Nebraska Insurance Director Defends Budget, Says Fee Changes Will Add Millions to Cash Fund
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Summary
Insurance Director Eric Dunning told the Appropriations Committee the governor's budget plus a biennial increase in out‑of‑state producer licensing fees would bolster regulatory capacity and generate about $3.6 million a year in cash fund revenue; he cautioned against a one‑time sweep of the voluntary Excess Liability Fund because of litigation and participation risks.
Department of Insurance Director Eric Dunning told the Nebraska Unicameral’s Appropriations Committee that the governor’s budget and proposed licensing changes would strengthen the state’s regulatory capacity and support continued industry growth.
Dunning said the department enforces solvency rules, licenses agents and approves rates and forms. He highlighted the domestic insurance industry’s size in Nebraska, noting domestic insurers hold about $1.2 trillion in assets and that the state ranks highly in surplus and employment in the sector. “That places us third in the country and, first in the nation in surplus,” he said.
Why it matters: the department proposes to increase the biennial licensing fee for out‑of‑state insurance producers from $50 to $100, a change Dunning said would bring Nebraska’s fees in line with other states and is expected to raise roughly $3.6 million annually into the department’s cash funds. He also described an internal decision not to pursue a fund sweep that appeared in narrative but was not included in the bill; instead the department reduced assessments going into the fund.
Key debate and concerns: Senators pressed Dunning about the department’s purview over product offerings and affordability; Dunning said those are policy decisions that the department enforces rather than sets. He also explained concerns about a proposed $10 million transfer from the voluntary Excess Liability Fund to the general fund, citing litigation risk and the possibility that perceived sweeping of the fund could prompt voluntary participants to withdraw, raising adverse‑selection concerns and reducing available coverage for malpractice victims.
Stakeholder comments: Robert M. Bell, executive director of the Nebraska Insurance Federation, testified in support of maintaining accreditation and staffing at the department and said domestic insurers value the department’s regulatory examinations. Bell said the federation has no objection to the state using fees from out‑of‑state producers to support the general fund, but stressed that staffing levels and accreditation are important to industry stability.
What happens next: The committee heard questions and stakeholders’ remarks and will consider the budget recommendations and related bills in subsequent fiscal and committee steps.
