Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Risk Management topic
No spam. Unsubscribe anytime.
Committee hears request for property-value analyst after state found over-insured assets
Summary
Department of Administration requested an additional staff position in risk management to audit property values after finding some buildings insured after demolition and noting one analyst currently manages billions in insured property.
The Joint Finance Appropriations Committee was told the Department of Administration's risk and insurance program needs more staff to audit state property valuations after multiple instances of incorrect or outdated property entries were discovered.
Frances Lippett, legislative services analyst, described the Department of Administration's office of risk management and its retained risk fund and continuous appropriations. Senator Veil asked whether the state had paid insurance on buildings that no longer existed and whether refunds might be available.
Faith Knowlton, administrator for the department's division of insurance, told the committee a single analyst currently manages a property portfolio with an insured value in excess of $11 billion and oversees more than 8,500 vehicles. "It would be possible for our staff of 1 to be able to manage what the agencies are doing outside, which is the reason we are requesting this position," Knowlton said, noting agencies sometimes overstate replacement values — for example, including land in replacement-cost estimates — and occasionally leave demolished buildings in the inventory.
Knowlton said the division has started a four-year appraisal process to improve accuracy and that recently completed appraisals removed about $500 million in over-insured property values, yielding roughly $120,000 in premium savings so far. She said refunds are available only within the current year.
Committee members asked for additional detail. Representative Tanner requested a roll-up of ongoing continuous appropriations for the retained risk account; Lippett agreed to provide the list. Knowlton said adding a property-value analyst would let agencies contact risk staff before adding or changing property records and should speed identification of errors.
Why it matters: Overstated or obsolete property valuations can increase insurance premiums and leave the state paying for coverage it does not need. The division's limited staffing has reduced its ability to audit agency entries and ensure accurate replacement-cost calculations.
Next steps: The division described ongoing appraisals and asked the committee to consider funding an additional full-time analyst and related one-time equipment costs. Committee members asked staff to provide a more detailed accounting of reserves and continuous-appropriation balances for risk funds.
