The Pennsylvania Insurance Department announced this week that it now has access to a dedicated funding source, thanks to Gov. Tom Corbett’s recently signed 2013-14 budget and newly enacted legislation, Act 46.
This dedicated budget funding will come from a portion of industry fees and assessments already being collected by the department.
The new funding will be used by the department to pay all costs and expenses associated with its general operations. It will also help bring about a long-term financial stability and flexibility to the department, according to the regulators.
Prior to Act 46, the insurance department was part of the general fund, the general government operations(GGO) budget, according to the department’s spokesperson Melissa Fox. The department will remain as part of the general fund, “but now a certain part of insurance regulatory fees and assessments will be dedicated to our agency,” she said.
“We will still prepare our annual budget proposal using GGO budget timeframes, and I believe the Commissioner will still provide testimony to the Appropriations Committees in both Chambers,” the spokesperson said. “So the transparency continues. But this will give us the means and security to do long term planning.”
Until Act 46 was passed, Pennsylvania was one of only two states in the nation that did not have some type of dedicated funding structure for its insurance regulatory functions, the spokesperson said.
Pennsylvania is the fifth-largest insurance marketplace in the country and the 14th-largest globally. Its insurance department oversees the operations of 1,700 insurance companies offering more than $92 billion of annual premiums in all lines of insurance products. Estimates indicate that more than 121,000 people work in the insurance industry in Pennsylvania, according to the state’s insurance department.
Pennsylvania Insurance Commissioner Michael Consedine commented that Act 46 is “a historic change for the department and helps us ensure that Pennsylvania keeps pace with an ever-increasing global marketplace.”
“Having a financially stable, professional insurance regulator is one of the primary factors in bringing insurance jobs to a state and with dedicated funding we’re making an even stronger case for insurance sector job-growth in Pennsylvania,” Consedine said.
“With an insurance marketplace that is highly diverse, stable and growing, we are focused on providing a regulatory environment for the insurance business that promotes a competitive marketplace, which serves to benefit our consumers.”
Responsibilities of the insurance department include: licensing insurance companies and agents that do business in the state; examining insurance companies regarding their financial solvency and market conduct; reviewing insurance rates and coverages; and ensuring policyholders, claimants and insurers are treated fairly and equitably.
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