Date: 03/13/2012

Final
BILL SUMMARY for SB12-110

HOUSE COMMITTEE ON JUDICIARY

Votes: View--> Action Taken:
Refer Senate Bill 12-110 to the Committee on FinanPASS



01:32 PM -- Senate Bill 12-110

Representative Levy, sponsor, presented Senate Bill 12-110 concerning a fund consisting of surcharges on insurance premiums to pay for costs associated with criminal prosecution of insurance fraud investigations. Originally recommended by the Joint Budget Committee, the reengrossed bill establishes a two-tier fee schedule for insurance companies based on total income received in Colorado by companies in the prior year. The fee replaces the current fee of $561 and is capped at $3,000. It will be set by the Commissioner of Insurance based on the direct and indirect costs of the investigation and prosecution of allegations of insurance fraud. Insurance companies with income above $1.0 million will pay $1,900 and those with income less than $1.0 million will pay $500. The bill moves the Insurance Fraud Cash Fund from the Department of Regulatory Agencies to the Department of Law.

The funding increase from this change will allow for expansion of insurance fraud investigations and prosecutions in the Department of Law. The Attorney General will include in his annual report and post on his website the number of employees dedicated to insurance fraud, referrals, open investigations, and the number of restitutions, fines, costs, and forfeitures obtained by line of insurance if possible. Pinnacol Assurance, a workers' compensation carrier, currently pays $561 plus an additional $285,000 for insurance fraud investigations and prosecutions for their policies. Under the bill, Pinnacol will pay the same rate as other companies in their tier.

01:34 PM -- Michael Dougherty, representing the Colorado Attorney General's Office, testified in support of the bill. Mr. Dougherty discussed the Criminal Justice Division of the Attorney General's Office and explained the mission of the Insurance Fraud Unit. He indicated that the unit is overloaded and spoke about the specific work they do. He discussed the two-tier fee structure proposed by the bill. He expressed his opinion that the bill brings Pinnacol Assurance into the fold and treats them the same way as other insurance providers. Mr. Dougherty responded to questions from the committee.


02:02 PM

Discussion continued about the two-tier fee system in the bill and about whether the bill contains adequate checks and balances. Mr. Dougherty continued to respond to questions from the committee.
BILL:SB12-110
TIME: 02:08:30 PM
MOVED:Kagan
MOTION:Refer Senate Bill 12-110 to the Committee on Finance. The motion passed on a vote of 9-1, with one member excused.
SECONDED:Pabon
VOTE
DelGrosso
Yes
Duran
Yes
Kagan
Yes
Lee
Yes
Nikkel
Yes
Pabon
Yes
Ryden
Yes
Sonnenberg
No
Waller
Excused
Barker
Yes
Gardner B.
Yes
Final YES: 9 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS