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