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State insurance office seeks analyst after finding widespread over‑ and mis‑valued insured properties
Summary
Department of Administration’s insurance division told the committee one analyst is currently responsible for billions in state property and that an additional property valuation analyst is requested to audit values and remove obsolete or overvalued items from the insurance roll.
Senator Seinenfeld asked the Department of Administration to explain why agencies had entered incorrect property values and whether the state had been overpaying insurance for demolished or misvalued buildings. Faith Knowlton, administrator of the department’s insurance division, said the division currently has one analyst responsible for over $11 billion in property and for more than 8,500 vehicles, and that staffing limits have contributed to valuation errors.
“I have one analyst that is responsible for over $11,000,000,000 in property,” Knowlton said. She told the committee the division has found multiple instances in which agencies were paying insurance on buildings that had been demolished years earlier and that agencies sometimes overstate replacement values by including land in their calculations.
Why it matters: overinsured property values drive higher premium costs for the state’s group insurance program. Knowlton said the division has a four-year appraisal plan to audit building values and that adding a property‑value analyst would let the office require agencies to contact the division before adding properties or making value changes.
On refunds and savings, Knowlton said the division can request refunds only within the current year when overbilling is discovered. Deputy director Steve Bailey and Knowlton said initial appraisals removed about $500 million in over‑insured property values; Knowlton said that early corrections reduced annual insurance charges by roughly $120,000. She said the division plans a continuing appraisal process and that adding the requested analyst would allow immediate review and better controls.
Ending: The committee requested follow-up documentation on the four-year appraisal plan and additional details on the requested position’s duties and expected savings. No formal vote was taken during the hearing.
