Compendium of Budget Information for the 2012 General Session

Business, Economic Development, & Labor
Appropriations Subcommittee

Function

The Insurance Department protects the public by regulating insurance companies and individual agents to assure equitable and competitive business practices. The department is divided into eight divisions which are funded from restricted funds. The Insurance Department Restricted Account is made up from fees, fines, and forfeitures collected by the Department. By statute, funds collected in the Insurance Department Restricted Account over the amounts appropriated are deposited in the General Fund.

Activity, function and structure have been regrouped to reduce processing time, improve department efficiency, and enhance customer service. Traditionally, the department's appropriation has been considered one budget. The department's appropriation is offset by fees collected by the department which are deposited into multiple restricted funds. Fees are collected for a variety of activities in addition to licensing of agents and brokers.

The mission of the department is to foster a healthy insurance market by promoting fair and reasonable practices that ensure available, affordable and reliable insurance products and services.

The mission of the department is accomplished by educating, serving and protecting insurance consumers, governmental agencies and all insurance industry participants at a reasonable cost. The department cooperates with and serves state and other governmental agencies in fulfilling their responsibilities.

Statutory Authority

The general and specific authority to regulate all aspects of the insurance industry in Utah are found in the Utah Code Annotated Title 31A, chapters 1 through 42.

Special Funds

The Department of Insurance administers the following special funds:

The Bail Bond Surety Administration Account is funded by fees established in the Bail Bond Act. Funding is used for administration of the act.

The Guaranteed Asset Protection Waiver Restricted Account Funds derived from fees established under UCA 31A-6b-202. Funding is used to pay for costs or expenses incurred in the administration, investigation, and enforcement of the Guaranteed Asset Protection Waiver Act.

The Insurance Department Restricted Account is established in UCA 31A-3-103. Funding is used for overall administration of the Department of Insurance.

The Insurance Fraud Investigation Restricted Account is funded by assessments made under UCA 31A-31-109. Funds are used pay for a cost or expense incurred in the administration, investigation, and enforcement of the Insurance Fraud Act.

The Relative Value Study Restricted Account is established in UCA 31A-2-208. Fund are used to pay for expenses incurred by the Department in conducting, maintaining, and administering the relative value study

The Health Insurance Actuarial Review Restricted Account is established in UCA 31A-30-115. Fund are used to pay for the actuarial review conducted by the department under the Individual, Small Employer, and Group Health Insurance Act.

The Criminal Background Check Restricted Account is funded through fees established under UCA 31A-16-103, 31A-23a-105(3); 31A-25-203(3); and 31A-26-203(3). Funds are used to defray the required costs related to obtaining criminal background information.

The Technology Development Restricted Account is funded through fee on requests for information: obtained from an electronic database of the commissioner; or derived from data that is generated by electronic means. Insurance can also impose a supplemental fee on the issuance or renewal of any of the following issued by the department: (a) a license; (b) a registration; or (c) a certificate of authority. Funding is used to provide services through use of electronic commerce or other similar technology.

The Captive Insurance Restricted Account is funded through fees imposed on certificates of authority. Funds are used to administer the Captive Insurance Companies Act and the Special Purpose Financial Captive Insurance Company Act, and to promote captive insurance in the state.

The Title Licensee Enforcement Restricted Account consists of assessments on title insurer and each title insurance agency to cover the costs of administration, investigation, and enforcement of the Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries Act. Funding cannot exceed $80,000.

Funding Detail

The Department of Insurance contains five separate line items: Insurance Department Administration, Comprehensive Health Insurance Pool, Bail Bond Program, Title Insurance Program, and Risk Adjuster.

Sources of Finance	2008 Actual	2009 Actual	2010 Actual	2011 Actual	2012 Approp
General Fund	$16,725,100	$14,194,900	$13,623,700	$13,438,000	$8,078,900
General Fund, One-time	$0	$1,078,100	$72,500	($25,000)	$35,000
Federal Funds	$1,509,700	$1,440,800	$2,040,600	$5,634,300	$15,118,000
Dedicated Credits Revenue	$3,763,900	$22,791,700	$23,578,400	$25,900,100	$39,076,900
Restricted Revenue	$18,753,800	$0	$300,400	$0	$0
GFR - Bail Bond Surety Admin	$22,100	$23,500	$23,500	$23,500	$23,500
GFR - Guaranteed Asset Protection Waiver	$0	$0	$11,800	$89,000	$89,000
GFR - Insurance Department Account	$0	$0	$0	$0	$5,894,900
GFR - Insurance Fraud Investigation	$0	$0	$0	$0	$1,984,500
GFR - Relative Value Study	$0	$0	$0	$0	$90,000
GFR - Health Insurance Actuarial Review	$0	$0	$0	$150,000	$147,000
GFR - Technology Development	$0	$0	$0	$784,900	$645,700
GFR - Criminal Background Check	$0	$0	$0	$162,500	$165,000
GFR - Captive Insurance	$0	$0	$0	$664,400	$688,900
GFR - Title Licensee Enforcement	$0	$0	$0	$75,000	$79,900
Beginning Nonlapsing	$29,548,500	$32,915,000	$32,933,000	$28,268,300	$21,823,700
Closing Nonlapsing	($33,327,300)	($32,933,000)	($28,268,300)	($23,195,100)	($13,375,800)
Lapsing Balance	($55,900)	($37,000)	($595,200)	($815,500)	$0
Total	$36,939,900	$39,474,000	$43,720,400	$51,154,400	$80,565,100

Line Items	2008 Actual	2009 Actual	2010 Actual	2011 Actual	2012 Approp
Insurance Department Administration	$9,397,100	$9,112,200	$8,556,200	$8,357,600	$10,617,600
Comprehensive Health Insurance Pool	$27,449,200	$30,275,400	$35,053,700	$42,626,900	$69,658,200
Risk Adjuster	$0	$0	$0	$90,800	$182,000
Bail Bond Program	$18,600	$20,900	$22,100	$1,300	$23,500
Title Insurance Program	$75,000	$65,500	$88,400	$77,800	$83,800
Total	$36,939,900	$39,474,000	$43,720,400	$51,154,400	$80,565,100

Categories of Expenditure	2008 Actual	2009 Actual	2010 Actual	2011 Actual	2012 Approp
Personnel Services	$5,759,600	$6,247,200	$5,885,600	$5,710,000	$6,737,600
In-state Travel	$38,600	$43,200	$29,100	$6,100	$42,900
Out-of-state Travel	$158,600	$104,600	$39,300	$57,800	$120,700
Current Expense	$29,561,300	$31,748,200	$36,085,700	$43,693,900	$48,630,700
DP Current Expense	$1,239,500	$1,313,200	$1,273,700	$1,325,500	$1,365,700
DP Capital Outlay	$32,500	$8,800	$0	$0	$3,000
Capital Outlay	$0	$0	$0	$8,300	$0
Other Charges/Pass Thru	$149,800	$8,800	$407,000	$352,800	$23,664,500
Total	$36,939,900	$39,474,000	$43,720,400	$51,154,400	$80,565,100

Other Indicators	2008 Actual	2009 Actual	2010 Actual	2011 Actual	2012 Approp
Budgeted FTE	95.0	91.0	92.0	86.0	83.0
Actual FTE	0.0	0.0	77.4	86.0	0.0
Vehicles	10	10	11	10	10

Subcommittee Table of Contents