05/07/2001 10:22 AM Senate JUD

                                                                                                                                
                 HB 184-INSURANCE CODE AMENDMENTS                                                                           
                                                                                                                              
CHAIRMAN  TAYLOR stated  there have  been previous  hearings on  the                                                            
bill  but  it  was held  until  the  Director  of  the  Division  of                                                            
Insurance made changes.  He moved the changes as Taylor amendment 1.                                                            
                                                                                                                                
MR. BOB  LOHR, Director  Division of Insurance,  explained  that the                                                            
amendments  direct the  Division of  Insurance  to adopt  commercial                                                            
deregulation regulations  by July 1, 2002. The division would set up                                                            
a file and  use system, which  means that  upon receipt of  a filing                                                            
from  certain  insurer  categories  for filings  that  meet  certain                                                            
standards,  the  division  would not  go  through a  review  process                                                            
before the filings took  effect. They would be informational filings                                                            
with the division.                                                                                                              
                                                                                                                                
This kind  of system is  used for accounts  that are represented  by                                                            
sophisticated  purchasers.   These are  entities  who  want  to  buy                                                            
commercial  insurance and have highly  qualified staff and  possibly                                                            
risk managers.  They do not need the Division of Insurance  consumer                                                            
protection the  way residential and auto purchasers  do because they                                                            
are well  able  to watch  out for their  own interests.  Because  of                                                            
their market  power,  they may be  able to  negotiate better  policy                                                            
prices  with  an  insurer.   Standards  of  neither  excessive   not                                                            
inadequate for rates and  language in the policy provision to be not                                                            
misleading  would continue to apply  for anyone below the  threshold                                                            
chosen in these regulation.                                                                                                     
                                                                                                                                
In reviewing  language,  it appears  that the  division already  has                                                            
authority to do  this by order but this would mandate  it be done by                                                            
regulation. The division supports this approach.                                                                                
                                                                                                                                
CHAIRMAN  TAYLOR asked  whether there  was additional  testimony  or                                                            
objection  to  the  amendment.  There  was  none.  Amendment  1  was                                                            
adopted.                                                                                                                        
                                                                                                                                
SENATOR COWDERY  moved SCS  HB 184(JUD).  There being no  objection,                                                            
the bill moved from committee as amended.