Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Date:03/01/2006
ATTENDANCE
Time:09:51 AM to 11:42 AM
Balmer
*
Borodkin
X
Place:HCR 0107
Butcher
*
Carroll M.
*
This Meeting was called to order by
Coleman
X
Representative Marshall
Knoedler
X
Liston
X
This Report was prepared by
McCluskey
X
Christie Lee
Paccione
X
Penry
*
Welker
X
Cerbo
X
Marshall
E
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
HB06-1356
HB06-1043		Referred to the Committee of the Whole
Witness Testimony Only


09:52 AM -- House Bill 06-1356

Representative Judd, prime sponsor, presented House Bill 1356 and distributed a handout about the bill (Attachment A). He stated that the bill would eliminate duplicate licensing for collection agencies that perform traditional collection agency functions without affecting consumer protection. Representative Judd explained that currently, the Colorado Uniform Consumer Credit Code (UCCC) requires collection agencies to have a supervised lenders license if they collect supervised loans in default. Additionally, the Colorado Fair Debt Collection Practices Act requires collection agencies to be licensed when they collect consumer debt in default. He stated that these licenses are duplicative.


09:54 AM -- Laura Udis, representing the Colorado Attorney General's Office (AGO), Consumer Credit Division, testified in support of the bill. She stated that one of the duties of the AGO is to license collection agencies under the Colorado Fair Debt Collection Practices Act. Ms. Udis stated that her office did find the licenses to be duplicative and found that there is no consumer benefit in having the double licensing. She added that there are currently 14 companies now that have the double licensing.
BILL:HB06-1356
TIME: 09:56:52 AM
MOVED:Balmer
MOTION:Moved to refer House Bill 06-1356 to the Committee of the Whole. The motion passed 12-0.
SECONDED:McCluskey
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
Yes
Carroll M.
Yes
Coleman
Yes
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
Yes
Marshall
Excused
Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

09:58 AM -- House Bill 06-1043

Representative Coleman, prime sponsor, presented House Bill 1043 and distributed three handouts: a list of the members of the Consumer Insurance Council 2006 (Attachment B); a letter from American Family Insurance (Attachment C); and a packet from the Public Citizen (Attachment D). The bill would create the Colorado Consumer Insurance Board that would consist of 11 members appointed by the Governor, approved by the Senate, having expertise in insurance by March 1, 2007. The board would represent the public interest of insurance policyholders by providing the Insurance Commissioner guidance and oversight in the performance of his statutory duties and responsibilities.

10:05 AM

Representative Coleman spoke about amendment L.003, a strike below that would become the bill if passed (Attachment E). She stated that the amendment would have the Governor ensure that the membership of the board represents the different geographic areas of the state, rather than having the Governor appoint one member from each congressional district as stated in the original bill. The amendment also adds that the members of the board must include the following: one member representing a non-profit organization, one member representing the health care community, and one member representing the Providers Council within the Division of Insurance. She stated that the remaining eight members can be made up of consumer advocates. Representative Coleman stated that the Consumer Insurance Board would provide annual reports to the Business Affairs Committees in the House and the Senate.


10:14 AM

Representative Coleman responded to questions from the committee about the proposed board being duplicative of current programs within the Division of Insurance. There was committee discussion about the fiscal impact of the current Consumer Insurance Council and the proposed Consumer Insurance Board. In response to a question, Representative Coleman explained that the board would cover all types of insurance.

10:40 AM

Representative Coleman discussed the handout from American Family (Attachment C). She stated that it was an example of misinformation consumers are given. There was a discussion about the meaning of geographic areas.

10:47 AM -- Peg Brown, Division of Insurance, testified in opposition of the bill. She distributed two handouts: the Colorado Division of Insurance 2004 Complaint Ratio (Attachment F); and the Annual Report of the Commissioner of Insurance on Complaints Against Insurers (Attachment G). Ms. Brown talked about the current Consumer Insurance Council. She stated that the bill is unnecessary and duplicative.

10:56 AM

Representative Carroll asked whether a consumer complaint has ever triggered a market conduct exam on an insurance company. Ms. Brown stated that she did not know, but would look into it and try to find out. Representative Coleman responded Ms. Brown's comments about the bill. There was committee discussion about whether the existing system can handle the current complaints effectively. Representative Butcher requested that Ms. Brown break out how many of the complaints shown in Attachment F were settled on behalf of the consumer versus the insurance company.

11:05 AM -- Robert Ferm, representing the American Insurance Association, testified in opposition of the bill and mentioned that he would address his comments to L.003. He stated that in section one of the amendment it states that the board's purpose is to provide policy recommendations and assistance regarding consumer issues, however, he feels the bill gives the board much greater responsibilities than that. Mr. Ferm stated that the bill gives the board the ability to intervene, specifically to request, initiate, and to appear as a party in, any proceeding before the division concerning premium rate changes, rule-making, copayment or deductible amounts, tariffs, and modifications of service. Mr. Ferm feels the bill would also create the ability for a consumer to file an appeal through the board, creating another appellate remedy other than the Administrative Procedure Act, and thus, creating a duplicative system. Mr. Ferm distributed a handout regarding prior approval versus open competition (Attachment H). Representative Coleman stated that the bill does not address the file and use ability.

11:18 AM -- Clay Vigoda, Executive Director of the Colorado Home Alliance, testified in support of the bill. He stated that the bill is not duplicative because it provides legitimacy to consumer complaints. Mr. Vigoda talked about the current role of the Division of Insurance and Attachment D. Mr. Vigoda responded to earlier committee questions. He spoke about the fiscal note stating that it should be significantly less than what it shows.

11:29 AM

Representative Coleman distributed a memo prepared by Legislative Council about the funding options for the Colorado Consumer Insurance Board (Attachment I). Mr. Vigoda spoke briefly about the memo.


11:31 AM -- Steve Shapiro, an attorney for injured consumers, representing the Brain Injury Association of Colorado, testified in support of the bill. He stated that the board would be a great thing for consumers. He stated it would take the politics out of the process. Mr. Shapiro talked about his clients and how many of them do not know their insurance coverage or the pricing structure. Mr. Shapiro talked about the importance of education to consumers. Mr. Shapiro stated that it would be beneficial for someone to look into rate hikes and the reasons for them. He stated that the Insurance Commissioner does not timely respond to consumer complaints and discussed four cases he had that went completely through the litigation process before the Insurance Commissioner took any action on them.

11:37 AM

Representative Paccione disagreed with Mr. Shapiro's statement that the board would remove the politics, stating that the board would be appointed by the Governor.

11:39 AM -- Rob Hernandez, representing the Colorado National Association for the Mentally Ill, testified in support of the bill. He stated that the association likes the part of the bill that allows consumers to go to the board if their complaint has not been resolved by the division.

11:37 AM

The Vice Chairman pulled the bill off the table and stated that the committee would take action on Friday, March 3.

11:42 AM

The committee adjourned.