Committee reviews amendment to move public-sector risk pools to insurance oversight, add solvency tools

The Commerce and Consumer Affairs subcommittee on Thursday reviewed a proposed amendment to Senate Bill 297 that would transfer regulatory authority for pooled risk management programs from the Office of the Secretary of State to the New Hampshire Insurance Department and apply insurance solvency tools to those pools.

The amendment would add a licensure requirement for pooled risk management programs, require periodic financial reporting and risk-based capital (RBC) calculations, give the insurance commissioner authority to approve rates and examinations, and authorize the commissioner to require a guarantee fund or other backstops. It would also exempt licensed pooled risk management programs from being treated as third-party administrators under the state’s TPA definition.

Supporters said the change is intended to reduce the chance of insolvency by giving regulators the tools they use for insurers. Opponents, and some pool representatives, warned the move could reduce local control, add administrative cost and risk affecting tax-exempt status for public-sector pools.

"We did note that when the proposal went to OLS, they added section 1, and we don't like that section 1, so we have an alternative," said Michelle Hee, director of life and health at the New Hampshire Insurance Department, describing technical edits the department prefers to the language that appeared after the bill went to legislative services. She said the department proposes to add a definition that would exempt a pooled risk management program license under the new chapter from being considered a TPA so the pools would not need multiple licenses.

Insurance department staff, represented in the hearing by a presenter identified as…