FISCAL NOTE
Date Requested: January 26, 2015
Time Requested: 10:14 AM |
| Agency: |
Risk and Insurance Management, Board of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1562 |
Introduced |
SB317 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
2306 - State Special Insurance Fund
Sources of Revenue:
Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The proposed legislation would require the WV State Board of Risk and Insurance Management (BRIM) to conduct routine, periodic appraisals of state buildings and contents. BRIM would need to schedule the appraisals and coordinate and maintain the related property and contents values and associated attributes based on the appraisal results. Specialized appraisal services may also be required for unusual contents such as artwork and historical artifacts. The property and content dollar values are used in various processes such as property rates, actuarial projections and excess property coverage premium costs. Additional costs will be incurred by BRIM for the appraisal services, additional personnel needed to coordinate, review and maintain the additional data generated. Increases in excess coverage costs would also result from the increases in total insured values. These would be ongoing annual costs and expenses. The combined additional costs and expenses would need to be reflected in the property rates charged to all state agencies so that the additional costs incurred can be recovered through the property premiums billed to state agencies. The passage of this legislation would increase costs to State of West Virginia in the amount of $363,500.00 per year once fully implemented.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2015
Increase/Decrease
(use"-") |
2016
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
317,500 |
363,500 |
| Personal Services |
0 |
70,000 |
70,000 |
| Current Expenses |
0 |
187,500 |
187,500 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
60,000 |
60,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Increase in personnel expenses are the estimated cost of hiring an additional underwriter in FY’16 to coordinate the appraisal services and review appraisal reports and oversee the updating the insured values.
Increase in current expenses represents the estimated cost of contracting out the appraisal services to be performed on a five year cycle.
Increase in other expenses is the estimated cost of additional excess property premium incurred as a result of the impact on total insured values that are rated by the excess carrier.
The total increased costs to the State of West Virginia is $363,500.00 for the costs of additional staff at the Board of Risk and Insurance Management, the cost of contracting for appraisal services, and the increased premium amounts on all state agencies.
Memorandum
Please note that this fiscal note only applies to the State of West Virginia. It would also have a fiscal impact to SB 3 entities as well, which would include some municipalities, counties and county boards of education. They were not included in our cost estimates as their coverage through the Board of Risk and Insurance Management is optional.
Person submitting Fiscal Note: Donna Lipscomb Spano
Email Address: donna.m.lipscombspano@wv.gov