Honorable Eddie Lucio III, Chair, House Committee on Insurance
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB3334 by Paul (Relating to waiver of continuing education requirements for certain insurance adjusters.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3334, As Introduced: an impact of $0 through the biennium ending August 31, 2021.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2020
$0
2021
$0
2022
$0
2023
$0
2024
$0
Fiscal Year
Probable Revenue Gain from Insurance Maint Tax Fees 8042
Probable (Cost) from Insurance Maint Tax Fees 8042
Change in Number of State Employees from FY 2017
2020
$504,807
($504,807)
8.0
2021
$492,807
($492,807)
8.0
2022
$492,807
($492,807)
8.0
2023
$492,807
($492,807)
8.0
2024
$492,807
($492,807)
8.0
Fiscal Analysis
The bill would amend the Insurance Code relating to waiver of continuing education requirements for certain insurance adjusters. The bill would require the Texas Department of Insurance (TDI) to waive any continuing education (CE) requirements for an adjuster who receives a certificate of completion of a CE program issued by a professional organization of adjusters if the number of hours and program content meet TDI's current CE requirements.
The bill would take effect on September 1, 2019; however, the provisions of the bill would only apply to CE requirements for an adjuster's license period beginning on or after January 1, 2020. The Commissioner of Insurance would be required to adopt rules to implement the provisions of the bill no later than December 1, 2019.
Methodology
Based on information provided by TDI, the agency anticipates approximately 25,000 adjusters would pursue a waiver under the provisions of the bill. The bill allows for any professional organization of adjusters to provide a CE certification outside of TDI's existing framework of vendor systems. The submission of certifications would require a manual review to determine completed CE requirements and process renewals. It is estimated that implementing the provisions of the bill would result in the need for 8.0 additional Full-Time-Equivalent (FTE) positions assuming each FTE could review 3,000 renewals each year.
The agency estimates that the 8.0 FTEs would require recurring costs to General Revenue - Insurance Companies Maintenance Tax and Insurance Department Fees of $360,192 in salaries, $5,403 in payroll contribution costs, and $120,412 in related support and benefit costs each fiscal year. Additional program costs include a one-time cost of $12,000 for computers and related equipment, and recurring costs of $4,800 for consumable supplies and $2,000 for other related operating expenses.
Due to the self-leveling nature of the TDI operating fund, this analysis assumes that TDI would adjust the assessment of the maintenance tax to account for any additional costs resulting from the implementation of the bill.
Technology
TDI estimates a one-time technology cost of $12,000 in fiscal year 2020 related to the purchase of computers and related equipment for the new FTEs required to implement the provisions of the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.