The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:30 a.m., on Tuesday, February 16, 1999, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau. This meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4412, 555 East Washington Street, Las Vegas, Nevada.

COMMITTEE MEMBERS PRESENT:

Senator Randolph J. Townsend, Chairman

Senator Ann O’Connell, Vice Chairman

Senator Mark Amodei

Senator Dean A. Rhoads

Senator Raymond C. Shaffer

Senator Michael A. (Mike) Schneider

Senator Maggie Carlton

STAFF MEMBERS PRESENT:

Scott Young, Committee Policy Analyst

John L. Meder, Committee Policy Analyst

Crystal Lesbo, Committee Policy Analyst

Sue S. Matuska, Committee Counsel

Beverly Willis, Committee Secretary

OTHERS PRESENT:

Senator Townsend opened today’s meeting by presenting Bill Draft Request (BDR) 54-402.

* * * * *

Senator Townsend opened the hearing on Senate Bill (S.B.) 38.

Scott Craigie, Lobbyist, Vice President, R&R Advertising, Alliance of American Insurers, and Liberty Mutual Insurance Group, spoke in favor of this legislation, asserting it would be advantageous to small employers in order for them to take advantage of cost savings of grouping employers together. Mr. Craigie claimed this legislation was submitted to an interim committee with unanimous support.

Lenard Ormsby, General Counsel, Employers Insurance Company of Nevada (EICON), maintained certain changes should be made to accommodate EICON to put EICON on an equal basis with other competitive insurance companies. Mr. Ormsby sought clarification on matters pertaining to liability on costs of administration of claims. Sue S. Matuska, Committee Counsel, Legal Division, Legislative Counsel Bureau, offered an explanation, noting the concept of fully insured, as explained by Mr. Craigie. Ms. Matuska stated, "We want to make sure it is the insurer that is fully responsible for providing the competition, not the individual members, or the organization."

Senator Townsend, noting if Mr. Ormsby was General Counsel for EICON with a vast amount of knowledge on this subject was confused, wondered if others might be as well, requested Ms. Matuska for a method of clarification on the private carrier issue.

Mr. Ormsby expressed other concerns dealing with automatic closure, noting this feature could add administrative costs. He suggested this aspect might possibly be eliminated in order to provide administrative savings.

Senator O’Connell noted a possible problem for those who have a minor injury that turns into a more serious matter. She continued the lack of eligibility, because of time constraints, or lack of notification, could render some ineligible for coverage. Senator O’Connell stated, "We think it is imperative that anybody who is injured know if their claim is not reopened, or has been activated, have some warning they are not going to be covered. . . . There has to be some recognition that not everybody gets that word."

There was further discussion between Senator O’Connell and Mr. Ormsby on ways to remedy this problem.

Donna Sweager, Supervising Attorney, Nevada Association for Injured Workers, concurred with Mr. Ormsby, maintaining her office would like to see reference to automatic closure eliminated completely. She noted discrepancies in the language pertaining to settlement of claims. Charles R. Nort, Lobbyist, President, Nevada Alternative Solutions, Inc., and Union Plaza, and EGBH d.b.a. Las Vegas Club, pointed out several inconsistencies in language. Mr. Nort concurred with concerns expressed by Senator O’Connell.

Senator Townsend closed the hearing on S.B. 38. The hearing was opened on

Samuel P. McMullen, Lobbyist, Retail Association of Nevada, and Nevada Self-Insurers Association, introduced Mary F. Lau, Lobbyist, Executive Director, Retail Association of Nevada. Mr. McMullen cited several reasons for this legislation; flexibility and competition with respect to the level of audited financial reports and information related to financial solvency of the individual applicant. He noted the self-insured group would define the level of documentation needed. Mr. McMullen outlined other requirements listed for small groups to be self-insured. Ms. Lau spoke informing the committee this legislation does not change any of the qualifications for starting a group, however, does allow the commissioner (of insurance) after the first 12 months to change requirements, if so desired. She noted all groups coming into Nevada, or forming within Nevada still have the same requirements.

Eloise Koenig, Self-Insurance Coordinator, Self-Insured Workers’ Compensation Section, Division of Insurance, Department of Business and Industry, asserted she was not taking a stand on the main portion of this legislation. She noted new language had been proposed so associations must notify the commissioner (of insurance) within 30 days of the effective date of the addition of a new member along with proper information that might be required by the commissioner.

