Date Requested:February 16, 2011
Time Requested:03:25 PM
Agency: Insurance Commission
CBD Number: Version: Bill Number: Resolution Number:
2011R2708 Introduced HB3163
CBD Subject: MANAGE WORKERS COMP FOR STATE AGENCIES
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.

    HB 3163 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 cost 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
Over-all effect
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
3. 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