COBI 2013 - Insurance Department Administration

Compendium of Budget Information for the 2013 General Session

Business, Economic Development, & Labor
Appropriations Subcommittee

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Agency: Insurance

Line Item: Insurance Department Administration

Function

Administration coordinates with all programs in the Department and is responsible for budgeting, accounting, financial tracking, personnel, actuarial services, and managerial statistics.

Producer Licensing is responsible for the issuance and renewal of licenses to all Utah insurance agents and agencies. Licensees qualify through examination.

The Financial Examination Division licenses approximately 1,700 insurance companies in Utah. It also monitors the financial strength and solvency of those companies. The division is responsible for the financial examination of insurers according to statute. Because not all of the companies are headquartered in Utah, the examiners may spend their time out of state. The Insurance Department is reimbursed by the insurer being examined for all costs incurred during the examination, which includes examiners salaries, benefits and travel expenses. These reimbursements are deposited into the Insurance Department Restricted Account.

The Property and Casualty and Health and Life Divisions function by line of insurance. These divisions handle telephone, online and walk-in complaints and inquiries from the public regarding insurance products. Additionally, they review and analyze policy forms and rates filed by insurance companies.

The Health and Life Division operates a federal grant "Grants to Support States in Health Insurance Rate Review Grant Cycle II". This division also supports the call center for Avenue H, Utah's health insurance exchange.

Market Conduct Division investigates and enforces insurance code violations referred from the insurance industry and other divisions of the department.

Intent Language

It is the intent of the Legislature to allow State Fleet Services to purchase one additional fleet vehicle for Insurance Fraud investigations with division funds.

Performance

The Insurance Department uses the following performance measures: consumer inquiries/complaints received, financial exams conducted, fraud cases opened, fraud cases completed, captive insurers licenses issued, and the number of active captive insurers. Data is shown below.

Funding Detail

For more detail about a particular source of finance or organizational unit, click a linked entry in the left column of the table(s) below.

Sources of Finance (click linked fund name for more info)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
General Fund	$5,689,700	$5,118,500	$5,357,800	$0	$0
General Fund, One-time	$278,100	$72,500	($25,000)	$0	$0
Federal Funds	$0	$0	$171,800	$923,400	$1,255,700
Dedicated Credits Revenue	$2,718,400	$2,830,500	$1,967,500	$0	$13,400
GFR - Guaranteed Asset Protection Waiver	$0	$11,800	$89,000	$89,000	$89,000
GFR - Insurance Department Account	$0	$0	$0	$5,894,900	$6,217,100
GFR - Ins. Dep't, One-time	$0	$0	$0	$0	$95,700
GFR - Insurance Fraud Investigation	$0	$0	$0	$1,984,500	$2,296,100
GFR - Relative Value Study	$0	$0	$0	$90,000	$84,000
GFR - Technology Development	$0	$0	$784,900	$645,700	$587,000
GFR - Criminal Background Check	$0	$0	$162,500	$165,000	$165,000
GFR - Captive Insurance	$0	$0	$664,400	$688,900	$696,900
Beginning Nonlapsing	$1,859,700	$1,399,300	$282,600	$366,200	$0
Closing Nonlapsing	($1,399,300)	($282,600)	($366,200)	($892,900)	$0
Lapsing Balance	($34,400)	($593,800)	($731,700)	($393,200)	$0
Total	$9,112,200	$8,556,200	$8,357,600	$9,561,500	$11,499,900

Programs: (click linked program name to drill-down)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Administration	$6,111,700	$5,324,000	$5,416,200	$6,569,700	$7,428,500
Relative Value Study	$69,200	$192,100	$6,200	$48,800	$84,000
Insurance Fraud Program	$2,144,200	$2,086,100	$1,685,200	$1,859,700	$2,444,700
Captive Insurers	$346,400	$362,500	$510,800	$560,100	$701,700
Electronic Commerce Fee	$440,700	$586,900	$587,800	$406,700	$587,000
GAP Waiver Program	$0	$0	$4,400	$2,800	$89,000
Office of Consumer Health Assistance	$0	$4,600	$0	$0	$0
Criminal Background Checks	$0	$0	$147,000	$113,700	$165,000
Total	$9,112,200	$8,556,200	$8,357,600	$9,561,500	$11,499,900

Categories of Expenditure (mouse-over category name for definition)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Personnel Services	$6,172,700	$5,793,200	$5,640,900	$6,092,900	$7,515,100
In-state Travel	$36,000	$27,700	$6,000	$13,800	$33,500
Out-of-state Travel	$102,800	$36,300	$52,500	$117,600	$123,700
Current Expense	$1,481,500	$1,437,600	$1,331,400	$1,635,700	$2,003,700
DP Current Expense	$1,310,400	$1,261,400	$1,318,500	$1,690,200	$1,823,900
DP Capital Outlay	$8,800	$0	$0	$0	$0
Capital Outlay	$0	$0	$8,300	$11,300	$0
Total	$9,112,200	$8,556,200	$8,357,600	$9,561,500	$11,499,900

Other Indicators	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Budgeted FTE	91.0	91.0	84.0	84.5	85.5
Actual FTE	79.7	75.4	84.0	78.4	0.0
Vehicles	10	11	10	10	10

Subcommittee Table of Contents

Program: Relative Value Study

Function

Under UCA 31A-22-307, the Relative Value Study is to determine the reasonable value of medical expenses. It is funded by a 0.01 percent tax on motor vehicle liability, uninsured motorist, and personal injury protection insurance premiums. Funds are collected by the Tax Commission as restricted funds in the Relative Value Study Restricted Account. The study is produced by the All-Payer Claims Data Base in the Office of Health Care Statistics in the Department of Health. The contract to produce the study is re-bid every three years. The department charges $10 per copy.

