FY 2016 Appropriation

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

Programs that support these goals are listed below in the background section.

Funding History
Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $14,102,800 from all sources for Insurance Department Administration. This is a 1.3 percent reduction from Fiscal Year 2015 revised estimated amounts from all sources.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time Attorney General Dedicated Credit Adjustments$28,800$0
OngoingOne-TimeFinancing Source
$5,200$0GFR - Insurance Department Account
$23,600$0GFR - Insurance Fraud Investigation
This item designates additional funding appropriated to an agency to pay higher costs for Attorney General services, due to statewide and AG-specific compensation increases.
Captive Insurance Caseload Growth$225,000$0
OngoingOne-TimeFinancing Source
$225,000$0GFR - Captive Insurance
Growth in the Captive Insurance Program has increased administrative costs. Funding is intended to bring them up to the statutory caps.
Federal Fund Transfer from Comprehensive Health Insurance Pool$0$374,000
OngoingOne-TimeFinancing Source
$0$374,000Federal Funds
The Comprehensive Health Insurance Pool is in the close out process. Transferring the remaining federal funds will allow the Insurance Department to close out the program.
Insurance Cancellation and Nonrenewal Amendments$0$18,300
OngoingOne-TimeFinancing Source
$0$18,300GFR - Ins. Dep't, One-time
Enacting this bill could reduce year-end transfers to the General Fund one-time in FY 2015 by $18,300. Enacting this bill could cost the Department of Insurance $18,300 one-time in FY 2015 from the Insurance Department Restricted Account to review the new forms required in the bill.. Spending from the Insurance Department Restricted Account impacts year-end transfers to the General Fund.
Insurance Modifications$9,000$6,000
OngoingOne-TimeFinancing Source
$9,000$0GFR - Insurance Department Account
$0$6,000GFR - Ins. Dep't, One-time
Enactment of this bill would reduce annual transfers from the Captive Insurance Restricted Account to the General Fund by $600,000 annually beginning in FY 2018. There will be a corresponding increase in the balance of the Captive Insurance Restricted Account subject to appropriations by the Legislature which may be used to cover projected cost increases in the program. Insurance Department Restricted Fund revenue could increase by $6,000 one-time in FY 2015 and by $9,000 ongoing from the service contract provider fees established in the legislation. Enactment of this legislation could cost the Insurance Department $6,000 one-time in FY 2015 and $9,000 ongoing beginning in FY 2016 from the Insurance Department Restricted Account for administration and review of service contract provider licenses.
Reallocate Insurance Department Account Resources to Other Accounts$75,000$0
OngoingOne-TimeFinancing Source
$40,000$0GFR - Guaranteed Asset Protection Waiver
$0$0GFR - Insurance Department Account
$35,000$0GFR - Relative Value Study
Reallocate $40,000 to the Guaranteed Asset Protection Program and $35,000 to the Relative Value Study Program.

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.

Consumer Inquiries/Complaints

Cases Opened

Cases Completed

Captive Licenses Issued

Active Captive Insurers

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

HB0003: Item 71

Under Section 63J-1-603 of the Utah Code the Legislature intends that appropriations for Insurance Department Administration not lapse at the close of Fiscal Year 2015. Any appropriations related to the transfer of federal funds of $374,000 from the closing of the Comprehensive Health Insurance Pool program and $100,000 for general program revenues shall not lapse at the close of FY 2015. Transferred funds from the Comprehensive Health Insurance Pool program shall be utilized for any late claims from former program participants, audit costs, legal fees related to the program and health outreach activities. Any other funds are for replacement of computers, printers and copy machines, and scanners for electronic storage of documents.

Funding for Insurance Department Administration is primarily from the Insurance Department Account. Revenues over expenditures for this account lapse to the General Fund at the end of a fiscal year. Expenditures are used mainly for staff and general operational support.

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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.