Senate committee backs plan to create state captive to reduce school property insurance costs

The Senate Insurance & Commerce Committee voted to advance legislation that would create a state captive insurance program intended to stabilize and reduce property insurance premiums for K‑12 public and charter schools, public institutions of higher education and state‑owned properties.

Senate Bill 481 (sponsor: Sen. Gilmore) would move the program into a shared services agency (rather than leaving it in the Insurance Department, which would continue regulatory oversight) and grant broad rule‑making authority to implement coverage options, including provisions for institutions to select levels of coverage and to document any retained risk in writing. Sponsor testimony said the program is intended to consolidate coverage now spread across multiple entities and to make insurance more predictable and affordable.

Sen. Gilmore said the program is expected to provide substantial cost savings; witnesses and the sponsor referenced a preliminary estimate of roughly $15 million in first‑year savings and a proposed one‑time capitalization appropriation of about $136 million to seed the program. The sponsor said capital funds would be held in reserve to support the program over time.

Committee questions and concerns Senators on the committee asked about whether the bill would effectively require school districts to join the captive in order to receive certain state facility funding. Sen. Murdock expressed concern that the bill’s language could operate as a mandate because eligibility for financial participation from the academic facilities partnership program would require districts to be insured under the new program, which he said might limit local districts’ independent choice. Sen. Gilmore characterized the provision as an incentive rather than a mandate and noted most districts already participate in existing programs the bill would consolidate.

Other details and next steps The bill includes language intended to address deferred maintenance and to allow institutions of higher education to choose levels of coverage and to agree in writing to retained risks. Sponsors said the School Board Association and other stakeholders participated in the study and outreach over two years and that rulemaking will be subject to Administrative Law Committee review.

The committee approved the bill on a voice vote. Sponsors said further technical rulemaking and stakeholder engagement will follow if the bill advances.