David L. Howard, Lobbyist, Public Policy Director, Greater Reno-Sparks Chamber of Commerce, maintained his members were looking forward to three-way insurance. He asserted flexibility would be very desirable.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association, noted his group had been certified in 1995. He maintained the worth of self-insured groups had been demonstrated. Mr. Capurro noted he endorsed comments made by Mr. McMullen and Ms. Lau, as well as endorsing proposed changes made by Ms. Koenig.

James L. Wadhams, Lobbyist, Nevada Independent Insurance Agents, asserted

solvency standards should be applied to other insurers of workers’ compensation benefits. He maintained all other standards would need to be evaluated. Mr. Wadhams noted he hoped an amendment to allow all insurers to participate at the same level would be considered.

Senator Townsend closed the hearing on S.B. 44 and opened the hearing on S.B. 53.

Mr. McMullen spoke once again, this time representing the Nevada Self-Insurers Association. He asserted this legislation would relate to claims information along with other matters concerning administration and enforcement of industrial insurance. Mr. McMullen, clarifying further, noted for three-way insurance this legislation would help standardize the format for reporting information.

Chairman Townsend requested information as to the purpose of this legislation, with Roger Bremner, Administrator, Secretary, Advisory Council, Division of Industrial Relations (DIR), Department of Business and Industry, offering an explanation. Mr. Bremner maintained a claims indexing system could be offered on a small scale, asserting this was the purpose of this legislation. Mr. Bremner stated it was his intention to present an amendment to Mr. McMullen, with the hope an agreement could be reached.

Senator Townsend closed the hearing on S.B. 53. The hearing on S.B. 94 was opened.

Don Jayne, Lobbyist, CDS of Nevada Inc, noted the primary purpose of this legislation would be to create a formula for the distribution of proceeds from a third-party settlement. Mr. Jayne maintained insurers were entitled to recover monies paid on workers’ compensation claims, up to and including the amount of a lien for medical payments. He referred to the Breen Formula (Exhibit C), claiming it is an inequitable distribution. Mr. Jayne offered a review of the Breen Formula, explaining the attorney’s fees and damages are paid first. After payment of damages recovered and the proceeds received, the injured worker receives one-third of the net amount. After one-third of the net amount is paid to the injured worker, the insurer recovers the amount of their lien. Following that, one-third is paid, regardless of the amount, with any remainder allocated to the injured worker. Mr. Jayne asserted he hoped to reduce the formula that provides for the payment to the insurer of the amounts they have paid up, to their lien, after the attorney fees are paid, the expenses are paid, and after the injured worker receives one-third; only up to the amount of the lien.

Leslie Bell, Executive Director, CDS of Nevada Inc., claimed this matter has been addressed in the past; however, clarification was lacking. Ms. Bell asserted the proposed legislation would remedy this lack as well as resulting in a significant reduction of litigation in this issue.

Patricia R. Walquist, President, Nevada Self-Insurer’s Association, declared her support for this legislation.

Robert Balkenbush, Attorney, Public Agency Compensation Trust, noted his support for this proposed legislation, in its present form.

Mr. Ormsby claimed although this legislation offered clarification, he had problems with some wording. He asserted, "I want the insurer as well as the other two parties in the equation to have the ability to negotiate." Mr. Ormsby maintained this would be needed in order to deal with cases with great risk, or costs might need to be shared, etc.

Andrew J. Thomas, Lobbyist, Nevada Trial Lawyers’ Association, speaking from Las Vegas, noted he had some problems with this legislation. Mr. Thomas maintained some injured workers might experience difficulty with pursuing a third-party settlement.

Danny L. Thompson, Lobbyist, Political Director, Nevada State American Federation of Labor-Congress of Industrial Organizations (AFL/CIO), stated his opposition to this legislation. He claimed the Breen Formula apportions the costs among all parties, putting the cost on the injured worker. Mr. Thompson cited an example of this theory. He maintained the claimant always gets the least (settlement). Mr. Thompson asserted he feels this is another benefit reduction.

