MINUTES SENATE COMMITTEE ON BUSINESS & COMMERCE Wednesday, September 4, 2002 9:00 a.m. Capitol Extension, Room E1.036 ***** Pursuant to a notice posted in accordance with Senate Rule 11.18, a public hearing of the Senate Committee on Business & Commerce was held on Wednesday, September 4, 2002, in the Capitol Extension, Room E1.036, at Austin, Texas. ***** MEMBERS PRESENT: MEMBERS ABSENT: Senator Troy Fraser, Acting Chairman None Senator John Carona Senator Mike Jackson Senator Eddie Lucio, Jr. Senator Frank Madla Senator Eliot Shapleigh Senator Leticia Van de Putte ***** Chairman Fraser called the meeting to order at 9:10 a.m. There being a quorum present, the following business was transacted. Senators Kip Averitt and Rodney Ellis were also present and participated in the hearing. The Chairman welcomed everyone, and explained the procedure planned for the meeting. The committee would begin with the issue of credit scoring which would take most of the morning. Then after a brief lunch break, the committee would hear invited testimony on mold, mold-related claims, and how it has affected the homeowners insurance market. Chairman Fraser then called Credit Scoring Panel 1 from the Texas Department of Insurance to present background on the issue. The panelists were: Brian Ryder, Property and Casualty, Audrey Selden, Consumer Protection, David Durden, Director, Government Relations, and Catherine Reyer, Legal & Compliance, Enforcement. Following testimony by Panel 1 and their response to members' questions, the Chairman called Credit Scoring Panel 2 to present testimony from the consumers' perspective. Panelists were: Juan Chapa, Corpus Christi, and Kathryn Perry, Wimberly. The third panel, Consumer Advocates, were called to testify as follows: Birny Birnbaum, Austin, member of Florida Task Force on Credit Scoring, D. J. Powers, Center for Economic Justice, Rod Bordelon, Office of Public Insurance Counsel, and Rob Schneider, Consumers Union. Panel 4, presenting the Industry Perspective on Credit Scoring, were: Eddy Lo, representing Fair, Issac, Jeffrey Skelton, representing Choice Point, Denise Ruggiero, representing State Farm, Dean Lamb, representing Allstate, Lee Ann Alexander, representing Liberty Mutual, and William Graves, representing Progressive County Mutual. At 1:40 p.m., Chairman Fraser moved that the committee stand recessed for a brief lunch break; without objection, it was so ordered. At 2:10 p.m., the committee reconvened. The Chairman advised that invited testimony would commence on the mold issue, and called Jose Montemayor, Commissioner, Texas Department of Insurance, to present testimony on Mold Claims and Impact on Homeowners Rates. Following Commissioner Montemayor's testimony and response to members' questions, Chairman Fraser called Panel 2 to testify on Mold Claims Handling Processes. The panelists were: Susan Dayberry, homeowner, Royse City, Tom Archer, homeowner, Austin, and Audrey Selden, Texas Department of Insurance. The Chairman then called Panel 3 to testify on Mold Litigation; panelists were as follows: Todd Hunter, attorney, Corpus Christi, and Bruce Mery, attorney, San Antonio. Panel 4 was then called to present testimony on the Role of Remediators and Need for Standards. Panelists were: Kyle Dotson, Certified Industrial Hygienist, Houston, Bob Allen, International Association of Mold Remediation Specialists, Fort Worth, and Claren Kotrla, Texas Department of Health. Panel 5 presented testimony on the Role of Public Adjusters and Need for Licensing. Witnesses were as follows: SENATE COMMITTEE ON BUSINESS & COMMERCE Minutes Wednesday, September 4, 2002 page 3 Jerry Edler, independent adjuster, San Antonio, Jim Beneke, public adjuster, Austin, and James Rader, Supreme Court Unauthorized Practice of Law Committee, Austin. Chairman Fraser then called Panel 6 to present testimony on Mold Standards. The panelists were: Dr. Robert Emery, University of Texas at Houston Health Science Center, Keller Thormahlen, Texas Department of Health, and Mike Miller, U. S. Environmental Protection Agency, Dallas. The final panel was called to testify on the effect of mold on home sales. Panelists were: Bill Stinson, Texas Association of Realtors, Austin, Joe Farr, Texas Mortgage Bankers Association, Austin, and Mickie Comiskey, Focus Insurance and Financial Services, Houston. There being no further business, at 5:12 p.m. Chairman Fraser moved that the Committee stand recessed subject to the call of the chairman. Without objection, it was so ordered. ______________________________ Senator Troy Fraser, Chairman ______________________________ Barbara Henderson, Clerk