FISCAL NOTE
Date Requested: January 23, 2020
Time Requested: 02:06 PM |
| Agency: |
Insurance Commission |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1730 |
Introduced |
HB4502 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
7152
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
If enacted, House Bill 4502 will amend the licensure requirements for company, independent and public insurance adjusters.
The Offices of the Insurance Commissioner (OIC) estimates that the passage of HB 4502 will have a net positive fiscal impact of $215,000 per year to the offices of the Insurance Commissioner.
The OIC estimates that the increased revenue from issuing the adjuster licenses in accordance with HB 4502 will approximate $270,000.
The OIC further estimates that the agency will require one additional FTE at a cost of approximately $55,000 per year.
The net fiscal impact to the OIC is a positive $215,000.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
55,000 |
| Personal Services |
0 |
0 |
52,000 |
| Current Expenses |
0 |
0 |
3,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
270,000 |
Explanation of above estimates (including long-range effect):
The Licensing and Education Division currently monitors and tracks 34,802 licensing adjusters in West Virginia. The projected number of adjusters prior to the annual expiration date of May 31st is estimated to be 36,000 based on trending. If House Bill 4502 is enacted this will create a biennium adjuster renewal period and a new workers’ compensation adjuster line of authority.
If 30% of company adjusters (please note: this is a conservative estimate) need to maintain an existing independent adjuster property and casualty line of authority and obtain a new workers’ compensation line of authority this could increase revenue for the OIC as such:
• 36,000 x 30% = 10,800 new license types. Each new license type generates $50 fee every two years. Estimated increase in revenue or $540,000 each biennium or $270,000 annually.
The Licensing and Education Division will require one (1) additional full time employee (FTE) to regulate and process the increase in applications.
All resident adjusters will be required to complete continuing education requirements and be fingerprinted. These proposed changes will add considerable time to processing resident adjuster applications. Non-resident applications will also increase due to adjusters needing the new workers’ compensation adjuster class.
The existing licensing and education vendors are responsible for programming, testing, and tracking continuing education. The vendors will absorb the program (IT) changes at no additional cost to the OIC. This programing and test set up by various vendors will take a minimum of 9 months to establish.
Memorandum
If enacted, House Bill 4502 will amend the licensure requirements for company, independent and public insurance adjusters.
The Offices of the Insurance Commissioner (OIC) estimates that the passage of HB 4502 will have a net positive fiscal impact of $215,000 per year to the offices of the Insurance Commissioner.
Person submitting Fiscal Note: Melinda Kiss
Email Address: Melinda.A.Kiss@wv.gov