SENATE COMMITTEE ON JUDICIARY

 

 

February 17, 2003                                                                                               Hearing Room 343

8:00 A.M.                                                                                                                         Tape 29-31

 

MEMBERS PRESENT:         Sen. John Minnis, Chair

Sen. Ginny Burdick, Vice-Chair

Sen. Ted Ferrioli

Sen. Charlie Ringo

Sen. Charles Starr

Sen. Vicki Walker

 

STAFF PRESENT:                 Bill Joseph, Counsel

Jane Bodenweiser, Committee Assistant

 

 

MEASURE/ISSUES HEARD:           Introduction of LC ’s 411, 990, 1782, 1953,

                                                2190, 2400, 2505, 2726, 2727, 2760, 3015,

                                                3032, 3033, 2542, 1766-1

                                                SB 260 Public Hearing

                                                SB 280 Public Hearing

 

 

 

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 29, A

003

Chair Minnis

Calls the meeting to order at 8:10 a.m.

004

Bill Joseph

Committee Counsel.  Introduces LC 411, 990, 1782, 1953, 2190, 2400, 2505, 2726, 2727, 2760, 3015, 3032, 3033, 2542, and 1766-1 (EXHIBITS A – O)

080

Sen. Burdick

MOTION:  Moves LC's:  411, 990, 1782, 1953, 2190, 2400, 2505, 2726, 2727, 2760, 3015, 3032, 3033, 2542, 1766-1 BE INTRODUCED as committee bills.

 

 

VOTE:  4-0-2

EXCUSED:  2 - Sen. Ferrioli, Sen. Walker

083

Chair Minnis

Hearing no objection, declares the motion CARRIED.

089

Chair Minnis

Opens a public hearing on SB 260 and SB 280.

SB 260 & SB 280 PUBLIC HEARING

102

Shawn Miller

National Association of Independent Insurers (NAII). Introduces Sam Sorich and Lamont Boyd.

112

Sam Sorich

NAII.  Submits testimony and testifies in opposition to SB 260 that prohibits insurer from using credit history score of consumer applying for or renewing personal property or casualty insurance when making underwriting or rating decision (EXHIBIT P).  Discusses the legal basis for insurance companies to use credit information.

TAPE 30, A

003

Vice Chair Burdick

Asks about the model used for factoring.

020

Sorich

Explains that the models used by insurance companies differ.

058

Sen. Ferrioli

Refers to an email and asks how he could respond to it.

084

Lamont Boyd

Fair Issac & Company.  Discusses the model used by Fair Issac.

104

Sen. Ferrioli

Asks for more information.

105

Boyd

Says he will make the information available.

115

Sen. Ferrioli

Asks about the weight of the credit score.

134

Boyd

Explains how it is used by his company.

141

Chair Minnis

Asks how many models are used by the insurance industry.

144

Boyd

Says there are many.

154

Sen. Ferrioli

Asks further about the weight of the credit information.

161

Sorich

Explains that it varies with companies.  Says the use of credit information makes insurance rates more fare.

187

Sen. Walker

Discusses testimony given on Thursday.

213

Sorich

Explains what he recalls of the testimony.

233

Sen. Walker

Inquires about congressional action against Fair Issac & Co.

239

Boyd

Explains an action in California that never came to fruition.

279

Sen. Walker

Asks about the negative effects of credit inquiries.

282

Sorich

Says it is not true that a consumer’s inquiry on his personal credit record has a negative effect.

299

Sen. Ringo

Wonders why insurance agents feel using credit information is an unfair practice.

307

Sorich

Explains that the companies have done a poor job of explaining to agents why credit information is important.

335

Sen. Ringo

Asks about large agencies that support the use of credit information.

338

Sorich

Gives the name of an agency in Washington.  Asserts the use of the credit information is more fair.

417

Sen. Ringo

Asks what percentage of credit reports contain errors.

422

Boyd

Says between 2 and 4 percent contain errors.

414

Sen. Ringo

Questions the statistics.

434

Sen. Ferrioli

Asks what weighting of credit information is used specifically by his company.

TAPE 29, B

052

Eric Rosenberg

TransUnion Credit Co.  Submits testimony and testifies in opposition to SB 260 and 280 (EXHIBIT Q).

191

Chair Minnis

Asks about legislative access to data.

202

Rosenberg

Says that the model is filed with the State Department of Insurance, and held in confidence.


 

210

Chair Minnis

Contends the Department of Insurance is not overseeing the insurance models.