Funding Detail

Sources of Finance (click linked fund name for more info)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Dedicated Credits Revenue	$100,200	$100,100	$95,500	$0	$0
GFR - Relative Value Study	$0	$0	$0	$90,000	$84,000
Beginning Nonlapsing	$269,700	$300,700	$208,700	$0	$0
Closing Nonlapsing	($300,700)	($208,700)	$0	$0	$0
Lapsing Balance	$0	$0	($298,000)	($41,200)	$0
Total	$69,200	$192,100	$6,200	$48,800	$84,000

Categories of Expenditure (mouse-over category name for definition)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Personnel Services	$0	$145,900	$0	$0	$0
Current Expense	$63,200	$39,600	$200	$42,800	$81,400
DP Current Expense	$6,000	$6,600	$6,000	$6,000	$2,600
Total	$69,200	$192,100	$6,200	$48,800	$84,000

Subcommittee Table of Contents

Program: Insurance Fraud Program

Function

The 1994 Legislature created the Insurance Fraud Act (UCA 31A-31-101 through 111) and subsequently the department created the Insurance Fraud Division. It conducts criminal investigations and prosecutes insurance fraud violators. Nationwide, insurance fraud is estimated at over $30 billion per year in property and casualty claims. For healthcare fraud the nationwide losses are estimated to be at least $77 billion and possibly reaching over $250 billion. The program is funded by the Insurance Fraud Investigation Restricted Account.

Funding Detail

Funding for the Insurance Fraud program is from the Insurance Fraud Investigation Restricted Account. Funds are used mainly for staff and corresponding current expense costs. Restitution payments are also made from the Fraud program as ordered by the Courts to victims of fraud insurance.

Sources of Finance (click linked fund name for more info)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
General Fund	$76,000	$0	$0	$0	$0
Federal Funds	$0	$0	$5,700	$85,500	$140,000
Dedicated Credits Revenue	$1,819,600	$1,896,200	$1,872,000	$0	$8,600
GFR - Insurance Fraud Investigation	$0	$0	$0	$1,984,500	$2,296,100
Beginning Nonlapsing	$512,400	$263,800	$73,900	$0	$0
Closing Nonlapsing	($263,800)	($73,900)	$0	($210,300)	$0
Lapsing Balance	$0	$0	($266,400)	$0	$0
Total	$2,144,200	$2,086,100	$1,685,200	$1,859,700	$2,444,700

Categories of Expenditure (mouse-over category name for definition)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Personnel Services	$1,107,400	$1,041,400	$790,000	$834,000	$1,409,000
In-state Travel	$30,000	$25,700	$4,300	$8,000	$22,500
Out-of-state Travel	$21,200	$13,900	$13,000	$13,700	$34,000
Current Expense	$917,500	$920,100	$827,500	$957,000	$898,600
DP Current Expense	$59,300	$85,000	$50,400	$35,700	$80,600
DP Capital Outlay	$8,800	$0	$0	$0	$0
Capital Outlay	$0	$0	$0	$11,300	$0
Total	$2,144,200	$2,086,100	$1,685,200	$1,859,700	$2,444,700

Other Indicators	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Budgeted FTE	21.0	21.0	13.0	13.5	13.0
Actual FTE	11.3	12.0	13.0	9.8	0.0
Vehicles	10	11	10	10	10

Subcommittee Table of Contents

Program: Electronic Commerce Fee

Function

The Captive Insurance Division was created in 2003 when the Captive Insurance Companies Act (UCA 31A-37-101 through 604) was passed by the Legislature. The division licenses captive insurance companies formed by companies to manage their risk exposure. It also monitors their solvency and financial strength. The division is funded by the Captive Insurance Restricted Account. As of June 30, 2012, the division was regulating 238 Utah domiciled companies.

Funding Detail

Since FY 2011, funding for the Captive Insurers program has been from the Captive Insurance Restricted Account, (H.B. 39 Insurance Related Amendments, 2010 General Session) and is used to fund all aspects of the program, including: personnel, audits and other supports for accomplishing the mission of the Captive Insurers program.

Sources of Finance (click linked fund name for more info)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Dedicated Credits Revenue	$415,000	$448,300	$0	$0	$0
GFR - Technology Development	$0	$0	$784,900	$645,700	$587,000
Beginning Nonlapsing	$631,600	$605,900	$0	$197,100	$0
Closing Nonlapsing	($605,900)	$0	($197,100)	($426,900)	$0
Lapsing Balance	$0	($467,300)	$0	($9,200)	$0
Total	$440,700	$586,900	$587,800	$406,700	$587,000

Categories of Expenditure (mouse-over category name for definition)	2009 Actual	2010 Actual	2011 Actual	2012 Actual	2013 Approp
Current Expense	$0	$0	$0	$300	$0
DP Current Expense	$440,700	$586,900	$587,800	$406,400	$587,000
Total	$440,700	$586,900	$587,800	$406,700	$587,000

Subcommittee Table of Contents

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COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.