Agency/Fund Transfers
N-Grants, Benefits & Client Services
P-Debt Service
S-Interagency Reimbursements
T-Intra-Agency Reimbursements
9-
Total $ 157,718 23,551 181,269 47,102 47,102
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
Job Classification Salary FY 2022 FY 2023 2021-23 2023-25 2025-27
Functional Program Analyst 3 70,956 0.1 0.1 0.1 0.1 0.1
Functional Program Analyst 4 78,408 0.2 0.0 0.1 0.0 0.0
Insurance Enforcement Specialist 87,120 0.1 0.1 0.1 0.1 0.1
Investigator 3 72,432 0.1 0.1 0.1 0.1 0.1
Senior Policy Analyst 91,896 0.7 0.3
Total FTEs 1.1 0.2 0.6 0.2 0.2
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
Insurance/credit exceptions 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 163,329.00 Request # 21-26-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1351 HB
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and describe potential financing methods
NONE
IV. D - Capital FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part IVB
NONE
Part V: New Rule Making Required
Identify provisions of the measure that require the agency to adopt new administrative rules or repeal/revise existing rules.
Section 1(8) and 2(6) authorize the Office of Insurance Commissioner (OIC) to adopt rules. Due to the fact that the
rulemaking would provide regulations around certain discretions allowed of the insurance company and undefined terms in
the bill language, ‘complex’ rulemaking will be required in FY2022. OIC assumes that it would hold a series of stakeholder
meetings, solicit feedback on multiple stakeholder rule drafts, and define a number of terms from the bill language into
administrative code.
Insurance/credit exceptions 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 163,329.00 Request # 21-26-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 1351 HB
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