NU Online News Service, April 23, 11:34 a.m. EDT

Washington Governor Chris Gregoir is considering vetoing a provision of an appropriations bill that would transfer $10 million from the state's Insurance Commissioners Regulatory Account to the general fund, an official said.

Marty Brown, the governor's legislative director, said Insurance Commissioner Mike Kreidler's office contacted the governor and asked for a veto.

He added a veto is "under serious consideration," and the governor plans to act on the budget by May 4.

As stated in the bill (SB 6446), $5 million would be transferred to the general fund on June 30 and $5 million on June 30, 2011.

Commissioner Kreidler's letter to the governor states that taking the funds "would leave us with a $1.1 million deficit in fiscal year 2011, growing to a $5.1 million shortfall in fiscal year 2012 and continuing indefinitely."

He said the transfer was revealed to him only in the final budget proposal, and he added there was no consultation with his staff.

A statement via e-mail by Rich Roesler, spokesman for the Office of the Insurance Commissioner, said: "Like most other states, Washington has faced many difficult budget decisions recently. But we feel this is an ill-conceived policy option, particularly in light of the substantial amount of new work we're undertaking–with virtually no additional staff–due to federal health care reform."

He said removing $5 million a year from the regulatory account would be akin to cutting the agency's $25 million annual budget by 20 percent.

"That would be a devastating cut," said Mr. Roesler.

American Insurance Association (AIA) Assistant Vice President Steven Suchil said he wrote a letter to the governor's office asking for a veto as well.

The letter, he explained, advised that transferring the funds would set a bad precedent, and he also said an adequately funded, fully staffed Office of the Insurance Commissioner is necessary to ensure a viable, competitive insurance market in the state.

In a statement, Mr. Suchil said insurers currently pay over $900 million in gross premium tax biennially in Washington.

"Underfunding the OIC could result in a reduction of staff that lessens…essential services and impinges on the ability of the OIC to act fully in its supervisory role," said the AIA letter to the governor.

The bill can be viewed at http://apps.leg.wa.gov/documents/billdocs/2009-10/Pdf/Bills/Senate%20Passed%20Legislature/6444-S.PL.pdf.

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Bid To Grab Insurance Dept. Funds May Get Wash. Governor's Veto

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