HOUSE COMMITTEE ON

BUSINESS, LABOR AND CONSUMER AFFAIRS

 

 

May 14, 2003 Hearing Room E

8:30 A.M. Tapes  118 – 119

 

MEMBERS PRESENT:            Rep. Betsy Close, Chair

Rep. Derrick Kitts, Vice-Chair

Rep. Mary Gallegos

Rep. Jeff Merkley

Rep. Mike Schaufler

 

MEMBERS EXCUSED:             Rep. Diane Rosenbaum, Vice-Chair

Rep. Bill Garrard

 

STAFF PRESENT:                  Megan Palau, Committee Administrator

Mike Reiley, Committee Assistant

 

MEASURES HEARD:                     SB 260 – Public Hearing

SB 285 – Work Session

SB 749 – Work Session

SB 341 – Work Session

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 118, A

003

Chair Close

Calls meeting to order at 8:40 a.m. Opens public hearing on SB 260.

SB 260 – PUBLIC HEARING

008

Megan Palau

Committee Administrator. Summarizes SB 260. Explains that conflict amendments will be forthcoming.

030

Sen. Lenn Hannon

Senate District 3. Testifies in support of SB 260. Declares potential conflict of interest.

080

Rep. Merkley

Asks if amendment is consistent with the intent of bill (EXHIBIT A).

083

Sen. Hannon

Thinks the overall scope of the bill needs to be considered.

092

Chair Close

Asks if credit scoring is a recent concept.

096

Sen. Hannon

Affirms.

097

Chair Close

Asks how many states it is used in.

098

Sen. Hannon

Responds he does not have that information.

100

Chair Close

Asks how scoring was determined before credit was used.

103

Sen. Hannon

Explains how scoring was determined.

110

Chair Close

Asks if not having credit card would be detriment to obtain insurance.

116

Sen. Hannon

Affirms.

130

Rep. Schaufler

Clarifies the intent of the bill regarding credit scoring.

143

Sen. Hannon

Responds.

146

Rep. Schaufler

Poses question regarding credit and driving record.

148

Sen. Hannon

Explains the idea and principal of the insurance is to prevent risk.

150

Rep. Kitts

Asks if identification of potential high risk customers would benefit other customers.

167

Sen. Hannon

Provides opinion on the correlation.

178

Rep. Kitts

Asks if insurance companies are still able to use gender and age to determine risk.

180

Sen. Hannon

Responds it is no longer allowed.

190

Lou Beres

Clackamas County. Testifies in support of SB 260.

244

Rep. Kitts

Speaks on insurance industry actions to cover and protect against loss. 

255

Beres

States that the issue is fairness.

265

Rep. Kitts

Asks if insurance companies can base insurance rates on type of car.

270

Beres

Answers that they do.

279

Rep. Merkley

Asks if insurance companies use credit scoring to target affluent individuals for purchasing additional product.

287

Beres

Explains use of credit scoring.

310

Rep. Kitts

Explains liability and credit scoring.

340

Joe Schaefer

Washington County. Testifies in support of SB 260. Provides personal account of credit scoring.

TAPE 119, A

001

Schaefer

Continues testimony.

077

Rep. Kitts

Asks if Mr. Schaefer has copies of correspondence.

080

Schaefer

Notes that he will provide copies to committee.

085

Chair Close

Asks if Mr. Schaefer anticipates additional problems obtaining insurance.

090

Schaefer

Answers that he does.

105

Dean Delavan

Testifies in support of SB 260. Provides personal account of credit scoring.

166

Steve Dixon

Oregon State Public Interest Research Group (OSPIRG). Submits and summarizes prepared testimony in support of SB 260 (EXHIBIT B).

231

Rep. Merkley

Asks for clarification of “redlining.”

235

Dixon

Offers clarification.

273

Kelsey Wood

Gordon Wood Insurance Agency. Submits and summarizes prepared testimony in support of SB 260 (EXHIBIT C).

326

Chair Close

Asks, as an insurance agent, how he uses credit scoring.

334

Wood

Explains how agencies use independent companies for determining credit scores.

350

Chair Close

Asks if insurance agencies can question credit reporting from independent agencies.

355

Wood

Responds.

360

Rep. Schaufler

Requests the location of the agency to which Mr. Wood earlier referred.

362

Wood

Answers agency is Sublimity.

365

Rep. Merkley

Asks if redlining is an issue.

370

Wood

Explains that some insurance agencies can determine risk more effectively than others.

400

Betty West

Service Representative, Farmers Insurance. Submits and summarizes prepared testimony in support of SB 260 (EXHIBIT D).

TAPE 118, B

044

John Powell

State Farm Insurance Companies. Submits and summarizes prepared testimony in opposition to SB 260 (EXHIBIT E).

