SENATE COMMITTEE ON GENERAL GOVERNMENT

 

 

June 02, 2005                                                                                                         Hearing Room B

3:00 P.M.                                                                                                                      Tapes 72 - 73

 

MEMBERS PRESENT:         Sen. Frank Shields, Chair

Sen. Gary George, Vice-Chair

Sen. Bruce Starr

Sen. Joanne Verger

Sen. Vicki Walker

 

STAFF PRESENT:                 Judith Callens, Committee Administrator

Linda K. Gatto, Committee Assistant

 

MEASURES/ISSUES HEARD:        

                                                SB 310 – Work Session

                                                SB 984 – Work Session

                                                SB 1003 – 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 72, A

004

Chair Shields

Calls the meeting to order at 3:10 p.m. Opens the work session on     SB 310 with the -14 amendments (EXHIBIT A).

SB 310 – WORK SESSION

031

Sen. Verger

States a preference to await what the court of appeals says about this case in regard to sovereign immunity and public records.

042

Sen. Walker

MOTION:  Moves to ADOPT SB 312 -14 amendments dated 5/27/05.

051

Sen. Walker

Reviews the -14 amendments (EXHIBIT B).

082

Sen. Verger

Acknowledges the hard work and consensus on the -14 amendments.  Reiterates a preference to await the outcome of the court process.

095

Chair Shields

Inquires where in the amendments Judge Lipscomb’s definition of employer account records ends up in statute.

105

Sen. Walker

Responds on page ten, Section 10.

110

Chair Shields

Expresses concern about putting Judge Lipscomb’s definition in statute before the appeal is heard.

112

Sen. George

Comments that he is comfortable with this clarification.

123

Sen. Walker

States that this is defining sovereign immunity noting that although there is a case in process it is not uncommon for issues before the legislature while also in court.

145

Sen. Walker

Refers to ORS 656.526 regarding employer account records and the importance of being able to determine if there has been discrimination with regard to group plans.

162

Sen. B. Starr

Refers to page ten, Section 10 defining employer records going backwards and asks what is the definition going forward.

169

Sen. Walker

Answers it is on page four.

173

Sen. B. Starr

Confirms this language was proposed by SAIF.

178

Chair Shields

Reiterates that he is uncomfortable with Judge Lipscomb’s definition going into statute before the appeals process.

186

 

VOTE:  3-2-0

AYE:               3 - George, Starr B., Walker

NAY:               2 - Verger, Shields

 

Chair Shields

The motion CARRIES.

188

Sen. Walker

MOTION:  Moves SB 310 to the floor with a DO PASS AS AMENDED recommendation.

198

Sen. B. Starr

Comments that this is a compromise document.

211

Sen. George

Comments on Chair Shield’s efforts.

219

Sen. Walker

Concurs with Sen. George.

231

 

VOTE:  3-2-0

AYE:               3 - George, Starr B., Walker

NAY:               2 - Verger, Shields

 

Chair Shields

The motion CARRIES.

SEN. WALKER will lead discussion on the floor.

229

Chair Shields

Serves notice of a minority report. States that he prefers the -16 amendments (EXHIBIT B) which will be the basis of the minority report. Express concern that the -14 amendments will not get a hearing in the House.

257

Chair Shields

Closes the work session on SB 310 and opens the work session on     SB 984.

SB 984 – WORK SESSION

278

Chair Shields

Requests clarification of the -3 (EXHIBIT C) and -4 amendments and (EXHIBIT D).  

293

Charlie Cheek

Deputy Legislative Counsel. States that the -3 amendments are based on the -1 amendments (EXHIBIT E). States that the proposed revision to ORS 656.730 in the -4 amendments is a permanent provision; in statute; in the -3 amendments section is a temporary provision.

327

Chair Shields

Asks what are the implications are.

328

Cheek

Responds that in the -3 amendments, the authority for the director to get and use the information for the report due August 31, 2006 would be a single act, a session law that once accomplished the authority would not continue.

329

Sen. Verger

Asks what ability does the director of Department of Consumer and Business Services currently have to do this review.

370

Cory Streisinger

Director Department of Consumer and Business Services (DCBS). Responds the study is in their current authority. They have no objection to being directed by legislature and reporting back.

379

Chair Shields

Asks how the study would be approached.

380

Streisinger

Answers that the study language is the same in the -3 and -4 amendments.

384

Sen. Verger

Asks whether these reviews have been done before.

388

Streisinger

Responds that during the interim they took a first look at the assigned risk pool and realized that it needs a more thorough look. Adds that the work would be done with existing staff.

