Date Requested:April 04, 2005
Time Requested:04:07 PM
Agency: Risk and Insurance Management, Board of
CBD Number: Version: Bill Number: Resolution Number:
Intro HB3152
CBD Subject: To clarify when BRIM is not required to
FUND(S)
2360; 2361; 2362; 2363; 2367; 2368
Sources of Revenue
Special Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

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

    The attached fiscal note reflects the increased impact to overall premiums for Boards of Education, in the event the proposed legislation is not enacted.
    West Virginia Code Chapter 29-12-5a requires that BRIM provide $5million excess liabiity coverage to Boards of Education. The excess carrier has imposed a sub-limit of $1million for sexual abuse and molestation within the $5million limit. This leaves the Boards of Education with a four million coverage gap.
    Additionally, a recent Supreme Court ruling (Shaffer v. Stanley, November 26, 2003)mandated that BRIM must provide liability coverage for every single activity engaged in, and responsibility undertaken by state agencies. An actuarial study projected that state agency premiums would double because of this ruling. The ruling also stated that if such coverage does not exist, the agency can still be sued in circuit court and recovery obtained. The ruling can be interpreted to include Boards of Education as well. The 2004 legislature amended West Virginia Code Chapter 29-12-5 correcting the Supreme Court mandate for state agencies. This proposed legislation amends West Virginia Code Chapter 29-12-5a correcting the Supreme Court mandate for Boards of Education.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 14,861,062 0 29,000,000
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 14,861,062 0 29,000,000
3. Explanation of above estimates (including long-range effect):
    The fiscal impact is, if this legislation is not passed, BRIM will be required to invoice Boards of Education the premium necessary, as a result of the Supreme Court ruling, and because of the gap in coverage by the excess carrier, to prevent an immediate unfunded mandate. Premiums projected by the actuary could increase twofold for each Board of Education. This legislation will prevent that.


Memorandum
Person submitting Fiscal Note:
Charles E. Jones, Jr
Email Address:
cjones@wvadmin.gov