LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7172 NOTE PREPARED: Jan 20, 2022
BILL NUMBER: HB 1238 BILL AMENDED: Jan 18, 2022
SUBJECT: Insurance Matters.
FIRST AUTHOR: Rep. Lehman BILL STATUS: 2
nd
Reading - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: Minimum Nonforfeiture Amounts: The bill reduces, from 1% to 0.15%, the lowest
interest rate that an insurer may use in determining the minimum nonforfeiture amounts for an annuity
contract.
Continuing Education: The bill provides that, as a condition of license renewal for a two-year period, a
limited lines producer with a title insurance qualification must complete at least seven hours of continuing
education in any combination of the following subjects:
(1) Ethical practices in the marketing and selling of title insurance, including provisions of
the Dodd-Frank Wall Street Reform and Consumer Protection Act.
(2) Title insurance underwriting.
(3) Escrow matters.
(4) Matters concerning regulation by the Department of Insurance.
(Under current law, a limited lines producer with a title insurance qualification is required, in completing
at least seven hours of continuing education, to take at least one hour of instruction in each of four particular
subjects.)
Group Property and Casualty Insurance: It adds provision allowing property and casualty insurance
companies to offer commercial property and casualty insurance on a group basis.
Policy Cancellation: It amends the grounds for cancellation of a policy of insurance to require a substantial
change in the scale of risk that would cause the policy to fail to meet the eligibility requirements of the
underwriting guidelines.
HB 1238 1 External Consumer Data: The bill requires insurers that rely on external consumer data to provide a
consumer, upon the consumer's written request, with the five most heavily weighed or primary factors the
insurer uses to calculate a premium. The bill also requires an insurer that takes an adverse action based on
external consumer data to provide the consumer with the five factors that were the primary influence on the
adverse action.
Farm Mutual Insurance: The bill changes the cap on annual direct written premium to operate as a farm
mutual insurance company from $10 M to $15 M.
Colorectal Cancer Screening: It specifies services to be included as part of a colorectal cancer screening for
policies of accident and sickness insurance and health maintenance organization contracts.
Effective Date: July 1, 2022.
Explanation of State Expenditures: The bill will have indeterminate workload on the Department of
Insurance (DOI). However, any change in DOI workload is expected to be within the routine administrative
function of the agency and expected to be accomplished within existing resource and funding levels. [The
DOI is funded through a dedicated agency fund.]
Indiana’s essential health benefits (EHB) benchmark plan includes preventative care services without
deductible contribution for nonsymptomatic adults or adults without medical history of the disease. If a
colonoscopy after another colorectal cancer screening exceeds the EHB, the state may be responsible for
defrayment of costs to the insured or to qualified health plans on behalf of the insured. The state identifies
requirements that exceed the EHB within a federal framework, and the qualified health plans determine the
actuarially adjusted cost of providing the state mandated benefit.
Additional Information -
External Consumer Data: A violation concerning external consumer data is actionable by the DOI as unfair
and deceptive acts. The agency workload may increase to investigate and adjudicate allegations to determine
if an unfair or deceptive act has been committed.
Continuing Education: The DOI uses a third-party system to track continuing education and licensed
producers are able to view their continuing education compliance status and the continuing education hours
applied. Software enhancements are provided by the system contractor usually at no added cost.
Colorectal Cancer Screening: The EHB are required for nongrandfathered and small group plans. One of
the ten EHB covers preventive and wellness services and chronic disease management. A benchmark plan
is selected to set the requirements of the EHB by the state, and Indiana’s plan for FY 2017 to FY 2023 is
Anthem Insurance Companies Inc. Legacy PPO, with a plan name of Blue 6.0 Blue Access PPO Option 14,
Rx G.
Explanation of State Revenues: External Consumer Data: The state insurance commissioner may take
administrative actions concerning unfair and deceptive acts that will impact revenue to the state General
Fund and the DOI’s agency fund. The penalty for engaging in an unfair and deceptive act is a civil penalty
between $25,000 and $50,000 for each act or violation. The revocation of a insurers license or certificate of
authority for knowingly engaged in an unfair or deceptive act would result in a reduction in fee revenue to
the DOI agency fund.
HB 1238 2 Premium Taxes: Group policies may allow for discounts or otherwise reduce the premium for the
associations. If premiums are lower, insurance premium tax revenue to the state General Fund could
decrease. Alternatively, premium tax revenue to the state General Fund could increase to the extent that an
investment in an annuity contracts are an alternative to other interest bearing investments based on changes
to the minimum nonforfeiture amounts.
Domestic insurers have the option to pay taxes on insurance premiums written in the state or to pay the AGI
tax. Foreign insurers are required to pay taxes on premiums written in the state, and some foreign insurers
are assessed additional retaliatory taxes. In these cases, the minimum tax rate would be 1.3% of written
premiums. Revenue received from the AGI and insurance premium tax is deposited in the General Fund.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: State Budget Agency; Department of Insurance; Family and Social Services
Administration.
Local Agencies Affected:
Information Sources:
https://www.cms.gov/CCIIO/Resources/Data-Resources/Downloads/Updated-Indiana-Benchmark-Summ
ary.pdf; https://www.cms.gov/CCIIO/Resources/Data-Resources/ehb; https://www.irs.gov/publications/p969.
Fiscal Analyst: Karen Rossen, 317-234-2106, Randhir Jha, 317-232-9556.
HB 1238 3