Bill Bradley, Lobbyist, Nevada Trial Lawyers’ Association, asserted regardless of what sort of formula is used to settle a claim, generally it is the injured person who loses. He maintained the injured worker and his/her lawyer take all the risk. Mr. Bradley encouraged the committee members to read the Breen Formula, asserting it would give an example of how the Nevada Supreme Court looks to the committee, in order to determine their (the Legislature’s) intent.

Cal Dunlap, Nevada Trial Lawyers’ Association, concurred with Mr. Bradley. Mr. Dunlap cited several cases where a third-party suit was successful. Voicing a criticism of current law, Mr. Dunlap inquired why should he or his client, pay up front and take all the risk, should the case fail. Once again, he expressed concerns over this legislation.

Senator Townsend summarized; asserting the goal of these discussions was to make sure with these third-party issues the claimant is the primary concern. He noted although the insurer would like to reclaim as much as possible, the concern of the committee is how to make sure the claimant is helped and receives any additional benefit that might occur. He concluded there would need to be a common ground in order to enhance the Breen Formula and speak to all concerns.

Once again, Ms. Bell spoke, encouraging the committee to peruse this legislation once more, as it was her contention all concerns had been resolved.

Ronald R. (Ron) Dreher, Lobbyist, President, Reno Police Protective Association and Peace Officers Research Association of Nevada, offered a few comments on this legislation. Mr. Dreher complimented Mr. Dunlap on his work, and concurred with Mr. Dunlap’s remarks. He also noted his opposition to S.B. 94.

Senator Townsend closed the hearing on S.B. 94 and opened the hearing on S.B. 95.

Mr. Craigie spoke on behalf of Liberty Mutual Insurance Group, and the Alliance of American Insurers, giving a brief explanation of this legislation, referring to an endorsement needed for benefit checks. Mr. Craigie noting, over a period of time with numerous changes and additions, this legislation had become unwieldy. Mr. Craigie offered a proposed amendment (Exhibit D) that simplifies and shortens the language for this endorsement. He presented other changes he felt pertained to this legislation.

Gerald Yeung, Actuary, National Council on Compensation Insurance, Inc., noted he was testifying on behalf of the commissioner of insurance and the Division of Insurance in his role as the designated advisory organization for Nevada. He asserted his testimony was neither for nor against S.B. 95. Mr. Yeung maintained he was simply commenting on the potential financial impacts of the proposals. He presented his written comments (Exhibit E), and proceeded to read his comments into the record.

Amy Halley Hill, Lobbyist, Nevada Self-Insurers Association, noted in general this legislation had merit, however, there were some areas of concern. She commented on language (Exhibit F), asserting this did set forth legislative intent. Ms. Hall mentioned legal action in Clark County, reiterating her belief the language in Exhibit F as being legislative intent. Answering questions concerning the legal action, Mr. McMullen claimed this was the Nevada Self-Insured Association versus the Division of Industrial Relations. He noted it was for a declaratory judgement on the legality of the regulation, given the statutory language provided in Exhibit F.

Mr. Craigie assured Senator Townsend the fraud unit of the attorney general’s office had approved the language presented in Exhibit D.

Robert A. Ostrovsky, Lobbyist, Nevada Resort Association, and American Toxicology Institute, speaking for the Nevada Resort Association, noted his support for S.B. 95 as it is to be amended. Mr. Ostrovsky speaking for the American Toxicology Institute, presented an amendment for S.B. 95 (Exhibit G). Mr. Ostrovsky presented a detailed explanation of Exhibit G, specifically touching on issues relating to drug testing and certification standards in the State of Nevada. He presented a letter from the Bureau of Licensure and Certification, Health Division, Department of Human Resources (Exhibit H). Mr. Ostrovsky introduced Dan R. Berkable, Lobbyist, President, American Toxicology Institute, who stated the certification process in Nevada is thorough and comprehensive. Mr. Berkable asserted all phases of drug testing should be under the auspices of the health department. He claimed information contained in Exhibit H was of prime importance.

Fred L. Hillerby, Lobbyist, Associated Pathologists Laboratory, stated work to set standards for drug testing had been initiated at the Sixty-Ninth Legislative Session. He explained further work was needed.

