Oklahoma Insurance Office Seeks Independence From State Budget

Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire

February 23, 2010 Tuesday 04:08 PM EST

369 words

Oklahoma Insurance Office Seeks Independence From State Budget

Jesse A Hamilton

OKLAHOMA CITY

The Oklahoma Insurance Department is seeking greater financial independence within the state government, trying to separate itself from the state appropriations process by getting behind a new bill that would accomplish that — though it may also clear the way for higher department fees.

The bill, which has now passed the state Senate’s Appropriations Committee, designates the insurance office as a non-appropriated agency — an effort to save the state money it would no longer have to provide for funding. The bill’s author, Sen. David Myers, points out that the state’s banking and securities agencies have already been set as non-appropriated agencies.

The self-sufficiency bill had been requested by the insurance office. Commissioner Kim Holland said it represents the agency doing its part to lower public spending. As it stands, her agency sends about $200 million to $220 million to the general fund each year in collected taxes and fees. The general fund appropriates about $2.5 million back to the agency for a total budget that is just more than $10 million, according to Holland. This bill would negate the return of the $2.5 million “and give us the authority to raise fees as necessary” to make up the difference, Holland told BestWire.

Proponents of the idea say it would save that $2.5 million in state spending, and Oklahoma would join the majority of other states that have similar arrangements. The legislation now must be considered before the overall senate. Holland said it currently has the support of the budget chairmen in both chambers.

“We would just join the ranks of many,” Holland said, pointing out that it’s “not an unusual thing” in other states. It would also allow her agency to set aside funds for capital projects, such as technology improvements. “A non-appropriated agency can develop a surplus for capital purchases that are not permissible under an appropriations standpoint.” That gives the department, she said, “an opportunity to more effectively address whatever needs you have when they come up.”

Holland is seeking re-election this year for a second four-year term (BestWire, Feb. 22, 2010).

(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)

February 24, 2010