SB 0743 - Fiscal Note

Fiscal Note - SB 0743 - Allows Subrogation of Health Insurers to Right of Recovery

L.R. NO.  2898-04
BILL NO.  Perfected SS SCS SB 743
SUBJECT:  Insurance, Insurance-Medical, Insurance-General, Health
TYPE:     Original
DATE:     March 27, 1996



                              FISCAL SUMMARY

                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

Insurance
Dedicated                   $40,500

Total Estimated
Net Effect on All
State Funds                 $40,500              $0              $0


                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

None

Total Estimated
Net Effect on All
Federal Funds                    $0              $0              $0


                    ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED               FY 1997         FY 1998         FY 1999

Local Government                 $0              $0              $0


                              FISCAL ANALYSIS

ASSUMPTION

The Department of Insurance(INS) stated it will need .5 FTE, an Insurance
Product Analyst II, and related expense to review all new life and health
form filings caused by changes to insurance policies and plans generated by
this and all other legislation enacted during this session.  This FTE would
work full-time for six months a year.  INS states that approximately 245
insurers and 25 HMOs are currently writing medical plans.  On average each
company offers three plans. The result would be 810 new policy filings needed
to comply with this legislation.  A policy filing fee of $50 is required and
based on  810 filings, $40,500 in revenue to the Insurance Dedicated Fund
would be generated in the first fiscal year only.

Oversight assumes the passage of this proposal would not increase cost to
INS; however,  revenue of $40,500 in the first fiscal year only would be
realized. In addition, passage of  more than one similar proposal could
require the INS to request increased appropriations to cover cumulative
administrative costs.

Officials from the Department of Health (DOH), Office of Administration (OA),
Department of Conservation (MDC),  Department of Corrections (DOC),  and the
Consolidated Health Care Plan (HCP) stated that passage of this legislation
would have no fiscal impact on their agencies.

Officials from the Department of Highway and Transportation (DHT) report this
proposal will have minimal fiscal impact on the DHT medical plan and no
fiscal impact on DHT.

Officials from the Department of Public Safety (DPS) and the Department of
Social Services (DOS) responded to a similar proposal this session and stated
that passage of this legislation will have no fiscal impact on their
agencies.

Officials from the Department of Public Safety (DPS) and the Department of
Social Services (DOS) did not respond to our fiscal impact request.


FISCAL IMPACT - State Government        FY 1997    FY 1998     FY 1999
                                       (10 Mo.)
  INSURANCE DEDICATED FUND

  Income - Department of Insurance

  Policy Filing Fees                    $40,500         $0          $0

  Estimated Net Effect on Insurance     $40,500         $0          $0
  Dedicated Fund


FISCAL IMPACT  - Local Government       FY 1997    FY 1998     FY 1999
                                       (10 Mo.)

                                             $0         $0          $0

DESCRIPTION

This act allows insurers the right of subrogation of an insured's legal claim
for bodily injuries.  If the insured sues and gets a legal judgment the
settlement shall be distributed to the insurer for medical cost incurred less
attorney's fees on a prorated basis less case expenses on a prorated basis.
This distribution from medical cost shall be reduced if a finding of
comparative fault is determined. If the insured does not sue, the insurer can
bring suit against the liable party at the insurer's expense.  Any recovery
by the insurer shall be considered when revising rates for group policy
holders.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.


SOURCES OF INFORMATION

Department of Conservation
Department of Health
Department of Highway and Transportation
Office of Administration
Consolidated Health Care Plan
Department of Insurance
Office of Administration

Not Responding:  Department of Social Services,  Department of Public Safety