COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         4351-01

Bill No.:          HB 1671

Subject:           Insurance - General; Insurance Dept.

Type:              Original

Date:               February 19, 2008

Bill Summary:           Requires the Director of the Department of Insurance, Financial Institutions and Professional Registration to establish by rule uniform insurance application forms.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 4 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Social Services assume the proposal will have no fiscal impact on their organization.

Officials from the Office of Secretary of State (SOS) state the fiscal impact for this proposal for Administrative Rules is less than $2,500. The SOS does not expect that additional funding would be required to meet these costs. However, the SOS also recognizes that many such bills may be passed by the General Assembly in a given year and that collectively the costs may be in excess of what the SOS can sustain within its core budget. Therefore, the SOS reserves the right to request funding for the costs of supporting administrative rules requirements should the need arise based on a review of the finally approved bills signed by the Governor.

Officials from the Department of Insurance, Financial Institutions and Professional Registration (DIFP) estimate 109 insurers would be required to submit amendments to their policies to comply with the legislation. Policy amendments must be submitted to the DIFP for review along with a $50 filing fee. One-time additional revenues to the Insurance Dedicated Fund are estimated to be up to $5,450 (109 insurers X $50).

Additional staff and expenses are not being requested with this single proposal, but if multiple proposals pass during the legislative session that require policy form reviews, the DIFP will need to request additional staff to handle the increase in workload.

The proposal will result in an increase in total state revenue.

FISCAL IMPACT - Small Business

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

FISCAL DESCRIPTION

This proposal requires the Director of the Department of Insurance, Financial Institutions, and Professional Registration to establish by rule uniform insurance application forms to be used

by all insurers.

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

Department of Insurance, Financial Institutions and Professional Registration

Department of Social Services

Office of Secretary of State

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                February 19, 2008