OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

sHB-5205

AN ACT CONCERNING THE CONNECTICUT LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 19 $

FY 20 $

Resources of the General Fund

GF - Potential Revenue Loss

See Below

See Below

Note: GF=General Fund

Municipal Impact: None

Explanation

The bill results in a potential revenue loss to the General Fund to the extent that the expansion of membership in the Connecticut Life and Health Insurance Guaranty Association (CLHIGA) results in increased tax credit utilization.

Members of CLHIGA are permitted to fully offset assessments paid through Insurance Premium Tax credits. It is assumed that the expansion in CLHIGA membership by including health care centers will increase the risk of a default among the membership in any one year. More frequent assessments equate to a revenue loss as more Insurance Premium Tax credits are claimed.

There is no fiscal impact to the Insurance Department because the requirement in the bill for the Insurance Commissioner to approve certain policies and rates falls within current department activities.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future.

Sources:

Connecticut Insurance Department