FISCAL NOTE
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 4657 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. The estimated savings for state government is projected at $2,000,000 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.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2010
Increase/Decrease
(use"-") |
2011
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
-2,000,000 |
-2,000,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
-2,000,000 |
-2,000,000 |
| 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):
Aggregate workers compensation premium for state agencies is currently estimated at $17.2 million. Estimate does not include projected premium increases. A preliminary funding study estimates ultimate workers compensation losses to range between $11.5 to $14 million for state agencies. The analysis assumes a $100,000 deductible, limiting losses of the state to $100,000 per occurrence. There would be additional costs for certain other expenses including overhead and loss prevention efforts that need to be considered.
Range of savings (Current Premium – Estimated Losses) = $3.2 to $5.7 million, does not include any additional costs for loss prevention and overhead. A conservative estimate of net savings is projected at $2,000,000 annually.
Memorandum
Person submitting Fiscal Note: Michael D Riley
Email Address: Michael.Riley@wvinsurance.gov