Barbara Gruenewald, Attorney, Nevada Trial Lawyers Association, noted her organization had objections to S.B. 95, specifically regarding the endorsement provision. She maintained this area could make a claimant feel like a criminal when signing a check, just because they have been injured on the job. Ms. Gruenewald gave examples of her contention. She asked the committee to delete subsection 3 of section 1. Ms. Gruenewald continued noting her objections to page 3, line 25 and line 26. She pointed out her objection to language as noted in Exhibit F.

John E. Jeffrey, Lobbyist, Secretary/Treasurer, Southern Nevada Central Labor Council, stated his opposition to those sections of the legislation, as noted by Ms. Gruenewald.

Mr. Thompson testified, noting his objections to portions of S.B. 95, in particular those dealing with check endorsement and disposition of bodies. He continued with examples of his concern. Mr. Thompson requested the portion of this legislation dealing with the disposition of bodies be separated and prepared as separate legislation.

Senator O’Connell stated:

Senator Townsend assured Mr. Thompson of his concurrence with the statement made by Senator O’Connell.

John F. Wiles, Division Counsel, Division of Industrial Relations (DIR), Department of Business and Industry, provided a district court decision on objective findings (Exhibit I). Mr. Wiles offered clarification, noting the DIR was providing a mechanism for permanent partial disabilities (PPD) to be evaluated by a competent physician, with the emphasis on physical disabilities. He maintained this would provide the opportunity for competent persons to make the evaluation if there were a PPD. Mr. Wiles asserted he was not speaking either for or against, he was simply offering clarification.

Nancyann Leeder, Nevada Attorney for Injured Workers, Department of Business and Industry, claimed her organization concurred with remarks made by Ms. Gruenewald, Mr. Thompson and Mr. Jeffrey. Ms. Leeder noted, "In addition, I would like to state on page 4, the sections to add another requirement to PPD evaluations; I think should not be passed, but should be deleted from the bill." She went on to note pain is a recognized medical symptom, citing several situations. After an exchange of ideas with Senator Townsend, Ms. Leeder claimed her other comments had already been stated.

At this time the hearing was closed on S.B. 95. The hearing was opened on S.B. 132.

Chairman Townsend called for testimony on S.B. 132, referring specifically to section 1.

Ed Flagg, President, Lobbyist, Nevada Corrections Association, presented his written testimony (Exhibit J) and proceeded to read his testimony into the record. A specific concern, according to Mr. Flagg, is the problem that arises when correctional peace officers, who are responding to fights between inmates and responding to altercations between inmates and staff, have claims involving the possible contraction of communicable disease, discounted because they are "not providers of medical services."

Walter R. Tarantino, Lobbyist, Legal Counsel, Nevada Corrections Association, gave background on how S.B. 132 evolved. Mr. Tarantino noted, in the beginning, this legislation was developed in order to address a need to have correctional peace officers covered in the event they contracted a communicable disease in the course of their employment. He claimed, however, this bill request seems to have been combined with controversial issues. Mr. Tarantino asserted these issues might erode benefits currently enjoyed by police officers and firefighters into their retirement. He explained:

Mr. Tarantino maintained his organization was not in favor of the proposed revisions.

At this time, Chairman Townsend requested testimony on other sections of this legislation be brought forth. Senator Townsend explained he would like to first deal with issues of individuals who were not being covered, and who were coming into contact with either injury or occupational disease as a result of their employment; then address controversial issues.

Mr. Tarantino agreed and complimented the committee and those who draft these bills on their course of action with this legislation.

Senator Townsend wanted to be sure all interested parties had the opportunity for legal counsel to review these issues. He continued:

Mr. Flagg affirmed he had contacted all interested parties. Mr. Flagg claimed, "We will go back to section 1, and they agree with that."

Raymond McAllister, Lobbyist, Southern District Vice President, Professional Firefighters of Nevada, stated, "We would rise in opposition, today, to the current language you have proposed in this bill." Mr. McAllister presented his written testimony, Exhibit K, and proceeded to read it into the record. He cited a number of examples enforcing his opposition. Mr. McAllister requested language be added to include police officers and firefighters. He claimed he was aware of other legislation, as yet to be introduced, that would be more comprehensive; not only addressing correctional officers, but also police officers and firefighters. Mr. McAllister noted it had been proposed by the police officers.

