Summary#

SB 661, “Relative to pooled risk management programs,” would repeal and reenact New Hampshire’s existing RSA 5-B, the law governing pooled risk programs for political subdivisions. Its stated goal is to support these programs while setting financial and operating standards. The bill was vetoed by the governor, so it is not law.

• Pools would have to keep contingency reserves within set ranges: 12%–20% of annual contributions for health coverage, and 30%–40% for workers’ compensation and other property-and-casualty coverage. They would also have to maintain a separate member equity stabilization fund.
• If a pool’s assets were insufficient to meet its obligations, participating members would have to pay assessments, shared in proportion to their annual contributions. Pools would also have to replenish reserves and hold two public hearings before setting annual rates.
• The Secretary of State would have exclusive authority to enforce the chapter, investigate violations, issue cease-and-desist orders, and seek court-ordered correction of a reserve deficiency or appointment of a receiver. Fines could be up to $5,000 for each violation.
• Pool boards would have fiduciary duties to member political subdivisions and would have to use care, diligence, prudence, and skill in managing the pool. Pools would have to disclose that they are not insurers and that members may face assessments.
• Pools would have to file annual information, audits, and actuarial evaluations with the Department of State. The bill sets a $250 annual filing fee.

What it means for you#

• Cities, towns, counties, school districts, and other participating public entities: Your pool could require additional contributions if it lacks enough assets or its reserves fall below required levels. The bill requires disclosure of this risk, but does not set a maximum assessment.
• Members leaving a pool: Any member equity stabilization fund balance held on the member’s behalf would have to be returned within three months after the member leaves.
• Pool boards and programs: They would have to meet reserve, reporting, actuarial, and public-hearing requirements. Board members would have legal duties to act for the benefit of member political subdivisions.
• Taxpayers and the public: The bill does not create a new insurance program or guarantee fixed-cost coverage. It would make certain program information public, but claims analysis and claims-management information would remain confidential.
• Current law: RSA 5-B already exists, but the supplied materials do not include its prior text. I cannot verify which provisions are new and which restate current law.

Money#

The fiscal note estimates annual state savings of $250,000 or more, but says local and county costs could increase by an unknown amount.

• The fiscal note attributes expected state savings to less need for outside legal and actuarial experts. It lists no new positions or funding; its expenditure table shows a reduction of $250,000 or more from FY 2027 onward.
• The state would collect a $250 annual filing fee from covered pools.
• Counties and local governments could face higher contributions, assessments, and administrative costs. The fiscal note gives no estimate.
• The bill requires pools to hold reserves and replenishment amounts, which could tie up funds that might otherwise be returned to members.

What is unclear#

• The prior version of RSA 5-B was not supplied, so the exact change from current law cannot be verified.
• The bill does not set a cap on member assessments or explain how members could challenge an assessment.
• It is unclear how the required public hearings and actuarial findings would affect rate-setting in practice.
• The fiscal note does not estimate the costs to pools or participating public entities.
• The bill sets reserve minimums and maximums but does not explain how a pool should resolve competing financial needs if a reserve reaches its maximum.

Case for#

• A possible argument for the bill is that firm reserve requirements and annual actuarial reviews could help identify financial shortfalls before a pool cannot meet its obligations.
• Requiring members to be told that assessments may be required could help public entities understand the financial risks before joining or renewing.
• Clear board duties and stronger enforcement powers could help protect participating public entities. The fiscal note says the state expects fewer costs for outside legal and actuarial help.

Case against#

• One concern is that assessments could add unpredictable costs for municipalities and counties, including costs that may be difficult to cover within an existing budget.
• The bill does not cap assessments or provide a detailed process for members to dispute them.
• Reserve requirements and replenishment duties could reduce funds available for other local needs or for return to members.
• The bill gives the Secretary of State broad investigative and enforcement powers, but the supplied text leaves some practical details—such as how disputed assessments are resolved—unclear.