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Program A: Administration/Fiscal

Program Authorization: La. Constitution, Article IV, Sec. 11; Title 22 of Louisiana Revised Statutes; Act 83 of 1977 (Reorganization Act); Act 850 of 1984 (Equal Opportunity in Insurance); Act 477 of 1992 (Reorganization Act); and Act 517 of 1992 (operations of Louisiana Insurance Guaranty Association with the Department of Insurance)

PROGRAM DESCRIPTION

The mission of the Administrative/Fiscal Program is to continually evaluate the Department of Insurance's effectiveness and efficiency for the purpose of ensuring compliance with Louisiana statutes and all applicable state and federal laws, rules, and regulations. The Administrative/Fiscal Program must provide management oversight and administrative support to all offices in the department and monitor all department expenditures.

The goals of the Administrative/Fiscal Program are:

1. Ensure that the department is spending its appropriated funds wisely and according to all applicable laws, rules, and regulations.

2. Provide the highest level of service, including adequate training and supervision, to department personnel to ensure compliance with all applicable federal, state, and civil service vice laws, rules, and regulations.

3. Monitor and enhance the existing internal system of management.

The Administration/Fiscal Program includes the following activities (organizationally expressed as offices): Office of the Commissioner, Office of Management and Finance, and Office of Receiverships.

The Office of the Commissioner must fulfill the duties of administering and enforcing the provisions of the Louisiana Insurance Code (Title 22 of the Louisiana Revised Statutes of 1950, as amended), providing management oversight and administrative support to the programs making up the Department of Insurance, including internal audits of those programs and setting policies and procedures in order to help and protect policyholders of Louisiana. This office must also provide a liaison function with the Louisiana Insurance Guaranty Funds and keep the Louisiana public informed and educated in all areas of insurance.

The Office of Management and Finance administers the following areas: Revenue Collection and Auditing, including premium taxes, assessments, fees, and penalties; Human Resource Management; Management Information System; Administrative Services; Fiscal Affairs, including payroll, purchasing, accounts payable, appropriations, financial reporting, property control, professional services contracts, and program evaluations. The department is the fourth largest revenue collector in the state.

The Office of Receiverships must manage all insurance companies placed in receivership as effectively and efficiently as possible. It is extremely important that all available company assets and liabilities are accounted for and liquidated in accordance to all applicable laws, rules, and regulations.

OBJECTIVES AND PERFORMANCE INDICATORS

The Administration Program provides management and oversight to the agency. The success of this program is reflected in the success of other programs in the agency. Performance information consistent with this program's strategic plan and the statewide model for administrative/support programs will be reported next year. For FY 1998-99, program objectives and performance indictors include:

1. In FY 1998-99, the Administrative/Fiscal Program, through the Office of the Commissioner, will provide management oversight, including internal audit and administrative support to all offices in the department.

2. In FY 1998-99, the Administrative/Fiscal Program, through the Office of the Commissioner, will retain accreditation by the National Association of Insurance Commissioners (NAIC).

3. In FY 1998-99, the Administrative/Fiscal Program, through the Office of the Commissioner, will hold hearings for insurance companies, agents, brokers, and all other entities regulated by the department in a timely manner to resolve the problem(s) prompting such hearings.

4. In FY 1998-99, the Administrative/Fiscal Program, through the Office of the Commissioner, will issue cease and desist orders for any entity in noncompliance with the Louisiana Insurance Code.

5. In FY 1998-99, the Administrative/Fiscal Program, through the Office of the Commissioner, will issue all necessary legal opinions in a timely manner.

6. In FY 1998-99, the Administrative/Fiscal Program, through the Office of the Commissioner, will provide access to department records to persons requesting public information, along with the development and distribution of information on various insurance issues to benefit the citizens of Louisiana.

7. In FY 1998-99, the Administrative/Fiscal Program, through the Office of Management and Finance, will ensure that the department is spending its appropriated funds wisely and in accordance with all laws, rules, and regulations.

8. In FY 1998-99, the Administrative/Fiscal Program, through the Office of Management and Finance, will assure the appropriate and timely collection and depositing (within 48 hours) into the State Treasury of all revenue due to the State of Louisiana by all regulated entities or persons requiring services of the Department of Insurance.

