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Licensing Processing Fees Are Inequitable; Permit DOI Vendor to Charge Different Processing Fees Based on Effort and Cost (January 2015)

Summary

The Department of Insurance's (DOI's) Agent Services Division (ASD) issues licenses to the insurance industry, the bail bond industry, and non-insurance business entities. DOI entered into a contract with Pearson VUE in December 2011 to provide administrative services for all license types regulated by the department. The Program Evaluation Division found that Pearson VUE's licensing processing fees are disproportionate to the relative cost of processing the different types of license applications. PED also found that DOI has improved licensure services through outsourcing, and that ASD continues to work with Pearson VUE to address licensee concerns. The General Assembly should direct ASD to issue a request for proposal for licensing administrative services that allows the contractor to charge different processing fees based on the cost and effort necessary to process licenses for the different industries.

Final Report

Executive Summary

Recommendation

Presentation

Handout

Relevant Legislation:

  • House Bill 196/Senate Bill 120 (2015–16): An act to require that the Department of Insurance include differential license processing fees when issuing its next request for proposal for a licensing administrative services contract. This legislation was not enacted.

Agency Actions:

  • ASD reviewed the current statutory language and determined it already provides sufficient statutory authority for contractors to submit bids that included different processing fees based on the effort necessary to process different types of licenses.
  • Subsequently, a request for proposal for a contract that included the provision of license application processing after the receipt of an application was accepted by ASD. The new contract period begins January 2, 2017 and includes different processing fees based on the effort necessary to process licenses for the insurance industry, non-insurance business entities, and the bail bond industry.

Press Coverage: