Colo. Wants to Form Consumer Insurance Board

The Colorado House has introduced a bill that would create a Consumer Insurance Board to provide policy guidance to the Commissioner of Insurance, gather and prepare information for hearings regarding proposed insurance legislation and regulations, annually review the performance of the Insurance Commissioner, advise the Commissioner about insurance rate change requests, and contract with employees outside of the Division of Insurance to assist the board in carrying out its duties.

Proponents of the legislation have argued that Colorado needs an independent Consumer Insurance Board to assist the Commissioner in promoting the needs and interests of consumers and business entities in the state.

According to the National Association of Mutual Insurance Companies (NAMIC), such a board would be “a redundant and inappropriate use of state revenue.”

“Colorado insurance consumers and taxpayers should not be forced to pay for the creation of a Consumer Insurance Board that is not needed” stated NAMIC West Region State Affairs Manager Christian John Rataj. The tasks proposed are already being preformed by the DOI and other state regulatory agencies. “The current fiscal impact of CO HB 1043 is estimated in excess of $250,000 in 2006 and well above $800,000 in 2007,” he said.

NAMIC will join other members of the insurance industry in drafting and submitting a fact sheet for the members of the House Business Affairs and Labor Committee to oppose the bill.

NAMIC is also concerned that the structure and composition of the Consumer Insurance Board will actually harm the insurance consumer.

“The bill allots only one of the 11 seats on the board to a member of the insurance community; however, it authorizes two members of the healthcare industry to be members of the board. This disproportionate allocation of membership is unreasonable and likely to lead to protracted legislative conflict that is not in the best interest of the end user,” Rataj said.

“The bill also specifically authorizes the Consumer Insurance Board to annually review the performance of the Insurance Commissioner. Allowing the board to review the Commissioner’s performance would afford the board an opportunity to exert undue influence over the policy decisions of the Division of Insurance,” said Rataj.

Versions of HB 1043 have been offered in previous years, under a host of different titles; all have been repeatedly rejected by the state legislature.

The proposed bill can be read at http://www.namic.org/pdf/060208ColoHB1043.pdf. A fiscal impact note prepared by the Legislative Council Staff can be read at http://www.namic.org/pdf/060208ColoHB1043FiscalImpact.pdf.