Commerce commissioner details governor's budget requests: reinsurance, Petro Fund, EV charger testing and staffing needs

Commissioner Grace Arnold of the Minnesota Department of Commerce presented the agency’s priorities and the governor’s budget recommendations to the Senate Commerce Committee, outlining operating requests, regulatory proposals and several targeted fee and staffing changes.

Arnold said the department regulates more than 40 industry areas, oversees 187 state‑chartered banks and 60 state credit unions, supervises insurance filings for individual and small‑group health plans, enforces consumer protection efforts and administers unclaimed property and the Petro Fund. “We’re with you every day, and I’ve started to joke that that’s not in a creepy way,” Arnold told Chair Seaburger and committee members.

She called the premium security (reinsurance) program “proven” and warned funding shortfalls would put the individual market at risk of “premium increases of 25% or more” if not funded. The department proposes a market assessment to fund the program; Arnold said the proposal is structured to be revenue neutral and intended to stabilize premiums and enrollment.

Other budget items described as revenue neutral or narrowly targeted include: a modest operating increase (roughly $3 million general fund request over the biennium) for compensation and IT modernization; an increase to the Petro Fund operating account for database and staffing needs (the Petro Fund has reimbursed roughly $476 million since 1987 and addressed nearly 14,000 leak sites); new staff for securities oversight to expand exam capacity (the department currently has two examiners covering roughly $11 billion in managed assets); licensing and oversight authority for emerging earned‑wage access services; and an electric vehicle supply equipment (EVSE) testing program to bring charging‑port accuracy under the weights‑and‑measures unit with a fee per charging port and one initial FTE (rising to two as ports increase).

Arnold summarized other program work: the department returned nearly $75 million in unclaimed property in 2024, senior fraud investigators opened more than 1,000 cases and placed holds totaling $7.7 million to prevent exploitation, and the enforcement team opened over 9,000 civil investigations last year and recovered roughly $23 million for consumers.

On insurance policy items, Arnold said Commerce will propose updating Minnesota’s benchmark plan for essential health benefits (last updated in 2013) to reflect current market coverage, aim to include certain mandated benefits currently paid for by the state, and submit a revised benchmark to the federal government for coverage beginning January 2027. She listed candidate inclusions as PANS/PANDAS coverage, rapid whole genome sequencing, orthotic and prosthetic devices and some biomarker testing, and said the change could reduce the state’s annual defrayal payments by about $3.9 million beginning in fiscal 2028.

On market and technical bills, Arnold described proposals to: adopt an NAIC group capital model law and liquidity stress test standard used in interstate insurance supervision; adjust the second‑lien mortgage statutory index to the Consumer Financial Protection Bureau’s average prime offer rate; authorize data calls short of a market conduct exam for targeted insurance market monitoring; and create licensing and examination authority for earned‑wage access providers.

Committee members pressed for operational details: Senator Rasmussen asked the dollar value held in the unclaimed property fund (Arnold said she did not have that figure immediately available but would follow up). Several senators pressed on staff counts, remote/field splits, and the exact FTE request tied to EV‑charger testing; Arnold said the Commerce department has about 460 staff systemwide and 22 people in weights and measures, and confirmed the governor’s request totals seven new FTEs in the biennium (six in the first biennium, seven in the second) with a staged approach for EV testing (one FTE initially, two later).

Deputy Commissioner Julia Dreyer clarified, when asked about a “state‑run” auto plan proposal described later in Arnold’s testimony, that the bill under consideration would be an administrative change to reduce intermediary costs for the Minnesota Automobile Insurance Plan and would not change benefit limits or funding mechanisms; she said she would confirm details such as any surcharge rule for the risk pool if requested.

Why it matters: Commerce regulatory and budget choices affect banking and insurance oversight, consumer protections against fraud, public health coverage benchmarks, and nascent areas of commerce such as EV‑charging accuracy and earned‑wage advances. Several proposals are framed as revenue neutral assessments intended to stabilize market functions rather than add general fund spending.

Arnold and staff said they will return later in the session with bill language and additional detail for the committee’s review.