Senate Finance Committee hears testimony on HB1491; Insurance Department backs dual framework while stakeholders flag reinsurance and deposit concerns

The Senate Finance Committee held a lengthy public hearing on House Bill 1491, which would create a dual regulatory framework for political-subdivision risk pools distinguishing accessible pools (remaining under the Secretary of State) and non-accessible, advanced-premium pools (regulated by the Insurance Department). The Insurance Department presented a detailed amendment that adds reserve, actuarial and audit requirements, corrective-action triggers, and a transition framework for pools that opt to change models.

DJ Benton Court, Commissioner of the New Hampshire Insurance Department, said the proposal "establishes a dual framework for pooled risk management programs, formally recognizing both accessible and non-accessible models." Court and department actuaries urged careful calibration of solvency and capital standards, stress testing, reinsurance back-stops, governance structures and clear rulemaking to operationalize the change.

Health Trust executive director Scott D. Roach said his organization supports stronger solvency standards but warned that specific amendment provisions could be impracticable for some health pools. He highlighted three concerns: a reinsurance attachment point written in the amendment at 105% that he said may not be available in the marketplace for an organization of their size; a deposit requirement that as written could equate to roughly $50 million for his trust; and a mandated five-year look-back for rate-setting that he argued is inappropriate for health lines because recent medical trends and COVID-era anomalies would distort pricing. "That amount that we'd be required to put in today would equate to about $50 million," Roach said of the deposit language.

Representatives from the Secretary of State's office participated as neutral witnesses; an outside consultant (identified in the transcript as Huah) warned lawmakers that legally non-accessible health pools that cannot be assessed during runoff are rare or nonexistent unless fully reinsured and that without reinsurance non-accessible design risks unpaid claims.

Margaret Burns of the New Hampshire Municipal Association testified in favor of HB1491 as passed by the House, saying it clarifies choice for municipalities between assessable and non-assessable models and allows local governments to plan for mid-year assessments where applicable. Local school and municipal finance officials urged stability of rates and stronger oversight.

Committee members asked detailed questions about fidelity bonds, the interaction of reserves and reinsurance, how transition approval by member governing bodies would work and whether a per-member veto was intended; department staff and the chair explained the draft seeks flexibility, expects many implementation details to be addressed in rulemaking, and will use a scribe to iterate language with stakeholders.

What happens next: The chair said the committee intends to continue refining draft language and to use legislative staff and agency scribe processes; committee members discussed the possibility of preserving two models this year and considering a longer-term transition to a single regulator in future sessions.