At this time, Mr. Dreher noted this new legislation had been presented as Bill Draft Request (BDR) 15-1399.

Senator Townsend and Mr. Dreher discussed items that might be covered in this impending legislation. Mr. Dreher indicated this legislation would cover points not covered by workers’ compensation. Mr. Tarantino asserted neither he nor his group was aware of this impending legislation; however, would be happy to work with the proponents. Further discussion arose, pertaining to what exactly this legislation might cover and when processing could be expected, between Senator Townsend, Mr. Dreher and Crystal Lesbo, Committee Policy Analyst, Research Division, Legislative Counsel Bureau. Mr. McAllister presented concerns pertaining to certain diseases that might take a long period of time to develop. It was ascertained the impending legislation might cover these situations.

Jim Reinhardt, Fire Chief, East Fork Fire and Paramedic Districts, noted his concern was volunteer firefighters. He noted his wish to make sure communicable disease would be addressed. Mr. Reinhardt claimed there was a division between volunteers and paid professionals.

Wayne Carlson, Lobbyist, Public Agency Compensation Trust, presented his written testimony (Exhibit L). He pointed out S.B. 132 had been generated by the interim Legislative Committee on Workers’ Compensation. Mr. Carlson claimed his organization had a close relationship with police officers/firefighters and would not take away any efforts put forth by these groups. In his remarks, he referred specifically to the Gallagher Decision, as noted in Exhibit L. Mr. Carlson continued, reading his testimony into the record. As part of his testimony, Mr. Carlson provided a review of provisions of S.B. 132. Mr. Carlson and Senator Townsend reviewed entities associated with Mr. Carlson’s organization; i.e., cities, rural counties, school districts.

Mary C. Walker, Lobbyist, Carson City, Douglas County, and Lyon County, noted her support of S.B. 132. She maintained it was a reasonable attempt to relate work-related causes of heart and lung disease with the liability of the public entity.

Thomas J. Grady, Lobbyist, Nevada League of Cities and Municipalities, informed the committee of his support for S.B. 132. He maintained Mr. Carlson had expressed his concerns relating to this legislation. Senator O’Connell requested information on any fiscal impact the Gallagher Decision might have had on any counties or cities. Mr. Grady asserted a request had been made of these entities; however, as yet, no information was available.

Senator Townsend pointed out the notation of a fiscal note on S.B. 132, presumably affecting section 1. He requested further information from Ms. Lesbo.

Kevin S. Chadwick, Safety Officer, Washoe County, noted his agreement with this proposed language. He asserted it created equity between all parties involved.

Mr. Carlson, referring to a fiscal impact, noted if there was a 10-percent incident rate of the more than 700 paid police officers who would file for disability benefits, under the retirement provision, the fiscal impact, over a 20-year cycle would be $25 million. Further discussion took place between Mr. Carlson, Mr. Grady and Senator Townsend pertaining to long-term implications.

Senator O’Connell requested information from Mr. Carlson relevant to any counties that might be facing bankruptcy, with Mr. Carlson asserting he did not know of any. Senator O’Connell and Ms. Walker disagreed, with Ms. Walker claiming during the last four years, there were six counties with a decline in assessed valuation. Primarily, this was caused because of mining and centrally assessed valuation. Ms. Walker stated it was her understanding, there might be several more counties with a decline in assessed valuation, during the next year.

Susan Dunt, Safety and Workers’ Compensation Manager, Risk Management Division, Department of Administration, offered information on the potential fiscal impact on Nevada. She asserted medical claims brought by retired employees could eventually affect rates, in particular, in police and firefighter category. Ms. Dunt, noted information from the American Heart Association, projected one out of four adults, eventually, will die of heart disease. She asserted it would be impossible to project the fiscal impact, without limits on the time frame, from when employees have had their years of service, versus how long they are covered under retirement. Senator Townsend complimented Ms. Dunt on her efforts to bring about the importance of safety on the job.

Once again, Mr. Howard, addressing S.B. 132, claimed, "It is tough for everybody to talk about taking benefits away from people we rely on so heavily, but that is just exactly what this bill is." Mr. Howard indicated decisions on this legislation would be very difficult. He claimed S.B. 132, the way it is written, addressed one specific thing, "Does that person injured get both retirement and disability; they do today. This bill is saying ‘let’s stop doing that, because we cannot afford it.’ That is the question before this committee."

