Bill Summary for Bill Number SB09-103

Date: 02/05/2009

Final
BILL SUMMARY for SB09-103

SENATE COMMITTEE ON HEALTH AND HUMAN SERVICES

Votes: View-->	Action Taken:
Adopt prepared amendment L.005 (Attachment C). Th Refer Senate Bill 09-103, as amended, to the Commi	Pass Without Objection PASS

02:43 PM -- Senate Bill 09-103

Senator Carroll introduced Senate Bill 09-103. The bill defines as an unfair claim settlement practice and a deceptive act or practice in the business of insurance the practice of providing any pay, salary, reward, bonus, promotion, or other financial incentive to any person involved in the review of a claim for benefits or to person performing utilization review in connection with the denial of a claim. She stated that there is nothing in the bill that prevents the denial of insurance claims. She stated that other states have expressly prohibited providing financial incentives for the denial of claims. She responded to questions from Senator Mitchell regarding the number of states that have prohibited the practice in statute, responding that 16 states have expressly prohibited the practice, and that every state that has heard litigation on the issue has ruled that it is an unfair business practice. She responded to additional questions from Senator Mitchell regarding whether Colorado's courts would rule similarly, responding that they have, but that codifying the practice in statute will ensure that the Division of Insurance has authority over the complaints. Amendment L.005 was distributed to the committee (Attachment C). She responded to additional questions regarding incidents in which insurers rewarded employees for denying claims, giving an example of a case in which the practice occurred. Senator Carroll responded to questions from Senator Schultheis regarding whether states with similar statutes have experienced an increase in premiums. Senator Carroll further elaborated on why the practice should be consider an unfair practice or deceptive act. Senator Carroll emphasized that she is not aware of any insurance companies currently engaged in the practice.

03:06 PM -- Mike Hodges, Colorado Trial Lawyers Association, testified in support of the bill. He stated the bill will provide a deterrent effect. He responded to questions from Senator Mitchell.

03:14 PM -- Craig Ewing, representing himself, testified that insurance should be there when people need help, and that creating incentives for insurance company employees to deny claims is inappropriate. He responded to a question from Senator Mitchell regarding cases in which companies were sued for providing incentives to deny claims.

03:19 PM -- Sheryl Hutter, Colorado Cross Disability Coalition, testified in support of the bill. She stated the bill will help protect consumers. She stated that she has had personal experience with the activities the bill is seeking to prohibit.

03:22 PM -- Ben Price, Colorado Association of Health Plans, testified that the association has not taken a position on the bill. He noted that members of the association had initial concerns with the clarity of the bill's language, but not its intent. He stated that Senator Carroll has worked with the association on amendment L.005, and the amendment will make the bill's language more clear. He stated he believed the practice is not occurring in Colorado today.

03:23 PM -- Robert Ferm, American Insurance Association, stated that it is inappropriate to provide incentives to deny claims, and stated that the bill includes specific language prohibiting the practice. He stated the language in amendment L.005 has been reviewed and the industry is growing more comfortable that the bill will not interfere with legitimate practices of insurance companies. He stated that he believes that current law already prohibits the practice, but that the bill's language is more specific. He responded to questions from Senator Schultheis regarding whether there will be an increase in legal costs as a result of the bill.

03:30 PM -- Cindy Compton, Land Title Association of Colorado, testified in opposition to the bill in its current form. She stated that the practice that is prohibited by the bill is already prohibited by current law. She responded to questions from Senator Mitchell regarding incidents in which claims may be properly denied.

03:34 PM -- Art Karsteedt, American Family, testified regarding the case referenced by Senator Carroll as an example in which a company was sued for providing incentives related to claim denial.

03:35 PM -- Dan O'Neil, Pinnacol Insurance, testified that the bill's provisions are already in current law. He spoke to language he would like to see included in Amendment L.005.

03:37 PM

Senator Carroll gave concluding remarks regarding the bill.


BILL:	SB09-103
TIME:	03:39:20 PM
MOVED:	Carroll M.
MOTION:	Adopt prepared amendment L.005 (Attachment C). The motion passed without objection.
SECONDED:
		VOTE
	Carroll M.
	Lundberg
	Mitchell
	Morse
	Newell
	Schultheis
	Tochtrop
	Boyd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	SB09-103
TIME:	03:40:44 PM
MOVED:	Carroll M.
MOTION:	Refer Senate Bill 09-103, as amended, to the Committee on Appropriations. The motion passed on a 7-1 roll call vote.
SECONDED:
		VOTE
	Carroll M.	Yes
	Lundberg	Yes
	Mitchell	Yes
	Morse	Yes
	Newell	Yes
	Schultheis	No
	Tochtrop	Yes
	Boyd	Yes

Final YES: 7 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS