FUND(S):



Sources of Revenue:

Special Fund

Legislation creates:

A New Fund



Fiscal Note Summary


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


    SB 513 charges the Offices of the Insurance Commissioner with the
    responsibility of managing the workers’ compensation risks of all state agencies and controlling the workers’ compensation program of the agencies. The fiscal impact on the revenues and costs of state government is ultimately determined by the appropriate risk control and risk financing techniques implemented. Insurer proposals for program structure and premium quotes are needed to project savings; however, it is reasonable to believe that the state will obtain costs savings and efficiencies through the centralized procurement of the services using a single policy as opposed to each agency obtaining stand alone coverage for themselves. The estimated savings for state government is projected at 5% to 10% or $960,000 to $1,920,000 per year; however, many variables will contribute to what actual results are achieved. The capturing of increasing long-term savings is primarily dependent upon the degree of acceptance of risk control within the culture of state agencies.
    
    
    
    Aggregate workers compensation premium for state agencies is currently $19.2 million.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
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 -1,440,000 -1,440,000


Explanation of above estimates (including long-range effect):


    Current premium.... $19,200,000 X 5% = $960,000
    
    
    Current premium.... $19,200,000 X 10% = $1,920,000
    
    
    Average of the range ($960,000 + $1,920,000) / 2 = $1,440,000
    



Memorandum


    



    Person submitting Fiscal Note: Michael D Riley
    Email Address: Michael.Riley@wvinsurance.gov