COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:5286S.03P Bill No.:Perfected SS for SB 1359 Subject:Department of Commerce and Insurance; Insurance - Life; Insurance - Health;
Banks And Financial Institutions; Insurance - General
Type:Original Date:March 28, 2024Bill Summary:This proposal enacts provisions relating to reinsurance and examinations of
insurance companies.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2025FY 2026FY 2027Total Estimated Net
Effect on General
Revenue $0 $0 $0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Insurance Dedicated
Fund$0 or ($234,124)$0 or ($285,667)$0 or ($290,479)
Total Estimated Net
Effect on Other State
Funds$0 or ($234,124)$0 or ($285,667)$0 or ($290,479)
Numbers within parentheses: () indicate costs or losses. L.R. No. 5286S.03P
Bill No. Perfected SS for SB 1359
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2025FY 2026FY 2027Insurance Dedicated
Fund 0 or 3 FTE0 or 3 FTE0 or 3 FTE
Total Estimated Net
Effect on FTE0 or 3 FTE0 or 3 FTE0 or 3 FTE
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Local Government$0$0$0 L.R. No. 5286S.03P
Bill No. Perfected SS for SB 1359
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FISCAL ANALYSIS
ASSUMPTION
Section 374.192:
Officials assume the department would need
a minimum of three (3.00) FTE to implement and handle process changes that will be required as
a result of these statutory changes. Two (2.00) additional regulatory auditor FTE will be required
to ensure that the initial review of filings subject to a deemer are completed within two (2) days
of receipt and that company responses to requests for information are also reviewed within two
(2) days of receipt. Furthermore, the time constraints associated with certain filings will result in
an increase in the number of filing disapprovals in order to prevent insurers from using deemed
filings that contain non-compliant language. This has the potential to significantly impede an
insurers ability to bring new product to market quickly. The change will likely result in an
increase in the number of Notices of Noncompliance issued to insurers. It is anticipated that at
least one (1.00) Examiner FTE will be needed to support this additional work. It may also
overrule the requirement in 374.215, hindering the department's ability to produce statutorily
required reports in a timely fashion. Additional legal support may be necessary if the work load
increases beyond what is expected and would be requested through the budget process.
Oversight notes DCI had not requested additional FTE for SB 1348 with similar language for
Section 374.192. Oversight assumes DCI is provided with core funding to handle a certain
amount of activity each year. Oversight assumes DCI may be able to absorb the costs related to
this proposal. Therefore, Oversight will reflect a cost of $0 to the estimated cost and FTE
provided by DCI.
Sections 380.621 - Insurance company reinsurance coverage and standards
Officials from the Department of Revenue (DOR) assume this proposal exempts Missouri
mutual insurance companies from rules and regulations other than those in Section 380.621.
Currently insurance companies are required to pay premium tax under Chapter 148. This
proposal appears to exempt these companies from the premium tax. Each year DCI calculates
the amount of premium tax owed by the companies. DOR defers to DCI for the estimate of the
loss to state revenue.
Oversight assumes the perfected version of section 380.621 changes this provision and will not
eliminate premium tax collection as mentioned in previous fiscal notes.
In response to similar legislation, officials from the Office of Administration - Budget and
Planning deferred to the Department of Commerce and Insurance for the potential fiscal impact
of this proposal. L.R. No. 5286S.03P
Bill No. Perfected SS for SB 1359
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FISCAL IMPACT – State GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027INSURANCE DEDICATED FUNDCost – DCI (3 FTE)$0 or….$0 or$0 or Personal Service($141,667)($1,734,00)($176,868) Fringe Benefits($92,458)($112,267)($113,611)Total Cost - DCI($234,124)($285,667)($290,479) FTE Change – DCI0 or 3 FTE0 or 3 FTE0 or 3 FTEESTIMATED NET EFFECT TO
THE INSURANCE DEDICATED
FUND
$0 or
($234,124)
$0 or
($285,667)
$0 or
($290,479)
FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027$0$0$0
FISCAL IMPACT – Small Business
A direct fiscal impact to mutual insurance companies could be expected as a result of this
proposal.
FISCAL DESCRIPTION
This proposal enacts provisions relating to reinsurance and examinations of insurance
companies.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space. L.R. No. 5286S.03P
Bill No. Perfected SS for SB 1359
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SOURCES OF INFORMATION
Office of Administration - Budget and Planning
Department of Revenue
Department of Commerce and Insurance
Julie MorffRoss StropeDirectorAssistant DirectorMarch 28, 2024March 28, 2024