Fiscal Note - SB 0010 - Creates Exception For Landlords to Education Requirements For Insurance Agent & Broker Licensing
L.R. NO. 0404-01
BILL NO. SB 10 w/ SCA 1
SUBJECT: Insurance-General, License-Miscellaneous, Landlord
TYPE: Original
DATE: February 24, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Insurance
Dedicated ($145,302) ($174,362) ($174,362)
Criminal Record
System $97,553 $128,654 $127,539
Total Estimated
Net Effect on All
State Funds ($47,749) ($45,708) ($46,823)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Insurance (INS) assume that in order to be
reasonably sure that no agent or broker participates in the business of
insurance that has been convicted of certain felonies, INS would be required
to conduct a name check through the Highway Patrol for every original and
renewal license issued by the director. INS states that since the department
does not have the authority to gather fingerprints from applicants,
fingerprint checks on the state or national level would not be possible. INS
has confirmed with the Highway Patrol that name checks through the Missouri
Mules System on license applicants would cost five dollars for each person.
INS states that as of January, 1996, INS licensed 62,342 agents and 7,403
brokers. INS states that agents and brokers renew their license biannually
on their original license's anniversary date. INS assumes that prior to the
issuance of each biannual renewal and prior to the issuance of an original
license, INS would have to conduct a background check by name through the
state system. INS estimates that 69,745 background checks at five dollars
each over the course of two years would cost INS $348,725. INS assumes the
costs for conducting the background checks on license applicants would be
split evenly between the fiscal years. INS states these calculations would
be the minimal estimate of fiscal impact. INS further states that it may be
argued that under the federal code those under the employ of an agent or
broker would also fall under the provisions of sections 1033 and 1034 of
Title 18, U.S.C.
Officials from the Department of Public Safety - Missouri State Highway
Patrol (MSP) assume that the licenses would be renewed every two years and
would result in an average of approximately 35,000 name record checks per
year. MSP states this does not take into consideration any new agents or
brokers. MSP would need two Data Entry Clerks ($14,856) to enter the name
checks. MSP also states that payment for the name record check must
accompany the request; however, the proposal does not discuss the terms for
payment between MSP and INS. In addition, if INS would decide to perform
fingerprint record checks the impact on MSP would change. MSP states that
fingerprint record checks take more time to perform therefore requiring more
personnel. Assuming that 35,000 fingerprint record checks would be needed to
be performed, MSP estimates that two Data Entry Clerks and two Fingerprint
Technicians would be needed. If INS would decide that all people involved in
the business of insurance fall under this proposal, then the impact on MSP
would change. MSP states that no figures were provided for this scenario.
MSP states the average for record checks per month per FTE varies depending
on the type of record check performed. Additionally, if this scenario
creates too many record checks additional capital facilities would be
required. MSP assumes the revenue and expenses for this proposal would be in
the Criminal Record System Fund.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
INSURANCE DEDICATED FUND
Costs - Department of Insurance
Background checks ($145,302) ($174,362) ($174,362)
ESTIMATED NET EFFECT ON
INSURANCE DEDICATED FUND ($145,302) ($174,362) ($174,362)
CRIMINAL RECORD SYSTEM FUND
Revenue - Missouri State Highway Patrol
Background checks $145,302 $174,362 $174,362
Cost - Missouri State Highway Patrol
Personal service (2 FTE) ($25,379) ($31,216) ($31,997)
Fringe benefits ($10,548) ($12,973) ($13,298)
Expense and equipment ($11,822) ($1,519) ($1,528)
Total Costs - Missouri State
Highway Patrol ($47,749) ($45,708) ($46,823)
ESTIMATED NET EFFECT ON
CRIMINAL RECORD SYSTEM FUND $97,553 $128,654 $127,539
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
$0 $0 $0
FISCAL IMPACT - Small Business
This proposal could affect small businesses to the extent that it reduces
administrative duties and related costs for continuing education. In
addition, this proposal would affect small businesses to the extent that it
increases administrative costs due to the requirements of this proposal.
DESCRIPTION
This proposal would exempt a landlord or any employee of a landlord who
enrolls tenants of a landlord as certificate holders under a group property
and casualty policy insuring the personal property and liability of such
tenants from the continuing education requirements for insurance agents and
broker licensing. In addition, background record checks would be performed
on all agents and brokers at license application or license renewal.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Insurance
Department of Public Safety
Missouri State Highway Patrol
This Fiscal Note is not an official copy and should not be quoted or cited.