FISCAL NOTE
Date Requested: February 22, 2023
Time Requested: 09:43 AM |
| Agency: |
Insurance Commission |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3167 |
Introduced |
HB3153 |
|
|---|
| CBD Subject: |
Finance and Administration |
|---|
|
FUND(S):
7158 Fire Protection Fund, EMS Equip & Training Fund
Sources of Revenue:
Special Fund
Legislation creates:
Increases Revenue From Existing Sources
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
House Bill 3153, if enacted, would increase the premium surcharge paid by property and casualty insurance policy holders in WV from the current .55% to 1%. All WV homeowners insurance policies, WV vehicle insurance policies and any other property or casualty policy sold in WV would be subject to the increased premium surcharge.
The increased amount of premium surcharges paid by WV policyholders would be approximately $12,346,950.23. The current amount of premium surcharge revenue generated at the current rate of .55% is $15,077,554.77 and the estimated premium surcharge revenue generated at 1% would be $27,424,505, which yields the above estimated increase of $12.3 million.
The premium surcharge is paid by the policyholder, remitted by the insurance companies and collected by the Insurance Commissioner. The premium surcharges are not retained at the OIC, but are passed through to the designated special revenue funds specified in §33-3-33. Accordingly, HB3153 has no direct fiscal impact on the revenues, expenses or operations of the Offices of the Insurance Commissioner. See memorandum section of this fiscal note for additional information.
It should be noted that there is no effective date in House Bill 3153, which will create administrative difficulties for the policyholders, insurance companies and the Insurance Commissioner. It is strongly suggested that all changes to premium taxes and surcharges on insurance policies be made effective at the start of a calendar year, and be applicable to policies written on or after January 1st of the following calendar year.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| 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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Memorandum
House Bill 3153, if enacted, would increase the premium surcharge paid by WV property and casualty insurance policy holders from the current .55% to 1%.
The increased amount of premium surcharges paid by WV policyholders would be approximately $12,346,950.23.
The above estimate is based on calendar year 2021 audited premiums of $2,742,450,478.24 and includes surplus lines. The current premium surcharge revenue at .55% is $15,077,554.77 and the increase to the 1% premium surcharge as required by HN 3153 would yield an estimated $27,424,505. Under the provisions of HB3153, Volunteer Fire Departments (VFDs) would receive 77.5% of the total surcharge revenue which would be $21,251,029.89. This amount does not include the $6,856,125.20 currently received by VFDs under the provisions of §33-3-14d. HB3153 enactment would provide the Emergency Medical Services(EMS) Equipment and Training Fund $6,173,475.12, which is 22.5%.
The premium surcharge is paid by the policyholder, remitted by the insurance companies and surplus lines carriers and collected by the Insurance Commissioner. The premium surcharges are not retained at the OIC, but are passed through to the designated special revenue funds designated in §33-3-33. Accordingly, HB3153 has no fiscal impact on the Offices of the Insurance Commissioner.
It is strongly suggested by the Insurance Commissioner that changes to premium taxes and surcharges on insurance policies be made effective at the start of a calendar year, and be applicable to policies written on or after January 1st of the following calendar year. A prospective effective date, applicable to policies written on or after January 1st will prevent administrative confusion for the policyholders, insurance companies, mortgage lenders (escrow payments for insurance) and the OIC.
Person submitting Fiscal Note: Melinda Kiss
Email Address: Melinda.A.Kiss@wv.gov