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Superintendent details patient-compensation and malpractice subsidy requests; committee asks staff to reconcile executive and LFC differences
Summary
The Appropriations & Finance subcommittee reviewed the Office of Superintendent of Insurance’s budget, including proposals on the patient compensation fund and a proposed medical-malpractice premium subsidy to independent providers. The committee adopted a motion asking staff to reconcile differences between the executive and LFC recommendations.
The Appropriations & Finance subcommittee heard the Office of Superintendent of Insurance’s annual budget presentation and adopted a motion asking staff to examine differences between the LFC and executive recommendations.
Julissa Rodriguez, LFC analyst for the agency, said OSI is an enterprise-funded agency that does not receive general fund and that differences between the executive and LFC recommendations were minor in the recurring base but larger in special-appropriation proposals. The executive recommended a $25 million special appropriation to subsidize medical-malpractice premiums for providers statewide; the LFC did not include that $25 million in its recommendation.
Superintendent Alice Kane said OSI’s mission is “to protect consumers, foster a competitive marketplace, ensure that the insurance companies are financially sound and treat their customers fairly, and ensure that the producers who sell insurance are honest and trustworthy.” She outlined the agency’s operating revenues, which come from licensing fees, industry assessments and similar charges used to support insurance operations, fraud investigations and the title and continuing-education programs.
Kane and staff discussed the patient compensation fund (PCF) and a proposed expansion of the FAIR plan coverage and limits following recent catastrophic losses. Kane said the PCF remains a focus and that prior special appropriations and assessments were used to stabilize the fund. She described the medical-malpractice premium subsidy last year, which reimbursed a portion of premiums for eligible independent providers; the executive this year proposed $25 million to continue statewide subsidies and expand eligibility.
Committee members asked for additional documentation and breakdowns. Representative Vincent asked for clarification about how OSI rates compare with private-market rates; Kane said OSI’s current rates are below market in some lines and that the FAIR plan’s governance and underwriting approach are under review. Representative Duncan asked for legal analysis of anti-donation questions related to subsidies; Kane said she would supply a legal opinion and staff provided context on prior reversions.
Vice Chair Sanchez moved to adopt the executive recommendation and asked staff to reconcile differences between the two recommendations; the motion was seconded and the committee adopted it with no objections recorded on the hearing record.
