Date: 01/14/2010
Final
Presentation by the Division of Insurance
COMMITTEE ON JOINT HEALTH AND HUMAN SERVICES
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02:35 PM -- Presentation by the Division of Insurance
Marcy Morrison, Colorado Commissioner of Insurance, began the presentation and introduced her staff. Three handouts regarding the division and the regulation of insurance in the state were distributed to the committee (Attachments C through E).
02:39 PM
John Postolowski, Deputy Commissioner of Finance and Administration, described the different sections of the Division of Insurance and their responsibilities. He explained that the Division of Insurance is responsible for licensing insurers, collecting premium taxes, rate approval. He discussed the types of insurance that have "prior approval" rate systems and "file and use" systems. Mr. Postolowski discussed the division's response when an insurance company files rates the division believes are excessive. The division also reviews the financial statements of insurers to ensure that the insurers are solvent and can pay future claims, and audits insurance companies to make sure that the companies are reporting accurate information. Mr. Postolowski stated that the division has four actuaries on staff who work annually to develop a lost-cost ratio for workers' compensation insurance. He stated that the lost-cost factor was reduce in the past year, which reduced employer's workers compensation premiums this year. He described the division's activities with regard to producer licensing, stating 120,000 individuals and corporations are licensed to sell insurance in the state. He described the market analysis process for large insurance corporations who sell in many states. He explained the jurisdiction of the division and the plans that are regulated by the department. Mr. Postolowski stated that the division only regulates about one-third of the insurance marketplace, and the division does not have authority to intervene with regard to self-insured plans, Medicaid, Medicare, and the Children's Basic Health Plan. He explained that the division does not handle complaints regarding CoverColorado or Pinnacol Assurance.
02:53 PM
Peg Brown, Deputy Commissioner of Consumer Affairs, described the compliance and investigations activities of the department, which focus on wrongful activities by producers. She explained that the division's investigative division also focuses on finding insurers who are illegally selling insurance without a certificate of authorization from the department, as well as illegal self-funded plans. She stated that the number of illegal self-funded plans is increasing nationally. She emphasized that not every insurer is subject to regulation by the state. Ms. Brown described the Senior Health Program, which helps seniors make choices regarding Medicare and long-term care insurance. Ms. Brown highlighted a report produced by the Division of Insurance on complaints against insurers. Ms. Brown described handout E, which provides statistics regarding how individuals get their insurance in Colorado. She reiterated that the Division of Insurance has jurisdiction over about 30 percent of the health plans in the state.
03:03 PM
Jo Donlin, Director of External Affairs, described health insurance-related legislation that has passed in recent years (Attachment D), including bills that required health plans to cover certain benefits. Ms. Brown discussed the regulation of self-funded plans pursuant to the federal Employment Retirement Income Security Act (ERISA), and explained that House Bill 09-1338 made changes to bring the state into compliance with federal ERISA law. Ms. Brown discussed an additional bill, House Bill 09-1349, which relates to continuation of coverage after an employee has involuntarily separated from employment. Ms. Donlin highlighted consumer resources available on the Division of Insurance's website. Ms. Donlin described legislation that provided additional enforcement powers to the Division of Insurance.
03:15 PM
Commissioner Morrison gave concluding remarks. Senator Sandoval asked for clarification of the division's role with regard to CoverColorado, and Mr. Postolowski stated that the division does not have jurisdiction over CoverColorado and any complaints that are received by the Division of Insurance are directed to the company.