242

Sen. Ringo

Wonders why the model is not available to the consumer.

257

Rosenberg

Says better education is necessary.

299

Ronn Passmore

Rhodes-Warden Insurance.  Submits testimony and testifies in opposition of SB 260 and SB 280 (EXHIBIT R).

370

John Powell

State Farm Insurance.  Introduces Arthur Parks, underwriting administrator for State Farm.

388

Arthur Parks

State Farm Insurance.  Discusses their underwriting procedures.

TAPE 30, B

046

Sen. Walker

Asks if credit reports are used for renewals.

049

Parks

Says, not at State Farm.

068

Sen. Walker

Wonders what weight credit information is given to a new application.

069

Parks

Says approximately 20 percent.

088

Chair Minnis

Asks if credit information is used on property/casualty insurance.

090

Parks

Says not at this time.

100

Vice Chair Burdick

Asks about the issue between agents and the company.

111

Parks

Replies that he was not aware there was an issue.

125

Powell

Discusses the financial aspect of insurance company business.

147

Sen. Ringo

Wonders if the use of credit information is very profitable.

156

Parks

Says it is profitable because the loss ratio declines.

180

Powell

Discusses the complexity and importance of this issue.

197

Chair Minnis

Declares that there will be legislation coming from this committee on this issue.

229

Chet Peterson

Insurance Agent, Prineville, Oregon.  Testifies in support of SB 260 and SB 280.

403

Sen. Walker

Asks if insurance rate can go down because of a good credit rating.

417

Peterson

Says it can, but typically, because of inflation, rates go up.

TAPE 31, A

018

Sen. Ringo

Asks for his recommendation.

021

Peterson

Says the practice should be banned.

046

Vice Chair Burdick

Asks for clarification of an example given.

055

Peterson

Gives an explanation.

070

Chair Minnis

Closes the public hearing on SB 260 and 280 for the purpose of introducing committee measures.

073

Bill Joseph

Committee counsel.  Introduces LC’s 1373-1and 3034 (EXHIBITS S & T).


 

085

Vice chair Burdick

MOTION:  Moves LC's:  1373-1, 3034 BE INTRODUCED as committee bills.

 

 

VOTE:  5-0-1

EXCUSED:  1 - Sen. Ringo

090

Chair Minnis

Hearing no objection, declares the motion CARRIED.

091

Chair Minnis

Re-opens the public hearing on SB 260 and SB 280.

SB 260 & SB 280 PUBLIC HEARING

092

Delores Porch

Gresham, Oregon.  Testifies in support of SB 260.

197

Kelsey Wood

Gordon Wood Insurance Agency, Roseburg, Oregon.  Submits testimony and testifies in opposition to SB 260 and SB 280 (EXHIBIT U).

269

Chair Minnis

Convenes as a subcommittee for the purpose of hearing testimony due to the lack of a quorum.

279

Steve Dixon

Oregon State Public Interest Research Group.  Submits testimony and testifies in support of SB 260 (EXHIBIT V).  Says there are errors in credit reports.

420

Chair Minnis

Closes the public hearing on SB 260 and SB 280 and adjourns the meeting at 10:25 a.m.

 

 

EXHIBIT SUMMARY

 

A – LC 411, submitted by staff, 9 pp

B – LC 990, submitted by staff, 3 pp

C – LC 1782, submitted by staff, 3 pp

D – LC 1953, submitted by staff, 3 pp

E – LC 2190, submitted by staff, 2 pp

F – LC 2400, submitted by staff, 3 pp

G – LC 2505, submitted by staff, 10 pp

H – LC 2726, submitted by staff, 7 pp

I – LC 2727, submitted by staff, 2 pp

J – LC 2760, submitted by staff, 2 pp

K – LC 3015, submitted by staff, 2 pp

L – LC 3032, submitted by staff, 2 pp

M – LC 3033, submitted by staff, 3 pp

N – LC 2542, submitted by staff, 14 pp

O – LC 1766-1, submitted by staff, 1 p

P – SB 260 & 280, written testimony submitted by Sam Sorich, 17 pp

Q – SB 260 & 280, written testimony submitted by Eric Rosenberg, 2 pp

R – SB 260 & 280, written testimony submitted by Ronn Passmore, 1 p

S – LC 1373-1, submitted by staff, 2 pp

T – LC 3034, submitted by staff, 2 pp

U – SB 260 & 280, written testimony submitted by Kelsey Wood, 1 p

V – SB 260 & 280, written testimony submitted by Steve Dixon, 3 pp