HB 1491 introduces Chapter 420-R to existing law, establishing a framework for political subdivision risk management programs in the state. This chapter aims to facilitate the creation of these programs, which will be exempt from state taxation and certain insurance regulations. Key provisions include eligibility and reporting requirements, oversight authority, and financial standards, ensuring that self-insurance arrangements are not classified as insurance companies under state law. The bill emphasizes the benefits of pooled risk management, such as loss prevention and cost structures based on actual experiences, while mandating that programs obtain approval from the commissioner before establishment and maintain financial security measures.

The bill also outlines specific operational standards, including the requirement for a surety bond, governance by a board of directors from participating subdivisions, and financial transparency through regular reporting to the commissioner. It introduces penalties for false statements and establishes grounds for regulatory control, allowing the commissioner to manage programs that fail to comply with requirements. Additionally, HB 1491 enhances investment guidelines by deleting previous language that permitted less stringent practices, thereby ensuring that assets are invested in high-quality, U.S. dollar-denominated instruments. Overall, the legislation aims to strengthen oversight, promote financial integrity, and enhance the risk management capabilities of local governments.

Statutes affected:
Introduced: 5-B:1, 5-B:2, 5-B:3, 5-B:4, 5-B:5, 420-E:2, 420-G:11, 402-H:11-b
As Amended by the Senate: 420-R:5
Version adopted by both bodies: 420-R:5
HB1491 text: 5-B:1, 5-B:2, 5-B:3, 5-B:4, 5-B:5, 402-H:1, 420-E:2, 420-G:11, 402-H:11-b