Bill Summary for Bill Number HB06-1036

Date: 02/06/2006

Final
BILL SUMMARY for HB06-1036

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View-->	Action Taken:
Moved amendment L.002 (Attachment G). The motion Moved to refer House Bill 06-1036, as amended, to	Pass Without Objection PASS

05:58 PM -- House Bill 06-1036

Representative M. Carroll, prime sponsor, explained that House Bill 1036 came out of the Interim Auto Insurance Committee. She distributed two handouts: a fact sheet about House Bill 1036 (Attachment E), and a memo prepared for the Interim Auto Insurance Committee about evaluating the switch from no-fault to tort (Attachment F). She stated the bill requires auto insurance companies to offer medical payments coverage to drivers and to keep proof of rejection. Failure to do so would result in a default coverage of $5,000 medical payments coverage. She added that before rejecting the coverage, consumers must be advised of the potential consequences of declining coverage. Representative Carroll explained some of the problems that can occur to a person who has opted out of medical payments coverage.

06:05 PM

Representative Carroll stated that the advice for coverage varies greatly from carrier to carrier and broker to broker. She stated the bill has a consumer protection piece to it that allows the policyholder to opt out once they know the consequences. Representative Carroll talked about an amendment she would be offering, L.002 (Attachment G), that deals with a mechanism of implementation. She mentioned that a few witnesses had to leave early, but that she would make their testimony available (Attachment H). Representative Carroll explained that the bill does not require duplicative coverage. There was a question from the committee regarding underinsured coverage. Is there other recourse for receiving the money. Representative Carroll stated eventually an injured person would be covered under other means.

06:20 PM -- Mike Hodges, representing the Colorado Trial Lawyers Association, testified in support of the bill. Mr. Hodges responded to questions regarding disclosure to clients and enumerated the reasons he supported having consumers opting out of default coverage.

06:26 PM -- Mark Nixon, representing Progressive Insurance, testified in support of the bill and said that it allows consumers to choose the best option for themselves. He said that he believes it would also increase consumer education. He distinguished between a mandatory offer of medical payments coverage versus mandating medical payments coverage. He responded to questions pertaining to potential amendments to the bill that his company would support.

06:30 PM -- Don Mielke, representing the Colorado Chiropractors Association, testified in support of the bill.

06:31 PM -- Cheryl Hutter, representing herself, testified in support of the bill and gave her personal account of her problems with the switch from no fault to tort. She stated she was involved in a minor hit and run accident and they never found the driver. She felt her insurance company should pay, but never did. She added that she had health insurance and PIP at the time and still had problems.

06:35 PM -- Bill Imig, representing the Property Casualty Insurance Association and Allstate Insurance Company, testified in opposition to the bill. He stated that his company believes under the current law, people are buying medical payments coverage when they need it. He stated that for the most part, medical payments coverage is not needed with other coverage. Mr. Imig stated that even with the right to reject, consumers may believe that the state is telling consumers to buy it. The committee asked questions about the cost of medical payments coverage. Mr. Imig explained that Allstate stated it costs about $100 to $300 a year for $5,000 coverage.

06:39 PM -- Rich Gebhardt, representing State Farm, testified in opposition of the bill. He addressed two things: how the tort system is working, and why a mandated medical payments coverage with rejection is wrong. He stated that 3/4 of the 38 states that have a tort system do not mandate any kind of medical payments coverage. He told the committee the cost annually for medical payments coverage for a young and old driver. Representative Carroll asked Mr. Gebhardt out of the states that have a tort system, how many are switching to no-fault. Mr. Gebhardt responded that most states are moving away from no-fault and switching to tort. Mr. Gebhardt was asked how doctors are paid in the states that do not have mandatory medical payments coverage. He stated that in those states, 85 percent of the population either have military health care coverage, health insurance, or something else that would cover the cost.

06:48 PM -- Representative Carroll responded to the mandatory medical payment coverage discussion that was discussed earlier and stated that the bill does not mandate medical payment coverage, it allows the policyholder to reject it if they choose to. She stated it parallels current law. There was some concern whether consumers will understand they can affirmatively reject this policy.


BILL:	HB06-1036
TIME:	06:51:31 PM
MOVED:	Carroll M.
MOTION:	Moved amendment L.002 (Attachment G). The motion passed without objection.
SECONDED:	Coleman
		VOTE
	Balmer
	Borodkin
	Butcher
	Carroll M.
	Coleman
	Knoedler
	Liston
	McCluskey
	Paccione
	Penry
	Welker
	Cerbo
	Marshall
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB06-1036
TIME:	06:52:00 PM
MOVED:	Carroll M.
MOTION:	Moved to refer House Bill 06-1036, as amended, to the Committee of the Whole. The motion passed 8-4.
SECONDED:	Borodkin
		VOTE
	Balmer	No
	Borodkin	Yes
	Butcher	Yes
	Carroll M.	Yes
	Coleman	Yes
	Knoedler	No
	Liston	Yes
	McCluskey	No
	Paccione	Excused
	Penry	Yes
	Welker	No
	Cerbo	Yes
	Marshall	Yes
Final YES: 8 NO: 4 EXC: 1 ABS: 0 FINAL ACTION: PASS