FISCAL NOTE

Date Requested: February 20, 2017
Time Requested: 09:07 AM
Agency: Risk and Insurance Management, Board of (BRIM)
CBD Number: Version: Bill Number: Resolution Number:
2509 Introduced HB2004
CBD Subject: Finance and Administration


FUND(S):

2360

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 indicates that the Board of Risk and Insurance Management (BRIM) shall issue a vehicle specific insurance card to each state vehicle insured by the state that includes, at a minimum, the vehicle identification number, the year, make and model, the date the insurance card was issued, and the name and address of the spending unit. Additional administrative costs for the Board of Risk and Insurance Management will result from the additional information that must be gathered and maintained, and the coordination and dissemination of related information with other state agencies and spending units impacted by the proposed legislation, including the Fleet Management Office, Division of Motor Vehicles, the Enterprise Resource Planning Board and the spending unit Fleet Coordinators.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 7,500 5,000
Personal Services 0 0 0
Current Expenses 0 7,500 5,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 7,500 5,000


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


    Estimated increase is for administrative expenses related to additional activities required to gather the initial information mandated by the legislation. Additional expenses will also be incurred to maintain the information and to coordinate with the Fleet Management Office, Division of Motor Vehicles, the Enterprise Resource Planning Board and the spending unit Fleet Coordinators for any changes in the information for vehicle purchases or retirements. Additional costs will be incurred to print, distribute and maintain the insurance cards required for each insured vehicle. Additional administrative expenses will likely be recovered by corresponding increases in premiums to insured spending units.



Memorandum


    The bill seems to incorporate employees’ personal vehicles, which are being used on state business and for which reimbursement is paid, within the definition of a ‘state vehicle’. If these vehicles are included, our insurance may be called upon to address not only liability claims (which we currently insure on an excess basis) but also physical damage claims for the damaged auto. Each claim will require an interpretation of each employee’s personal auto policy to determine which policy is primary and which is excess, or whether the claim is handled on a pro-rata basis. We currently lack the information necessary to determine how many vehicles we would be called upon to insure, what type of vehicle they are, how they are being used and what additional exposures we would be asked to insure. We could also see an increase in the cost of handling these claims due to the level of additional work which will be required.
    
    
    The proposed legislation could substantially increase the cost of providing additional insurance coverage for personal vehicles not owned by the state but that are used for state business but the use of which is paid for with public funds, regardless of the source of such funding. BRIM does not currently maintain any exposure data related to the additional coverage that is implied by the proposed legislation. As a result, an estimate of the projected increase in costs and expenses for the current fiscal year, or any subsequent fiscal year, cannot reasonably be determined or estimated for the additional insurance coverage anticipated and the associated increase in program costs.



    Person submitting Fiscal Note: Stephen Schumacher
    Email Address: stephen.w.schumacher@wv.gov