Compendium of Budget Information for the 2010 General Session

Commerce & Workforce Services
Appropriations Subcommittee

Line Item: Insurance Department Administration

Function

Administration manages other programs within the Department and is responsible for budgeting, 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.

Financial Examination Division licenses approximately 1,500 insurance companies in Utah. It also monitors financial strength and solvency. 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 and benefits. These reimbursements are deposited into the General Fund.

Property and Casualty, Health, and Life Divisions function by line of insurance. These divisions handle telephone and walk-in complaints and inquiries from the public. They review and analyze policy forms and rates filed by insurance companies and assist consumers with complaints about insurance products and companies.

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

Intent Language

The Legislature intends that the Department of Insurance is authorized to allow State Fleet Services to purchase three fleet vehicles for the Insurance Fraud Division.

Funding Detail

Sources of Finance	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
General Fund	$4,650,100	$5,319,700	$5,919,900	$5,689,700	$5,118,500
General Fund, One-time	$0	$19,900	$0	$278,100	$230,000
Dedicated Credits Revenue	$2,759,900	$3,128,400	$3,695,800	$2,718,400	$4,754,000
Beginning Nonlapsing	$950,100	$1,427,300	$1,695,200	$1,859,700	$1,278,200
Closing Nonlapsing	($1,427,300)	($1,724,800)	($1,861,400)	($1,399,300)	($1,314,500)
Lapsing Balance	$0	$0	($52,400)	($34,400)	$0
Total	$6,932,800	$8,170,500	$9,397,100	$9,112,200	$10,066,200

Programs:	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Administration	$4,717,500	$5,329,700	$6,088,000	$6,111,700	$5,538,500
Relative Value Study	$25,100	$179,400	$33,000	$69,200	$91,600
Insurance Fraud Program	$1,783,300	$2,214,800	$2,662,300	$2,144,200	$3,595,500
Captive Insurers	$2,900	$113,200	$243,200	$346,400	$365,600
Electronic Commerce Fee	$404,000	$333,400	$370,600	$440,700	$475,000
Total	$6,932,800	$8,170,500	$9,397,100	$9,112,200	$10,066,200

Categories of Expenditure	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Personnel Services	$4,611,700	$4,913,100	$5,676,000	$6,172,700	$6,221,400
In-state Travel	$10,700	$20,800	$34,900	$36,000	$41,800
Out-of-state Travel	$113,100	$117,700	$149,200	$102,800	$135,900
Current Expense	$1,666,200	$1,867,900	$2,265,200	$1,481,500	$2,789,600
DP Current Expense	$354,600	$1,219,200	$1,239,300	$1,310,400	$877,500
DP Capital Outlay	$157,500	$28,800	$32,500	$8,800	$0
Capital Outlay	$19,000	$0	$0	$0	$0
Other Charges/Pass Thru	$0	$3,000	$0	$0	$0
Total	$6,932,800	$8,170,500	$9,397,100	$9,112,200	$10,066,200

Other Indicators	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Budgeted FTE	80.0	85.0	95.0	91.0	91.0
Vehicles	9	10	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 Dedicated Credits and are made non-lapsing in the Utah Code. The study is produced by Relative Value Studies, Inc. of Denver. The contract to produce the study is re-bid every three years. The Department charges $10 per copy.

Funding Detail

Sources of Finance	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Dedicated Credits Revenue	$91,400	$91,200	$93,500	$100,200	$91,600
Beginning Nonlapsing	$232,800	$299,100	$210,900	$269,700	$0
Closing Nonlapsing	($299,100)	($210,900)	($271,400)	($300,700)	$0
Total	$25,100	$179,400	$33,000	$69,200	$91,600

Categories of Expenditure	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Current Expense	$25,100	$59,200	$23,500	$63,200	$30,600
DP Current Expense	$0	$108,100	$9,500	$6,000	$61,000
DP Capital Outlay	$0	$12,100	$0	$0	$0
Total	$25,100	$179,400	$33,000	$69,200	$91,600

Subcommittee Table of Contents

Program: Insurance Fraud Program

Function

The 1994 Legislature created the Insurance Fraud Act (UCA 31A-31-101 through 108) and the Department created the Insurance Fraud Division. It conducts criminal investigations and prosecutes insurance fraud violators. Nationwide, insurance fraud is estimated at over $3 billion. The program is funded by assessments made on insurers according to the amount of business they do in Utah:

Funding Detail

Sources of Finance	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
General Fund	$0	$0	$0	$76,000	$0
Dedicated Credits Revenue	$1,977,300	$2,204,500	$2,831,200	$1,819,600	$3,742,000
Beginning Nonlapsing	$180,800	$374,800	$343,500	$512,400	$978,300
Closing Nonlapsing	($374,800)	($364,500)	($512,400)	($263,800)	($1,124,800)
Total	$1,783,300	$2,214,800	$2,662,300	$2,144,200	$3,595,500

Categories of Expenditure	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Personnel Services	$657,100	$816,500	$911,200	$1,107,400	$1,282,300
In-state Travel	$6,400	$12,400	$29,200	$30,000	$36,100
Out-of-state Travel	$23,600	$36,500	$37,700	$21,200	$56,200
Current Expense	$1,065,200	$1,315,800	$1,636,500	$917,500	$2,125,800
DP Current Expense	$31,000	$33,600	$47,700	$59,300	$95,100
DP Capital Outlay	$0	$0	$0	$8,800	$0
Total	$1,783,300	$2,214,800	$2,662,300	$2,144,200	$3,595,500

Other Indicators	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Budgeted FTE	10.0	11.0	21.0	21.0	21.0
Vehicles	9	10	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 was passed by the Legislature. The division licenses captive insurance companies formed by companies to manage their risk exposure. It licenses captive insurance companies, monitors their solvency and financial strength. The division is funded by fees dedicated to the program. Currently, the division regulates 40 Utah domiciled companies.

Funding Detail

Sources of Finance	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Dedicated Credits Revenue	$441,400	$486,800	$479,700	$415,000	$475,000
Beginning Nonlapsing	$331,700	$369,100	$522,500	$631,600	$0
Closing Nonlapsing	($369,100)	($522,500)	($631,600)	($605,900)	$0
Total	$404,000	$333,400	$370,600	$440,700	$475,000

Categories of Expenditure	2006 Actual	2007 Actual	2008 Actual	2009 Actual	2010 Approp
Out-of-state Travel	$27,200	$0	$1,200	$0	$45,000
Current Expense	$235,300	$42,300	$47,900	$0	$108,500
DP Current Expense	$66,500	$291,100	$321,500	$440,700	$321,500
DP Capital Outlay	$75,000	$0	$0	$0	$0
Total	$404,000	$333,400	$370,600	$440,700	$475,000

Subcommittee Table of Contents