| TO: | Honorable John T. Smithee, Chair, House Committee on Insurance |
| FROM: | Ursula Parks, Director, Legislative Budget Board |
| IN RE: | HB2732 by Workman (Relating to the authorization, regulation, and function of dedicated personal insurers; creating offenses; imposing a fee.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2014 | $75,000 |
| 2015 | $75,000 |
| 2016 | $75,000 |
| 2017 | $75,000 |
| 2018 | $75,000 |
| Fiscal Year | Probable Revenue Gain/(Loss) from General Revenue Fund 1 |
Probable Revenue Gain/(Loss) from Insurance Maint Tax Fees 8042 |
Probable Savings/(Cost) from Insurance Maint Tax Fees 8042 |
Change in Number of State Employees from FY 2013 |
|---|---|---|---|---|
| 2014 | $75,000 | $438,326 | ($438,326) | 7.0 |
| 2015 | $75,000 | $405,388 | ($405,388) | 7.0 |
| 2016 | $75,000 | $405,388 | ($405,388) | 7.0 |
| 2017 | $75,000 | $405,388 | ($405,388) | 7.0 |
| 2018 | $75,000 | $405,388 | ($405,388) | 7.0 |
The bill would amend the Insurance Code relating to the authorization, regulation, and function of dedicated personal insurers; the bill would create offenses and impose a fee. The bill would allow an entity satisfying designated requirements to apply to the Texas Department of Insurance (TDI) for a limited certificate of authority as a dedicated personal insurer. The bill would require a dedicated personal insurer to be related to a designated insurable individual as outlined in the bill, and maintain capital amounts depending on the type of insurance issued. The bill would also require applicants to pay a $20 filing fee, and renew a limited certificate of authority annually. The bill would provide for certain criminal penalties if an applicant for a limited certificate of authority, as a dedicated personal insurer, makes a false or fraudulent statement in reference to their application.
The bill would take effect September 1, 2013.
Based on information provided by the TDI, this analysis assumes that approximately 3,750 individuals would apply for a limited certificate of authority as a dedicated personal insurer. Absent any language in the bill directing revenues collected from application fees, this analysis assumes the fees would be deposited to the credit of the General Revenue Fund. Given the mandatory $20 filing fee, the bill would result in a $75,000 gain to the General Revenue Fund each fiscal year.
Additionally, it is assumed that a cost of $438,326 in General Revenue-Maintenance Tax funds would be required in fiscal year 2014 for 7.0 new Full-time Equivalent (FTE) positions and related costs, including one-time equipment and technology costs. In fiscal years 2015-2018, the amount required for the 7.0 FTE positions and related costs is estimated to be $405,388 in General Revenue-Maintenance Tax funds. For the purposes of this analysis, it is assumed that any cost in General Revenue-Maintenance Tax funds for implementing the provisions of this bill would be offset by an adjustment of equal amount on the assessment of the maintenance tax or other fees accordingly in the following year as reflected in the table above.
| Source Agencies: | 304 Comptroller of Public Accounts, 454 Department of Insurance
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| LBB Staff: | UP, AG, MW, ER, LXH
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