131

Shawn Miller

National Association of Independent Insurers. Testifies in opposition to SB 260.

216

Joel Ario

Administrator, Insurance Division, Department of Consumer & Business Services. Submits and summarizes prepared testimony in support of SB 260 (EXHIBIT F).

296

Rep. Kitts

Clarifies auto insurance rates can be determined by occupation. Inquires what types of information are used to determine insurance rates.

300

Ario & Powell

Respond to individual qualifications.

325

Ario

Addresses stereotypes.

336

Rep. Merkley

Asks Mr. Ario if he has seen (EXHIBIT E). Speaks on the study regarding credit scoring. Requests if the study bares any relevance to the particular issues facing the committee.

368

Ario

Affirms he has seen the report. Concurs the study does not demonstrate an effect whatsoever. Speaks on the concurrence that correlation between credit scoring and driving records exists.

380

Rep. Merkley

Interjects that race could also show a correlation, but that it is discarded for other reasons.

383

Ario

Concurs that race could also show a correlation but is not used because of public policy.

TAPE 119, B

002

Rep. Gallegos

Refers to page ten, line five of the bill and inquires as to terminology. 

012

Ario

Responds with regard to the intent of the language.

018

Rep. Gallegos

Questions relevance.

021

Powell

Explains criteria requirements. 

037

Rep. Schaufler

Asks if rates are comparable in states cited.

045

Powell

Speaks on the use of rates in other states.

055

Miller

States that he can obtain information.

061

Ario

Explains criteria for determining rates.

075

Chair Close

Closes public hearing on SB 260A. Opens work session on SB 285.

Written testimony submitted by Lana Butterfield in opposition to SB 260A (EXHIBIT G).

Written testimony submitted by Rep. Jerry Krummel in favor of SB 260A (EXHIBIT H).

SB 285 – WORK SESSION

084

Megan Palau

Committee Administrator. Summarizes SB 285.

095

Lisa Trussell

Associated Oregon Industries. Testifies in support of SB 285.

104

Rep. Kitts

MOTION:  Moves to ADOPT SB 285-1 amendments dated 5/8/03, (EXHIBIT I).

106

 

VOTE:  5-0-2

EXCUSED:  2 - Garrard, Rosenbaum

 

Chair Close

Hearing no objection, declares the motion CARRIED.

 

 

 

108

Rep. Kitts

MOTION:  Moves SB 285 to the floor with a DO PASS AS AMENDED recommendation.

110

 

VOTE:  5-0-2

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  2 - Garrard, Rosenbaum

 

Chair Close

The motion CARRIES.

REP. SCHAUFLER will lead discussion on the floor.

112

Chair Close

Closes work session on SB 285. Opens work session on SB 749.

SB 749 – WORK SESSION

115

Megan Palau

Committee Administrator. Summarizes SB 749.

128

Rep. Kitts

MOTION:  Moves SB 749 to the floor with a DO PASS recommendation.

130

 

VOTE:  5-0-2

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  2 - Garrard, Rosenbaum

 

Chair Close

The motion CARRIES.

REP. MERKLEY will lead discussion on the floor.

135

Chair Close

Closes work session on SB 749. Opens work session on SB 341.

SB 341 – WORK SESSION

136

Chair Close

Notes the correction needed for the bill.

138

Megan Palau

Committee Administrator. Summarizes SB 341 and explains -3 amendment (EXHIBIT J).

155

Rep. Kitts

MOTION:  Moves to ADOPT SB 341-3 amendments dated 5/12/03.

158

 

VOTE:  5-0-2

EXCUSED:  2 - Garrard, Rosenbaum

 

Chair Close

Hearing no objection, declares the motion CARRIED.

 

 

 

161

Rep. Kitts

MOTION:  Moves SB 341 to the floor with a DO PASS AS AMENDED recommendation and be placed on the CONSENT CALENDAR.

164

 

VOTE:  5-0-2

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  2 - Garrard, Rosenbaum

 

Chair Close

The motion CARRIES.

170

Chair Close

Closes work session on SB 341. Adjourns meeting at 10:17 a.m.

 

EXHIBIT SUMMARY

 

A – SB 260, -A4 amendments, staff, 15 pp

B – SB 260, written testimony, Steve Dixon, 7 pp

C – SB 260, written testimony, Kelsey Wood, 1 p

D – SB 260, written testimony, Betty West, 5 pp

E – SB 260, prepared information, John Powell, 16 pp

F – SB 260, written testimony, Joel Ario, 2 pp

G – SB 260, written testimony, Lana Butterfield, 2 pp

H – SB 260, written testimony, Rep. Jerry Krummel, 1 p

I – SB 285, -1 amendments, staff, 1 p

J – SB 341, -3 amendments, staff, 2 pp