FISCAL NOTE

Date Requested: January 22, 2020
Time Requested: 01:36 PM
Agency: Risk and Insurance Management, Board of (BRIM)
CBD Number: Version: Bill Number: Resolution Number:
2277 Introduced SB508
CBD Subject: Public Safety


FUND(S):

2360 – State Special Insurance Fund

Sources of Revenue:

Special Fund

Legislation creates:





Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The proposed legislation indicates that, beginning July 1, 2020, the Board of Risk and Insurance Management (BRIM) exclude the Division of Corrections and Rehabilitation from being provided additional liability insurance coverage of $1.25 million from the current $1 million. The liability coverage limit retained by BRIM will remain at $1 million, as amended in §29-12-5a (a) of the Code of West Virginia. If that additional higher limit were to be provided, the cost of the additional coverage would be approximately $50,000 per year, beginning with FY2021. The estimated cost would be recovered through a supplemental premium billed to the Division of Corrections and Rehabilitation for FY2021.



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 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):


The primary reason for no change in the estimated costs/ expenses for FY2020 is the higher retained limit being eliminated by the proposed legislation was not effective until FY2021 (July 1, 2020). In addition, this change was not anticipated in the estimated premium for FY2021 for the Division of Corrections and Rehabilitation as the rates for FY2021 were developed based on claims loss estimates provided by the actuary in September 2019. The actuaries did not anticipate any change impacting any State agency retained coverage limit in their loss estimates.



Memorandum


BRIM suggests the $250,000 increase to the primary layer is unnecessary, given the claim history of the Division of Corrections and Rehabilitation and the anticipated increase in cost if enacted. In addition, rates for FY 2021 have already been developed and BRIM cannot easily change the terms of the policy renewing on July 1, 2020 and would have to work with the carrier to endorse the policy for this change.



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