FISCAL NOTE

Date Requested: February 10, 2016
Time Requested: 01:54 PM
Agency: Insurance Commission
CBD Number: Version: Bill Number: Resolution Number:
2609 Introduced SB566
CBD Subject: Insurance, Taxation


FUND(S):

7152

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.


If enacted, Senate Bill 566 would require the OIC to hire one additional FTE in order to review all accident and sickness insurance carriers in order to ascertain if they meet the criteria to pay the additional tax as set forth in SB566. If the carrier qualifies to pay the tax, then the additional FTE would also need to review the reserve balances and determine if the appropriate amount of tax has been paid by the carrier.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 36,750 36,750 36,750
Current Expenses 5,000 5,000 36,750
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


Estimates are calculated as follows: One additional FTE at a cost of $36,750 for salary and benefits. Estimated $5000.00 for computer equipment, training, and general overhead.



Memorandum


If enacted, Senate Bill 566 would impose an additional tax of 2.5% on reserve balances of all not-for-profit private accident and sickness insurance carriers operating in West Virginia regulated under §33-3-34 The OIC believes that very few of the private accident and sickness carriers will actually meet the two-fold criteria set forth in SB566 as currently drafted. Based on the initial review by the OIC, insurance carriers covering 77% of the accident and sickness insurance market in WV would not be required to pay the tax due to failure to meet the criteria. As of the filing of this note, the OIC has not reviewed all of the Accident & Sickness insurance carriers to determine if they meet the criteria as private, not-for-profit and subject to §33-3-34, however after reviewing all of those with a significant portion of the market we have not found any that would be impacted by the proposed tax, so we do not offer an estimate of revenue to be generated from SB566 at this time.



    Person submitting Fiscal Note: Melinda Kiss
    Email Address: Melinda.Kiss@wvinsurance.gov