LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6661 NOTE PREPARED: Dec 18, 2024
BILL NUMBER: SB 512 BILL AMENDED:
SUBJECT: Insurance Pooling for Political Subdivisions.
FIRST AUTHOR: Sen. Becker BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill permits political subdivisions, acting jointly, to pool resources to
purchase insurance coverage.
Effective Date: July 1, 2025.
Explanation of State Expenditures: The bill’s requirements will increase workload for the Department of
Insurance (DOI) and the Office of Administrative Law Proceedings but should be able to be implemented
using existing staffing and resources at each agency. [The DOI is funded through a dedicated agency fund.]
Explanation of State Revenues: A trust that violates the provisions of this bill commits an unfair claims
settlement practice. If this bill increases the number of such practices discovered by the DOI, revenue to the
state General Fund will increase from civil penalties paid by violators. The penalty for engaging in an unfair
claims settlement practice is one or more of the following: (1) a civil penalty between $25,000 and $50,000
for each act or violation and (2) revocation of a license or certificate of authority if they knowingly engaged
in an unfair or deceptive act.
Explanation of Local Expenditures: Political subdivisions may have reduced expenditures if they select
to pool resources for insurance purposes. Any change in expenditures will depend on local action.
Additional Information: Pooling insurance across multiple entities creates a larger and more diversified risk
pool. Depending on the size and composition of a given risk pool, political subdivisions in the pool may have
reduced insurance costs as compared to purchasing insurance individually.
The bill defines a political subdivision as a: county, township, city, town, separate municipal corporation,
special taxing district, city hospital, county hospital, select board, select commission, drug enforcement task
force operated jointly by a political subdivision, select community correctional service program, or select
solid waste management district.
Explanation of Local Revenues:
SB 512 1 State Agencies Affected: Department of Insurance; Office of Administrative Law Proceedings.
Local Agencies Affected: Political subdivisions.
Information Sources: Government Finance Officers Association:
https://www.gfoa.org/materials/dont-go-alone_gfr0621.
Fiscal Analyst: Jason Barrett, 317-232-9809.
SB 512 2