Representative Jeff Wardlaw

Insurance & Commerce (House) — March 31, 2025 (57:44)

and fixes it to where it's actually run like an everyday company, which is the way it should have been in the beginning. So with that, Mr.

Insurance & Commerce (House) — March 31, 2025 (57:51)

Chair, I'd appreciate a good vote. Thank you. Thank you,

Insurance & Commerce (House) — March 31, 2025 (57:07)

Having the insurance plan under the department that regulates the insurance plan was never a good idea. We had an instance a couple years ago with a tornado that wiped a school out up in northeast Arkansas, and one of the problems that was they wouldn't send their policy and they had a problem with their insurer which was school board association ended up not being a problem want to say that on the record but they wouldn't even send their policy to the interest department for help in the middle of that look in because they were sending it to their competition this changes all of that and fixes it to where it's a true agency away from the regulatory agency

Insurance & Commerce (House) — March 31, 2025 (56:36)

I think it's going to be very valuable to insure these buildings at their corrected values, which is in the bill. You'll read that in the first two pages of the bill. I think it's very important to understand where this is going. So we're not leaving this at the insurance department. We're going to move this over to TSS and put it under a division similar to EBD. That way it can actually be truly regulated by the insurance department, which is what the insurance department is there to do, regulate the state's insurance.

Insurance & Commerce (House) — March 31, 2025 (56:13)

for your bill. Mr. Chair, it's a very big bill. It's one of the bigger bills I've ever run in my career outside of EBD. It's taken a long time to get here. It's been a privilege of mine to serve as your chair of legislative council to get it to this point. And it's going to do good things for our institutions of higher ed, our schools, and our state properties.

Insurance & Commerce (House) — March 31, 2025 (55:28)

What will be our retention? I don't know that off the top of my head, Representative Perry, but I'll get it for you before we go to the floor. Okay. But there is a number, and we are purchasing reinsurance with a portion of the $85 million. Yeah, because, I mean, reinsurance costs have continued. I think $42 million of the dollars is for the premiums for the reinsurance. How much is it? I think it's $42 million for the premiums of that. Okay. Thank you, Mr. Chairman. Don't hold me to that

Insurance & Commerce (House) — March 31, 2025 (55:53)

number, but I'll get it to you exact. Thank you, Reverend Perry.

Insurance & Commerce (House) — March 31, 2025 (54:53)

Yeah, I guess I should have learned all

Insurance & Commerce (House) — March 31, 2025 (54:58)

that again today. it's roughly $1.5 billion is the amount of insurance you're going to be purchasing. The exposure is quite a bit higher than that, but if you look at the weather models and you see how they hit, we're pretty well covered under our exposure from any of the previous weather modeling. And Representative Steinwell, you've been in all those meetings. You're welcome to chime in at any moment.

Insurance & Commerce (House) — March 31, 2025 (54:32)

they buy the coverage. I was kind of dumbed all this or ignorant,

Insurance & Commerce (House) — March 31, 2025 (54:21)

you can't have a captive insurance to sell insurance if you don't have it. So you have to go out and buy that insurance up front. So they take that $85 million, they go out and

Insurance & Commerce (House) — March 31, 2025 (53:50)

So I don't know how many of you guys remember EBD when we set it up. We set this up very similar to the way we set up EBD. We set up a reserve fund. The consultants tell us that we need to keep anywhere from $30 to $60 million in reserve funds. So out of the $135 that will be transferred, $50 million automatically goes to reserve fund. That starts your investments day one. The other $85 million is there to purchase the premiums because the way a captive works, and we have some insurance experts in here, you being one of them,

Insurance & Commerce (House) — March 31, 2025 (53:45)

a great question, and I guess I should have explained how this thing works.

Insurance & Commerce (House) — March 31, 2025 (53:37)

this bill, but there's a bill coming through budget that does a

Insurance & Commerce (House) — March 31, 2025 (52:48)

I was told on a Zoom, Senator Gilmore and I were on about 10 Zooms last week from Monday to Friday, and this was the number one topic last week, and we were told that there was a way to protect state funds in that instance. So the reason I read those statements the way I read them is the rules have to be stated exactly that way. The only way we can control the way the rule's written is if it's in the record

Insurance & Commerce (House) — March 31, 2025 (53:10)

under legislative intent. So that's the reason everything was done the way it was done. All right, thank you.

Insurance & Commerce (House) — March 31, 2025 (52:39)

we only pay out for what we're

Insurance & Commerce (House) — March 31, 2025 (51:45)

versus they do a worse job. So there are some mechanisms in place.

Insurance & Commerce (House) — March 31, 2025 (51:27)

kept our consultant on staff to watch all that and to be able to give

Insurance & Commerce (House) — March 31, 2025 (51:32)

us an expert opinion on where we're headed and how we get there. I don't want to misspeak to you on where it is, but there was some convenience. There was some fees in there that get charged if they do a better job