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DCBS director and BOLI staff say draft is administratively feasible but can accept tighter guardrails
Summary
DCBS Director Sean O'Dea and BOLI's Josh Nasby told MLAC the SB 1506 dash 1 draft segregates funds and is administratively feasible; both signaled openness to adding statutory guardrails or a tighter 'collar' on fund growth and position counts at the committee's request.
Sean O'Dea, director of the Department of Consumer and Business Services, told MLAC the department provided technical input and that the amendment’s segregation provisions would be administratively feasible if properly implemented. He cautioned that an unexpected downturn after rate-setting could reduce revenues and that BOLI would take a proportionate share of any revenue shortfall.
"Our worst case scenario...we set rates after doing financial forecasting...and then ultimately, our revenues would come in below our revenue targets," O'Dea said, explaining DCBS’s need for clarity so it can model rates and exercise statutory levers if needed.
Josh Nasby of BOLI highlighted several draft protections: creation of a separate BOLI expenses fund, separate assessment adjustments, a prohibition on using WBF monies to meet BOLI obligations, and MLAC authority to review plans if the BOLI fund requires a balance increase. Both Nasby and O'Dea said they would work with the sponsor and committee to tighten any necessary language about position caps and fund targets.
