House Committee on Business Affairs and Labor (02/17/2006)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:	02/17/2006	ATTENDANCE

Time:	08:08 AM to 09:03 AM	Balmer	X
		Borodkin	X
Place:	HCR 0107	Butcher	E
		Carroll M.	*
This Meeting was called to order by		Coleman	X
	Representative Marshall	Knoedler	E
		Liston	X
This Report was prepared by		McCluskey	X
	Christie Lee	Paccione	*
		Penry	E
		Welker	X
		Cerbo	X
		Marshall	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB06-1330		Witness Testimony Only

08:09 AM -- House Bill 06-1330

Representative Romanoff, prime sponsor, presented House Bill 1330. He explained that the bill would require property and casualty insurers to report certain claim and expense information to the Insurance Commissioner within the Department of Regulatory Agencies (DORA), and to make the same available to the public. He stated it would inform DORA why rate increases are necessary. He stated that the insurance companies are opposed to the bill because they say it is redundant, burdensome, and dangerous. Representative Romanoff added that he would like to give the opponents more time to work with him on the bill. Representative Marshall stated that the committee would only be hearing testimony at today's hearing and the bill would be laid over for action to a later date. Representative Romanoff continued explaining the bill, and stated that he does not want to expose individual claimants by requiring insurance companies to disclose individually identifying information.

08:12 AM -- Steve Rubin, representing Copic Insurance Company, testified in opposition to the bill. He gave some background of Copic to the committee. Mr. Rubin stated that the bill asks for a lot of information that is already provided in the company's annual report that is filed with the Insurance Commissioner. He stated that in addition, the information is public and available to the public. Mr. Rubin stated that the provision in the bill that requires the insurance company to identify how much money goes to injured parties involved in an accident would be nearly impossible. He explained that when a claim in paid, the insurance company knows how much the check was for, but it does not know how much actually goes the injured party because others, such as attorneys, are paid out of the same check. There was committee discussion about the amount of information that the bill requires the insurance company to disclose. The committee also discussed whether the bill would be a disincentive to companies to do business in Colorado.

08:28 AM -- Rich Gebhardt, representing State Farm, testified in opposition to the bill. He stated that similar bills have been proposed in the past, and the legislature has always opted to leave the law as it is. Mr. Gebhardt showed the committee a Schedule P, the form that insurance companies already file with the Insurance Commissioner. He explained how detailed the information already is in the Schedule P. Committee discussion ensued about what the actuarial data is based on. Mr. Gebhardt stated there are around 50 factors used to determine rates.

08:38 AM -- Kelly Campbell, representing the Property and Casualty Insurers of America, testified in opposition to the bill. She stated that over the last couple of years in Colorado, auto insurance rates have dropped, new companies have started up, and that Colorado is one of 6 states in the nation that does not have a medical malpractice crisis. Ms. Campbell stated that under the bill, companies must base their rates on Colorado data. This would cause a problem for small carriers or new companies in Colorado that might not have enough Colorado data to competitively set their rates. She stated that the bill would not help consumers, and is too broad.

08:44 AM

There was committee discussion about what Colorado data small and new companies are missing, and why that information is not available to them. Ms. Campbell stated that the insurance industry is very competitive and that insurance companies do not want to share that type of data. Committee discussion followed about the uninsured rate in Colorado and what the bill would do to address that problem. Ms. Campbell stated that the main reason people do not have insurance is they cannot afford it. The bill would create more regulation, that would lead to more administrative tasks, that would ultimately lead to higher premiums, and thus not help the uninsured problem.

08:49 AM -- Jerry McDermott, representing the Colorado Trial Lawyers Association, testified in support of the bill. He gave an explanation of what the bill would require the insurance companies to disclose that they currently do not in a Schedule P. He does not think the bill would cause an increase in litigation if it passes. There was committee discussion on whether the information would be used by consumers. Representative McCluskey asked why the information cannot be put into plain language so consumers can understand it. Mr. McDermott agreed that would be very helpful, but questioned the reasonableness of that happening.