Second Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06-0236.01 Kristen Forrestal HOUSE BILL 06-0236 HOUSE SPONSORSHIP Coleman, SENATE SPONSORSHIP Tochtrop, House Committees Senate Committees Business Affairs and Labor A BILL FOR AN ACT Concerning the creation of the Colorado consumer insurance board for the purpose of providing counsel to the division of insurance. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Interim Committee on Auto Insurance. Creates the Colorado consumer insurance board (board). Requires the governor to appoint, with the consent of the senate, 11 members to the board who represent business and consumer interests, one from each congressional district, and not more than 6 from the same political party. Requires the members, to the extent possible, to have experience in various insurance matters. Establishes that the members shall be appointed in staggered terms beginning March 1, 2007, and shall meet at least 6 times per year. Prohibits any person who has certain financial or proprietary interests in a corporation that is subject to regulation by the division or the commissioner from being appointed to the board. Requires the board to represent the public interest of Colorado insurance users. Grants power to the board to provide policy guidance to the commissioner of insurance (commissioner), gather and prepare information to be used at hearings regarding proposed insurance legislation, annually review the performance of the commissioner, and contract with employees outside of the employ of the division or the department. Specifies that the board may participate as a party in any proceeding before the division concerning premium rate changes, rule-making, copayment or deductible amounts, tariffs, and modifications of service. Prohibits the board from being a party to any individual complaint between an insurer and individual. Requires the commissioner to work in cooperation with the board to represent the public interest. Requires the commissioner to serve the board with notice of all rate changes for insurers regulated under title 10 of the Colorado Revised Statutes. Allows members of the public to respond in writing to any changes recommended by the board. Requires the attorney general to advise the board in all legal matters and to provide representation in proceedings in which the board participates. Repeals the board on July 1, 2016, subject to legislative review under the sunset law. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Part 1 of article 1 of title 10, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 10-1-133. Colorado consumer insurance board - creation - appointment - attorney general to represent - repeal. (1) (a) There is hereby created the Colorado consumer insurance board for the purpose of providing policy guidance to the commissioner; advising the commissioner regarding insurance rate change requests; reviewing proposed legislation regarding insurance rate changes and legislation affecting the interests of residential, small business, rural, health, and commercial policyholders, and advising the commissioner on these matters; and reviewing the performance of the commissioner. (b) Beginning no later than March 1, 2007, the governor, with the consent of the senate, after approval by an assigned committee of reference, shall appoint eleven members to the board, one from each congressional district, with no more than six from the same political party. In order to ensure the representation of business and consumer interests, members shall be appointed to represent each of the following: (I) One member who shall represent the insurance industry; (II) One member who shall represent the hospital industry; (III) One member who shall represent health care providers; (IV) One member who shall represent large corporations; (V) One member who shall represent small businesses; (VI) One member who shall represent labor organizations; (VII) One member who shall represent rural communities; and (VIII) Four members who are consumer advocates. (c) The members shall, to the extent possible, be persons with five or more years of expertise or experience in consumer-related insurance matters, underwriting, claims handling, rate regulation, and insurance law. In making appointments to the board, the governor shall ensure that the membership of the board represents the different geographic areas of the state. Of the members of the board appointed for terms beginning March 1, 2007, four of such members, with no more than two from the same political party, shall be appointed for terms of four years and three shall be appointed for terms of two years. Thereafter, members of the board shall be appointed for terms of four years. The governor shall not appoint any person to membership on the board if such person has any conflict of interest with such person's duties as a member of the board. The governor may remove any board member for misconduct, incompetence, or neglect of duty, subject to the consent of the senate. Board members shall serve without compensation, but members who reside outside the counties of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson shall be entitled to reimbursement for reasonable actual expenses to attend board meetings in Denver. The board shall meet at least six times per year, and the schedule of meetings shall be made public throughout the state. (d) No person shall be appointed to the Colorado consumer insurance board who has any financial or proprietary interest, either directly or indirectly, in a corporation that is subject to regulation by the division or the commissioner. This paragraph (d) shall not apply to a person whose interest derives solely from ownership of shares in a mutual or pension fund. (e) It is the duty of the board to represent the public interest of Colorado policyholders, and, specifically, the interests of residential, rural, small business, health, and commercial policyholders, by providing guidance and oversight for the commissioner in the performance of his or her statutory duties and responsibilities as specified in this title. The powers and duties of the board shall include, but not be limited to, the following: (I) To provide general policy guidance to the commissioner and the division regarding rule-making matters, legislative projects, general activities, and priorities of the division; (II) To gather information, formulate policy positions, and prepare analysis and testimony for the commissioner for use at public hearings, including legislative hearings, on proposed legislation regarding insurance rate changes and legislation affecting the interests of residential, small business, rural, health, and commercial policyholders; (III) To review annually the performance of the commissioner; (IV) To contract with actuaries, economists, or other employees outside of the employ of the division or the department as may be necessary to carry out the duties of the board. (2) The Colorado consumer insurance board may petition for, request, initiate, and appear and intervene as a party in, any proceeding before the division concerning premium rate changes, rule-making, copayment or deductible amounts, tariffs, and modifications of service. Notwithstanding any provisions of this section to the contrary, the board shall not be a party to any individual complaint between an insurer and an individual. (3) The commissioner shall represent the public interest and, to the extent consistent therewith, the specific interests of residential, rural, health, commercial, and small business consumers by working in cooperation with the Colorado consumer insurance board regarding matters that involve proposed changes in an insurer's rates, copayment, or deductible amounts, and in matters that involve rule-making that have an impact on the premium rates, copayments, and deductible amounts; the provisions of services or the premium rates to consumers, and the factors that affect rates, copayments, or deductible amounts. The commissioner shall serve the Colorado consumer insurance board with notices of all rate changes for any insurer regulated under this title. (4) The commissioner shall allow members of the public to respond in writing to any changes recommended by the Colorado consumer insurance board. (5) It is the duty of the attorney general to advise the Colorado consumer insurance board in all legal matters and to provide representation in proceedings in which the board participates. (6) This section is repealed, effective July 1, 2016. Prior to such repeal, the board shall be reviewed as provided for in section 24-34-104, C.R.S. SECTION 2. 24-34-104, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read: 24-34-104. General assembly review of regulatory agencies and functions for termination, continuation, or reestablishment. (47) The following agencies, functions, or both, shall terminate on July 1, 2016: The Colorado consumer insurance board, created pursuant to section 10-1-133, C.R.S. SECTION 3. Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution (August 9, 2006, if adjournment sine die is on May 10, 2006); except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.