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.

Please see the memorandum below regarding the fiscal impact of Senate Bill 520. The Offices of the Insurance Commissioner will require additional time to analyze the negative fiscal impact of SB 520 on the Worker's Compensation Old Fund, the Uninsured Employer's Fund, the Self-Insured Guaranty Fund, the Self-Insured Security Fund, the State Entities Worker's Compensation Fund, and the impact on the insurance premium rates paid by WV employers.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2014 Increase/Decrease (use"-")	2015 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	0	0

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

The Offices of the Insurance Commissioner has requested analysis of Senate Bill 520 from the National Council on Compensation Insurance (NCCI) regarding the fiscal impact. The OIC will file an amended fiscal note when the NCCI analysis is received.

Memorandum

Senate Bill 520 states that the Legislature finds that the Worker’s Compensation deficit has been resolved. That statement is factually incorrect, as the Worker’s Compensation Old Fund still maintains a deficit balance. As presented in the Offices of the Insurance Commissioner’s most recent audited financial statements, as of June 30, 2013, the deficit balance in the Old Fund was $628,598,000 on a discounted basis (discount rate 5%). On an undiscounted (nominal) basis, the Old Fund deficit at June 30, 2013 was estimated to be $1,618,398,000. It is unknown at this time what the legal and fiscal impact of the removal of the emergency provisions from §23-1-1 would be on the deficit balance of the Worker’s Compensation Old Fund. It is also unknown at this time what the impact of the removal of the requirement of weighing the evidence and reverting back to the rule of “liberal construction” in deciding worker’s compensation cases would be on the Old Fund and other worker’s compensation related funds that the OIC administers. However, it is highly likely those provisions of SB 520 would significantly increase the Worker’s Compensation Old Fund deficit, and negatively impact the solvency of the other Funds. The Offices of the Insurance Commissioner has requested review and analysis of Senate Bill 520 by the National Council of Compensation Insurance (NCCI) in order to obtain their input of the impact to employer rates for worker’s compensation insurance for WV employers. The OIC will file an amended fiscal note once we receive a response from NCCI.

Person submitting Fiscal Note: Melinda Kiss
Email Address: Melinda.Kiss@wvinsurance.gov