Fiscal Note - 5527 SB Insurance Policy Sublimits of Coverage, Office of Insurance Commissioner (01/13/2022)
Summary
Individual State Agency Fiscal Note for Bill Number 5527 SB, Insurance Policy Sublimits of Coverage, from Agency 160-Office of Insurance Commissioner, with an OFM Review date of 01/13/2022. Part I lists Estimated Cash Receipts as NONE and Estimated Operating Expenditures from the Insurance Commissioners Regulatory Account-State, with a Total of 35,838 in FY 2023 and in 2021-23 and 10,932 in each of 2023-25 and 2025-27. The narrative says Section 1(5) requires the declarations page on residential policies to include a listing of all sublimits of coverage within the insurance policy, and that the entire declarations page must be delivered to the insured at every policy renewal.
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“Fiscal Note - 5527 SB Insurance Policy Sublimits of Coverage, Office of Insurance Commissioner (01/13/2022).”
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Individual State Agency Fiscal Note
Bill Number: 5527 SB Title: Insurance Policy Sublimits of Coverage 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 0.0 0.3 0.2 0.0 0.0
Account
Insurance Commissioners Regulatory 0 35,838 35,838 10,932 10,932
Account-State 138-1
Total $ 0 35,838 35,838 10,932 10,932
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
form Parts I-V.
X 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.
Requires new rule making, complete Part V.
Legislative Contact: Kellee Gunn Phone: 786-7429 Date: 01/05/2022
Agency Preparation: Michael Walker Phone: 360-725-7036 Date: 01/11/2022
Agency Approval: Mark Dietzler Phone: 360-725-7106 Date: 01/11/2022
OFM Review: Jason Brown Phone: (360) 742-7277 Date: 01/13/2022
Form FN (Rev 1/00) 170,525.00 Request # 22-08-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 5527 SB
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(5) requires the declarations page on residential policies to include a listing of all sublimits of coverage within the
insurance policy, including any endorsements, and show either the amount of coverage, the percentage of coverage, or
both, that is being limited below the overall policy coverage limits. The entire declarations page must be delivered to the
insured at every policy renewal.
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(5) requires the declarations page on residential policies to include a listing of all sublimits of coverage within the
insurance policy, including any endorsements, and show either the amount of coverage, the percentage of coverage, or
both, that is being limited below the overall policy coverage limits. The entire declarations page must be delivered to the
insured at every policy renewal.
All insurers issuing residential property policies will be required to make a one-time filing of their amended declarations
page. There are currently 130 insurers issuing approximately 200 residential policies each year. In FY2023, one-time
costs of two hours of review time per declaration page filing, or a total of 400 hours (2 hours x 200 filings), of a
Functional Program Analyst 3 will be required.
OIC also anticipates one additional enforcement action each year to address the new sublimit provisions. Investigations
generally take anywhere between 25-80 hours per case and enforcement actions require the equivalent of approximately
25-80 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 25 hours of an Investigator 3
and 25 hours of an Insurance Enforcement Specialist beginning in FY2023.
Ongoing costs:
Salary, benefits and associated costs for .02 FTE Investigator 3 and .02 FTE Insurance Enforcement Specialist.
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 0 35,838 35,838 10,932 10,932
Commissioners
Regulatory Account
Total $ 0 35,838 35,838 10,932 10,932
Insurance Policy Sublimits of Coverage 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 170,525.00 Request # 22-08-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 5527 SB
III. B - Expenditures by Object Or Purpose
FY 2022 FY 2023 2021-23 2023-25 2025-27
FTE Staff Years 0.3 0.2 0.0 0.0
A-Salaries and Wages 20,988 20,988 6,498 6,498
B-Employee Benefits 7,682 7,682 2,248 2,248
C-Professional Service Contracts
E-Goods and Other Services 7,168 7,168 2,186 2,186
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 $ 0 35,838 35,838 10,932 10,932
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 0.3 0.1
Insurance Enforcement Specialist 87,852 0.0 0.0 0.0 0.0
Investigator 3 74,604 0.0 0.0 0.0 0.0
Total FTEs 0.3 0.2 0.0 0.0
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
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
Insurance Policy Sublimits of Coverage 160-Office of Insurance Commissioner
Form FN (Rev 1/00) 170,525.00 Request # 22-08-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 5527 SB
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