407

Sen. Verger

Asks why are companies placed in the assigned risk pool.

417

Streisinger

Responds in the preliminary look they found statutory discounts and advantages, and market factors that result in companies being in the assigned risk pool.

435

Cheek

Continues, noting a significant difference between the two amendments is who has to file a plan with the director that assists employers in the assigned risk pool in obtaining coverage in the voluntary market.

459

Chair Shields

Confirms that the -4 amendments require SAIF and the -3 amendments require both SAIF and Liberty.

463

Cheek

Answers affirmatively.

446

Chair Shields

Asks what are the practical implications.

466

Streisinger

Responds that both SAIF and Liberty, by contract, provide claims handling and coverage services to employers in the assigned risk pool. The effect would be that both would have the obligation to come up with ways to move these employers toward the voluntary market. The other amendments would require only SAI F to do that.

489

Chair Shields

Asks if this currently voluntary and not mandatory.

494

Streisinger

Answers affirmatively. The RFP cycle is in process now and it is hopeful that these servicing carriers will provide a proposal.

TAPE 73, A

037

Sen. Walker

Asks does SAIF pay federal taxes.

038

Streisinger

Responds she does not believe they pay federal income taxes.

040

Sen. Walker

Asks why.

042

Streisinger

Answers there is an exemption in the federal tax code.

046

Sen. Walker

Asks if it is because SAIF is servicing the public.

047

Streisinger

Responds that she has not reviewed the code recently.

056

Chair Shields

Comments that SAIF is the insurer of last resort. States that after the Mahonia Hall reforms, about 10,000 employers moved from SAIF to an assigned risk pool.

068

Streisinger

Responds that it is her understanding it was a business decision.

074

Sen. Walker

Believes that SAIF should have to justify why these employers are in the assigned risk pool and what efforts are being made to get them out.

085

Chair Shields

Refers to the low workers’ compensation rates in Oregon and asks will either of the amendments affect the workers’ compensation rate.

095

Streisinger

Responds that the most important part of the bill for her is to learn more about the assigned risk plan and the factors that drive it.

103

Chair Shields

Asks is there a reason for the legislature to define the work product of DCBS under the -3 amendments versus the -4 amendments.

111

Streisinger

Responds that her interest is in the study. Neither of the amendments were proposed by her.

116

Cheek

Reviews the significant differences between the amendments in Section 5. States that both versions require the director to adopt rules relative to rating systems; notes that the -4 amendments contain specific criteria, the -3 amendments do not. Adds that the second distinction is that the    -4 amendments make a legal requirement that workers’ compensation rates and supporting documents are not exempt from disclosure under public records and the -3 amendments leave the rulemaking authority to the director.

139

Sen. Verger

Asks for clarification.

144

Cheek

Answers that in the -3 amendments the director may adopt rules that provide the information is not subject to disclosure. The -4 amendments state they are not exempt from disclosure.

162

Sen. George

Asks if the purpose of this is to ensure that the information gathered would help an employer make an informed decision on how to insure and what the criteria is for rating them is.

180

Cheek

Responds that the -4 amendments specify what the rules must allow for.

189

Chair Shields

Notes the language in the - 4 amendments “shall adopt” and in the -3 amendments “may adopt”.

192

Cheek

Clarifies that in the -3 amendments, subsection 1 line 11 it says “shall adopt” but it does not have specificity.

196

Chair Shields

Asks what effect does this have.

212

Streisinger

States that there are two issues 1) how to do rates, and 2) the confidentiality of rate filings. Clarifies further.

238

Sen. Verger

Refers to the -4 amendments and asks if a company has information that they consider a trade secret and the DCBS makes it public, could DCBS be sued.

260

Streisinger

Responds no, the choice would be to not participate in the Oregon market. The -4 amendments would discourage new entrance in the market.

277

Jack Monroe

Representing the American Insurance Association. Provides that underwriters are writing niches in the Oregon market.  These writers would consider their expertise proprietary.

322

Brian Boe

Representing Liberty Northwest. States these discussions are in essence to ensure objectivity in the rate making and application process. The concern is that there has been excessive subjectivity. The market is a dualopoly heading towards a monopoly. Believes the -4 amendments will stimulate competition by ensuring equity in rates.

414

Chair Shields

Asks for a response to Mr. Monroe’s comments that insurers will stay away.

415

Boe

Answers that those companies are headquartered in other states and operating in Oregon.

439

Sen. George

Refers to Section 5 in the - 4 amendments and asks, if it is determined by rule that it is a trade secret is there no requirement to disclose it.

462

Cheek

Clarifies that in subsection 1, line 7 it states they are not exempt from disclosure.

