State Auditor Nicole Galloway today released an audit of the Insurance Dedicated Fund and the Insurance Examiners' Fund. Both funds are operated under the Missouri Department of Commerce and Insurance, which during the period of the audit (fiscal years 2016-2018) was named the Department of Insurance, Financial Institutions and Professional Registration.
The report, which gave a rating of "good," highlighted concerns in two areas. It found that $1.5 million from Insurance Dedicated Fund was used to pay costs incurred by the Department of Health and Senior Services (DHSS) for maintaining and operating a poison control hotline. State law requires appropriations from the fund to be used solely to pay expenditures incurred by the Department of Commerce and Insurance.
A similar finding was noted in the previous audit of the fund. The audit recommended that the department work with the General Assembly to ensure all appropriated disbursements from the fund are reasonable and proper, and relate to the department's overall function.
The second finding concerned the tax credit that insurance companies are allowed to receive for examination costs. Missouri is one of only five states to provide such a credit, and insurance companies received approximately $14.8 million in examination fee tax credits in the three fiscal years covered by the report.
The audit found the Department of Commerce and Insurance makes no attempt to determine the cost-benefit of the tax credit in an annual analysis provided to the General Assembly. Measuring the cost-effectiveness of the program would better help legislators determine if continuation of the tax credit program is justified.
The audit recommended the department provide this information to the General Assembly; if legislators do not have the information, the audit stated, they should consider legislation to reduce or eliminate the tax credit. As with the audit's other finding, a similar issue was noted in prior reports.
The complete audit can be found here.