Superintendent of Insurance
"With such significant revenue involved, the honor system is a wholly inadequate approach to tax administration," State Auditor
Franchini, who has served as insurance superintendent since 2010, did not express surprise Wednesday, saying "I've been aware of the shortcomings in tax collection for three years."
The auditor's report on unpaid tax revenue comes at a time when state government leaders are trying to deal with a financial pinch. The state must address a
Franchini disagrees with the state auditor on the amount of money outstanding in unpaid taxes on insurance premiums, pegging it closer to
"My hope is we can just stop the leak, get it collected and feel confident that the state is getting what it's supposed to get," Franchini said.
Oversight of the insurance industry in
With new requirements for insurance coverage under the Affordable Care Act, Franchini said, his office became aware that even as the amount collected from the premium tax grew in recent years, it lagged behind what was expected.
He worked for three years to get a bill passed through the Legislature that would have simplified the rules and helped with tax collections, but the proposal never got a committee hearing. "The collections have been more like a clerking system, not an auditing system," he said.
Franchini said he then supported efforts to hire an auditor and outside law firm who would look at what his office can do to collect what is owed under current laws.
Money for that was approved by the 2016 Legislature and included in the budget bill signed by Gov.
As part of his efforts, Franchini said, he approached Attorney General
Franchini said Balderas asked the insurance fraud division within the Superintendent of Insurance Office to pursue the matter and that investigation is ongoing. He could not elaborate, he said, but expects the work to be finished before the end of the year.
His office also is hiring two more staffers with the goal of sending collection notices and past-due letters to companies by the end of the year. He said collection efforts can reach back 10 years as long as there is adequate documentation.
His office also is moving toward a more unified software system from the
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