Sub. for S.B. 494 concerns the manner in which the annual budget of the Insurance Department is financed. The bill strikes the cap of $4.8 million on fees and premium taxes which are credited to the Insurance Department Service Regulation Fund and removes the authority of the Insurance Commissioner to transfer a portion of insurance premium taxes from the State General Fund to the Insurance Department Service Regulation Fund. Insurance companies doing business in the state would be assessed for the portion required to finance the agency's regulatory functions which are in excess of the anticipated fees paid to the agency.
Under current law, the regulatory functions of the Insurance Department are financed by fees paid to the agency and a portion of the premium taxes paid to the state, to an aggregate total of $4.8 million. Amounts required to finance the agency in excess of $4.8 million come from an annual assessment on insurance companies doing business in the state. In FY 1997, fees paid to the agency exceeded the $4.8 million cap imposed by statute.
As introduced, the bill would have removed the $4.8 million cap and the Commissioner's authority to levy special assessments on insurance companies doing business in the state, increasing the amount of premium taxes transferred to the agency from the State General Fund.
The Senate Ways and Means Committee recommended the substitute bill due to the number of amendments required to the original bill. A representative of the Insurance Department testified that the substitute bill would have no impact on the State General Fund.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.