FY 2016 Appropriation

The Utah Insurance Department (UID) protects the public by regulating insurance companies and individual agents to assure equitable and competitive business practices. The UID also monitors the solvency of insurance companies domiciled in the State of Utah. The department is divided into eight divisions which are funded from various restricted funds. The department's primary operating account is the Insurance Department Restricted Account which is funded by fees, fines, and forfeitures collected by the department to support its regulatory functions. As detailed below, specific functions of the department are funded through certain restricted accounts. By statute, funds collected into the Insurance Department Restricted Account over the amounts appropriated are deposited in the General Fund.

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.

Funding History
Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $14,789,500 from all sources for Insurance. This is a 10.4 percent reduction from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $4,400 from the General/Education Funds, a change of 0 percent from revised Fiscal Year 2015 estimates.

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.
Title and Escrow Modifications$20,000$0
OngoingOne-TimeFinancing Source
$20,000$0GFR - Title Licensee Enforcement
Revenue to the Title License Enforcement Restricted Account will increase by $20,000 from the adjustment of the statutory cap. Expenditures associated with the adjustment of the statutory cap are estimated at $20,000.
Title Insurance Restricted Fund Increase$9,800$0
OngoingOne-TimeFinancing Source
$9,800$0GFR - Title Licensee Enforcement
Restricted fund allocation to keep up with program growth.
Statute

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.

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.

HB0003: Item 72

The Legislature intends that any non-lapsing balances remaining from the Comprehensive Health Insurance Pool after the program close out lapse to the General Fund.

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.

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. UCA 31A-35-407

The Guaranteed Asset Protection Waiver Restricted Account funds are derived from fees established under UCA 31A-6b-201, 202, and 204. 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-31-108/9. 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 59-9-105 and UCA 31A-2-208. Funds 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. Funds 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-3-105; 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 fees on requests for information: obtained from an electronic database of the commissioner; or derived from data that is generated by electronic means. The Insurance Department 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 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 captive insurance companies and certificates of authority. Funds are used to administer the Captive Insurance Companies Act (UCA 31A-37) and the Special Purpose Financial Captive Insurance Company Act, and to promote captive insurance in the state. UCA 31A-3-304

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. UCA 31A-23a-415

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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.