TAPE 72, B

013

Sen. Verger

States she would rather be objective and support the study. Responds to Sen. George’s comment if there is a company that does fall under trade secrets they have a right to participate but not show “their hand” to their competitors.

031

Boe

Responds with favor for the - 4 amendments. Refers to concerns about the assigned risk portion of the bill and believes there is one carrier that should have special responsibilities. The purpose of the bill was to define SAIF’s public purpose.

060

Cheek

Points out a distinction that provides in the - 3 amendments that is not in the - 4 amendments that calls for a study which is a different report than in the – 3 amendments.

074

Streisinger

Responds that workers’ compensation rates are subject to pre approval. Understands that this is questioning if the tier pricing rates are being applied appropriately.

088

Sen. B. Starr

Asks if this is already being done.

092

Streisinger

Answers yes, but not every company every year.

107

Sen. Walker

MOTION:  Moves to ADOPT SB 984-4 amendments dated 5/25/05.

 

Chair Shields

Recesses the committee for 18 minutes.

117

Sen. B. Starr

Explains the agreement is to conceptually amend the - 4 amendments.

125

Sen. B. Starr

MOTION:  Moves to SUSPEND the rules for the purpose of Conceptually amending the -4 amendments.

 

 

VOTE:  5-0-0

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

130

Sen. B. Starr

MOTION:  Moves the measure be FURTHER AMENDED by deleting "Section 5 in the -4 amendments page 3 lines 7 - 26" and by inserting "Section 5 in the -3 amendments page 3 lines 11 - 19 into the -4 amendments".

 

 

VOTE:  5-0-0

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

150

Judith Callens

Committee Administrator. Notes that page 3, line 27 of the - 4 amendments has a section that applies to filings and the suggestion of the Insurance Commissioner is to remove Section 6 from the - 4 amendments.

164

Sen. B. Starr

MOTION:  Moves the measure be FURTHER AMENDED by deleting "page 3, lines 7 - 30 of the - 4 amendments” and insert "Section 5 lines 11 - 19, page 3 of the - 3 amendments ".

 

 

VOTE:  5-0-0

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

194

Sen. B. Starr

MOTION:  Moves to ADOPT SB 984-4 amendments as CONCEPTUALLY AMENDED dated 5/25/05.

 

 

VOTE:  5-0-0

AYE:               5 - George, Starr B., Verger, Walker, Shields

210

Sen. B. Starr

MOTION:  Moves SB 984 to the floor with a DO PASS AS AMENDED recommendation.

 

 

VOTE:  5-0-0

AYE:               5 - George, Starr B., Verger, Walker, Shields

 

Chair Shields

The motion CARRIES.

SEN. B. STARR will lead discussion on the floor.

221

Chair Shields

Closes the work session on SB 984 and opens the work session on      SB 1003.

SB 1003 – WORK SESSION

232

Judith Callens

Committee Administrator. States that the -3 amendments replace the original bill (EXHBIT F) and reviews the provisions of SB 1003 -3 amendments.

247

Sen. George

Asks what are the ramifications of legitimate injury claims that are denied in regard to those injuries not being taken care of and the associated costs.

274

Sen. Walker

States that the -3 amendments are her bill SB 754. Discusses concerns that arose from the Mahonia Hall reforms, the study on SAIF and Liberty claim denials, and cost shifting.

320

Sen. Walker

States it has been 15 years since the reforms and if workers’ compensation is to work fairly this is one way to review that it is working fairly.

346

Chair Shields

Agrees that a legitimate claim should be handled and not cost shifted. The workers compensation system has to balance the need of both the workers and the employers.

380

Sen. Walker

MOTION:  Moves to ADOPT SB 1003-3 amendments dated 3/30/05.

384

 

VOTE:  5-0-0

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

388

Sen. Walker

MOTION:  Moves SB 1003 to the floor with a DO PASS AS AMENDED recommendation and the SUBSEQUENT REFERRAL to the committee on Ways and Means BE RESCINDED and BE REFERRED to the Senate Special Committee on Budget.

400

 

VOTE:  5-0-0

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

406

Chair Shields

Adjourns the meeting at 4:50 p.m.

 

 

 

 

EXHIBIT SUMMARY

 

  1. SB 310, -14 amendments, Senator Vicki Walker, 11 pp
  2. SB 310, -16 amendments, staff, 9 pp
  3. SB 984, -3 amendments, staff, 4 pp
  4. SB 984, -4 amendments, staff, 4 pp
  5. SB 984, -1 amendments, staff, 4 pp
  6. SB 1003, -3 amendments, staff, 2 pp