1 Surplus lines broker is a person who solicits, negotiates, or procures a policy of insurance with an approved, unauthorized insurance company (surplus lines company) when insurance cannot be procured from insurers licensed to do business in this state.

9. The Administrative/Fiscal Program, through the Office of Management and Finance, will design, develop, and implement an effective integrated information system by June 30, 1999.

1 Integrated information system is a normalized, computerized database system that allows for a single repository of all information on persons transacting business with the Department of Insurance, in which the information is accessible by persons with appropriate authorizations.

10. In FY 1998-99, the Administrative/Fiscal Program, through the Office of Management and Finance, will provide a high level of service to department personnel by resolving computer-related problems within one to four hours and will provide necessary training to allow utilization of the computer system resources by all department employees.

11. In FY 1998-99, the Administrative/Fiscal Program, through the Office of Receivership, will continue the liquidation of all estates in receivership, with court approval.

1 Liquidation is the standing of a company when, upon court order, a receiver is charged with the duty of securing, marshaling, and distributing all assets of the estate of the failed company. In addition, the court-appointed receiver is responsible for evaluating the claims of all insured claimants and other interested parties and eventually distributing the available assets, as set forth in Louisiana statutes and approved by the courts.

12. In FY 1998-99, the Administrative/Fiscal Program, through the Office of Receivership, will make a final distribution to all claimants for the purpose of dissolution of estates.

1 Calculated by dividing total recovery by the number of companies liquidated.

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded from self-generated revenues. These funds are derived from various fees and licenses authorized by R.S. 22:1078; auditing fees collected from insurance companies audited; and a charge against the Insurance Rating Commission Program for personal services expenses.

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

 

DESCRIPTION

 

 

 

 

 

$0

$10,367,978

89

 

ACT 18 FISCAL YEAR 1997-1998

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

 

 

 

 

 

$0

$10,367,978

89

 

EXISTING OPERATING BUDGET - December 10, 1997

 

 

 

 

 

$0

$33,113

0

 

Annualization of 1997 -'98 Merit Pay Adjustment(s)

$0

$42,243

0

 

1998 -'99 Merit Pay Adjustment(s)

$0

($9,086)

0

 

Retirement Rate Adjustment(s)

$0

($137,174)

0

 

Attrition Adjustment(s)

$0

$887

0

 

Adjustment(s) for Civil Service, Training and Other Statewide Interagency Transfer Activities

$0

$55,458

0

 

Risk Management Adjustment(s)

$0

($12,674)

0

 

Maintenance of State-owned Buildings Adjustments

$0

$1,162

0

 

UPS Fees

$0

$13,324

0

 

Legislative Auditor Fees

$0

$879,140

0

 

Increase in projected collections from bail bond fees

 

 

 

 

 

$0

$11,234,371

0

 

TOTAL RECOMMENDED

 

 

 

 

 

$0

$866,393

0

 

DIFFERENCE (TOTAL RECOMMENDED AND EXISTING OPERATING BUDGET)

The total means of financing for this program is recommended at 108.3% of the existing operating budget. It represents 97.3% of the total request ($11,536,957) for this program. The increased funding is primarily due to increased funding for risk management premiums and increases in bail bond fee collections.

PROFESSIONAL SERVICES

$43,134

 

Management consulting for software maintenance

 

 

 

$43,134

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

$90,091

 

Legislative Auditor expenses

$6,625,169

 

Bail bond fee remitted to the District Attorney in each parish except Orleans for indigent defense. In New Orleans, the payment is remitted to the Judicial Administrator for the Orleans Parish Criminal District Court.

 

 

 

 

 

$6,715,260

 

TOTAL OTHER CHARGES

 

 

 

 

 

Interagency Transfers:

$2,400

 

Department of Treasury

$7,135

 

Department of Civil Service

$1,146

 

Office of Information Services

$49,924

 

Office of the Attorney General for legal services

$84,025

 

Division of Administrative Law

$7,703

 

Uniform Payroll System charges

 

 

 

$152,333

 

TOTAL INTERAGENCY TRANSFERS

ACQUISITIONS AND MAJOR REPAIRS

This program does not have funding for Acquisitions and Major Repairs for Fiscal Year 1998-1999.


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