MINUTES 
                                   JOINT HEARING 
                                           
                      SENATE COMMITTEE ON BUSINESS & COMMERCE 
                              Monday, October 25, 2004 
                                     10:00 a.m. 
                                       E1.030 
                                           
                                       ***** 
                                           
         Pursuant to a notice posted in accordance with Senate Rule  
         11.18, a public hearing of the Senate Committee on Business &  
         Commerce  was held jointly with the House Committee on Insurance  
         and the Property and Casualty Legislative Oversight Committee on  
         Monday, October 25, 2004, in  Room E1.030 at Austin, Texas. 
          
                                       ***** 
                                           
         MEMBERS PRESENT:                        MEMBERS ABSENT: 
         Senator Troy Fraser, Chairman           Senator Kenneth  
                                                 Armbrister 
         Senator Kip Averitt, Vice Chairman      Senator John Carona 
         Senator Kim Brimer                      Senator Eddie Lucio, Jr. 
         Senator Craig Estes 
         Senator Mike Jackson 
         Senator Leticia Van de Putte 
                                           
                                       ***** 
                                           
         A joint hearing of the Senate Committee on Business and  
         Commerce, House Committee on Insurance, and the Property and  
         Casualty Legislative Oversight Committee was held.  Chairman  
         Fraser and Chairman Smithee shared presiding duties.  At 10:13  
         a.m. Chairman Fraser called the Senate Committee on Business and  
         Commerce and the Property and Casualty Legislative Oversight  
         Committee to order.  Chairman Smithee called the House Committee  
         on Insurance to order.   The following business was transacted:   
          
         Chairman Fraser welcomed everyone to the hearing and asked if  
         any of the Committee members had any comments.  Senator Jackson  
         made opening remarks. 
          
         Upon completion of Senator Jackson's opening remarks, Chairman  
         Fraser called Jose Montemayor, Commissioner, Texas Department of  
         Insurance (TDI), to testify before the Committees.  Commissioner  
         Montemayor gave an update on rates, use of credit information,  
         filing of credit models, the legislatively mandated credit  
         study, and rating territories. 
          
         Following Commissioner Montemayor's testimony, Chairman Fraser  
         called Rod Bordelon, Public Insurance Counsel, to testify.  Mr.  
         Bordelon testified that SB 14 has been an unqualified  success. 
  
         Upon completion of Mr. Bordelon's  testimony, Chairman Fraser  
         opened public testimony and called Beaman Floyd of the Texas  
         Coalition for Affordable Insurance Solutions.  Mr. Floyd  
         testified and responded to members' questions. 
          
         Chairman Fraser then called Ware Wendell of Texas Watch and  
         Bonnie Shelley of AARP.  Mr. Wendell stated that the penalties  
         need to be implemented for companies that fail to comply with  
         TDI rate reductions ordered in August 2003 and that the  
         insurance marketplace needs more informed consumers.  Ms.  
         Shelley also testified and responded to members' questions.  
          
         Following Mr. Wendell's and Ms. Shelley's testimony, Chairman  
         Fraser called Hugh Higgins, who represented himself.  Mr.  
         Higgins testified and responded to members' questions. 
          
         Upon completion of Mr. Higgins' testimony, Chairman Fraser  
         called George Kelemen of AARP.  Mr. Kelemen testified and  
         responded to members' questions.    
          
         At the conclusion of  Mr. Kelemen's testimony, Chairman Fraser  
         closed public testimony. 
          
         There being no further business, at 12:58 p.m. Chairman Fraser  
         moved that the Senate Committee on Business and Commerce and the  
         Property and Casualty Legislative Oversight Committee stand  
         recessed subject to the call of the Chairman.  Without  
         objection, it was so ordered. 
          
         There being no further business, at 12:58 p.m. Chairman Smithee  
         moved that the House Committee on Insurance stand recessed  
         subject to the call of the Chairman.  Without objection, it was  
         so ordered. 
          
         _________________________ 
         Troy Fraser, Chairman 
          
         __________________________ 
         Tatum Baker, Clerk