Bill would let childcare centers, foster homes form pooled risk programs to lower liability costs
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Summary
SB 6 14 would authorize child-care centers and foster-family homes to form regulated pooled-risk programs (captives) subject to audits and actuarial review to reduce rising liability insurance costs; the insurance department said scale and oversight are essential and suggested considering regional pools.
Senator Denise Ricciardi presented SB 6 14 to allow child-care centers and foster family homes to form risk pools to share liability and property coverage, subject to oversight by the Secretary of State, annual financial audits and actuarial review. Her stated goal was to lower overhead costs that threaten provider viability and limit childcare supply.
Pete Nye, deputy commissioner at the Insurance Department, told the committee the idea is worth exploring but cautioned that a minimum of 10 participants (the bill’s floor) may not yield sufficient volume to obtain economies of scale; he recommended exploring larger multi-state pools or other approaches and emphasized strong financial oversight to avoid the solvency problems that have previously disrupted risk pools.
Supporters including employers, early childhood advocates, and workforce groups said the cost of liability coverage is driving center closures, capped enrollments and limits on expansion; Stay Work Play and the statewide chamber representatives argued pooling could stabilize supply without additional state spending.
Stakeholders and the department agreed on further technical work: drafting amendments to reflect realistic minimum membership or regional options, clarifying oversight and audit requirements, and modeling solvency scenarios. The committee closed the hearing with stakeholders pledging to continue work on amendments and operational design.
