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Senate committee weighs changes to oversight and reserve rules for pooled risk programs
Summary
The Senate Finance Committee heard hours of testimony on SB 661, a bill to set minimum/maximum contingency reserves and strengthen oversight of pooled risk programs after recent failures and surprise assessments at some trusts. Supporters say it prevents insolvency; opponents say it would outlaw non‑assessable models and strain small municipal budgets.
The New Hampshire Senate Finance Committee heard extensive testimony on SB 661, a bill from Sen. Sharon Carson that would set minimum and maximum contingency reserve levels for pooled risk management programs and give regulators new tools to intervene when a pool shows signs of financial stress.
"Pooled risk programs were created to allow political subdivisions to self‑insure," Carson said in her introduction, citing recent experience that prompted the bill. She told the committee the measure would establish solvency protections, require clearer disclosure and create an emergency triggering mechanism so the secretary of state could seek a receiver to stabilize an impaired pool.
Secretary of State David Scanlon described the regulator's role under RSA 5‑B and the recent collapse of the New Hampshire Interlocal Trust (NHIT). "When we were here discussing this legislation a year ago, I raised concerns about a couple of the pooled risk organizations having significant financial issues," Scanlon said, and he outlined steps taken to secure a receiver and protect members' claims.
Lance Turgeon, the court‑appointed receiver for NHIT, detailed a timeline of losses, pended claims and assessments that were required to keep claims paid. He testified that cash and contingency reserves fell sharply, that claims were pended (about $1.2 million at one point), and that member assessments and a settlement helped stabilize the trust.
HealthTrust, the state's largest risk pool, opposed SB 661. "If this bill were to pass, it would outlaw HealthTrust's non‑assessable model," Scott Roach, HealthTrust executive director, told the committee. Roach said HealthTrust operates on a multi‑year solvency period and has been rebuilding reserves by adding a capital risk charge to rates rather than issuing surprise assessments; he argued the bill would replace choice with a single mandated model.
SchoolCare's finance director, Jennifer Burke, said the bill "takes meaningful steps" but urged the committee to adopt an amendment from prior proceedings that would create a limited restricted fund equal to 4% of prior‑year contributions to be used before assessments. SchoolCare described that approach as promoting predictability and avoiding mid‑year financial disruption for municipalities and school districts.
Municipal and county representatives warned SB 661 could create new unpredictable costs. "The contingency reserve levels adopted by the regulator for one year of reserves are inadequate," Kathy Stacy of the New Hampshire Association of Counties said, and other municipal witnesses said small towns and local agencies could not absorb surprise assessments without severe budgetary consequences.
The hearing included technical discussion about how to measure reserves (contribution leverage, multi‑year solvency vs year‑to‑year), the role of actuarial analyses, and whether returning surplus to members should be smoothed rather than distributed annually. Proponents emphasized that recent court actions and the NHIT receivership demonstrated the need for clearer statutory thresholds; opponents warned that codifying a single reserve model would remove options that many municipalities rely on.
Committee action: the public hearing was closed and the committee moved briefly into executive session for internal discussion; no final committee vote on SB 661 was recorded in the public transcript. The committee adjourned after the executive session.
Next steps: SB 661 remains under committee consideration; senators discussed possible amendments including adjustments to reserve percentages, smoothing return‑of‑surplus provisions, and mechanisms by which a pool could petition for a higher reserve allowance.
