COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.: 2125-02

Bill No.: Perfected HCS for HB 866

Subject: Insurance - General; Insurance Dept.

Type: Original

Date: April 21, 2005

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 4 pages.

ASSUMPTION

Officials from the Office of State Courts Administrator and Department of Insurance assume the proposal will have no fiscal impact on their organizations.

Officials from the Office of Attorney General assume any potential costs arising from this proposal can be absorbed with existing resources.

Officials from the Office of Prosecution Services (OPS) did not respond to our request for a statement of fiscal impact. However, in response to an earlier version of this proposal, the OPS states the proposal will not have a significant direct fiscal impact on county prosecutors.

Officials from the Department of Corrections (DOC) did not respond to our request for a statement of fiscal impact. However, in response to the previous version of this proposal, the DOC stated the DOC cannot predict the number of new commitments which may result from the creation of the offenses(s) outlined in this proposal. An increase in commitment depends on the utilization by prosecutors and the actual sentences imposed by the court.

If additional persons are sentenced to the custody of the DOC due to the provisions of this legislation, the DOC will incur a corresponding increase in operational cost through either incarceration (FY 04 average of $38.37 per inmate per day or an annual cost of $14,005 per inmate) or through supervision provided by the Board of Probation and Parole (FY 03 average of $3.15 per offender, per day or an annual cost of $1,150 per offender per year).

ASSUMPTION (continued)

The DOC assumes the narrow scope of the crime will not encompass a large number of offenders. The low felony status of the crime enhances the possibility of plea-bargaining or the imposition of a probation sentence. The probability also exists that offenders would be charged with a similar but more serious offence of that sentences may run concurrent to one another.

Supervision by the DOC through probation or incarceration would result in some additional costs, but it is assumed the impact would be $0 or a minimal amount that could be absorbed within existing resources.

Officials from the Office of State Public Defender (SPD) did not respond to our request for a statement of fiscal impact. However, in response to the previous version of this proposal, the SPD assumed the proposal would have no fiscal impact on their organization.

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

This proposal specifies that it is illegal for any person to employ a fraudulent scheme or make a false statement or concealment of a material fact relating to an insurance transaction. The person can be fined not more than $100,000, be imprisoned for not more than 10 years, or both. A court may also order that restitution be paid to the victim of twice the loss due to the offense and the Department of Insurance revoke the offender's insurance license.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Office of Attorney General

Office of State Courts Administrator

Department of Insurance

NOT RESPONDING: Department of Corrections, Office of Prosecution Services and

Office of State Public Defender

Mickey Wilson, CPA

Director

April 21, 2005