Mr. McAllister, referring to Exhibit K, reiterated his opposition to S.B. 132. Reading from his testimony (Exhibit K), Mr. McAllister expressed his objections and gave several examples of his concerns. Mr. McAllister referred to a Nevada Supreme Court decision pertaining to James Gallagher and William Sorenson (Exhibit M). He pointed out differences between retirement benefits and disability. It was Mr. McAllister’s contention, ". . . the intent of heart and lung coverage for firefighters and police officers, was not to have them put their lives on the line, daily, and then if they become disabled, make them and their families live a lower quality of life, by taking away their financial status." He maintained firefighters and police officers go to work every day in a dangerous environment and do not pick and choose which calls to answer; they answer all of them. Mr. McAllister reiterated his opposition to S.B. 132.

Mr. Dreher concurred with and reinforced remarks presented by Mr. McAllister. He noted the dangerous type of work experienced by firefighters and police officers does impact the heart and lungs. Mr. Dreher emphasized his opposition to S.B. 132.

Senator Amodei requested information from Mr. McAllister and Mr. Dreher pertaining to Scenario III, in Exhibit L. Both gentlemen maintained there were no examples in either Washoe County or Clark County. Senator Amodei asked for documentation covering all aspects of the financial burden for Nevada, with a breakdown on those who are retired and those who did not serve until retirement before obtaining their benefits.

Len Nevin, Former Senator, Retired Police Officer, speaking from Las Vegas, maintained this legislation could rip away many years of hard work. He claimed he did not know of anyone who had worked for 5 years in any department, then tried to put in a claim for an injury that took place 15 or 20 years previously.

Gary H. Wolff, Lobbyist, Nevada Highway Patrol Association, stated, "I want to echo what my colleagues have said." He gave several examples of his reasoning. Mr. Wolff expressed his opposition to SB 132.

Kelli Boyd, Second Vice President, Nevada State Firefighters Association, noted she represented 2,500 volunteer firefighters in Nevada and maintained her opposition to S.B. 132. Ms. Boyd claimed this legislation would take away the small amount of coverage provided for volunteer firefighters. She reiterated her opposition to this legislation.

Ed Beeman, Clark County Employee, speaking from Las Vegas, voiced his opposition to S.B. 132. It was his contention the financial impact would not be any different than at the present time.

Senator Townsend noted, as had been discussed, the two sections of this bill would be dealt with separately.

Mr. Balkenbush responded generally to concerns of those who spoke against this legislation. He maintained it was his understanding there was a conclusive presumption of coverage and lifetime coverage. Mr. Balkenbush asserted his organization had proposed to eliminate the conclusive presumption. He indicated the interim committee chose to propose a cap on the lifetime coverage and asserted the opposition does not want the lifetime coverage eliminated as well as keeping the conclusive presumption. Mr. Balkenbush claimed there were those who were covered when there was no proof of an occupational related disease. He requested an opportunity to prove the diseases to be covered are not work related.

Brenda Harrison, Concerned Citizen, registered her opposition to this legislation. She commented on the retirement age and the possible effects of a lower income for retirees.

Senator Townsend reiterated his plan to separate the issues on S.B. 132. The hearing was closed on S.B. 132 and a hearing was opened on S.B. 133.

L. Tom Czehowski, Director, Safety Personnel, Steel Engineers, Inc., indicated this legislation would be necessary, since consolidated insurance programs would be transpiring in the near future. Mr. Czehowski maintained consolidated insurance programs were needed because of uniformity in safety and treatment of injuries and claims administration. He presented his justification (Exhibit N).

Referring to Exhibit N, Mr. Czehowski and Mr. Ormsby discussed various aspects concerning the transition period of consolidated insurance. Alice A. Molasky-Arman, Commissioner, Insurance Division, Department of Business and Industry, joined the discussion, focusing in particular on Owner Controlled Insurance Programs (OCIPs) and Contractor Controlled Insurance Programs (CCIPs). Senator Townsend addressed Mr. Ormsby’s concerns by inquiring if Mr. Ormsby was uncomfortable with the fact that a regulatory agency might want to micromanage a contract that does not need to be managed. Mr. Ormsby replied, "Certainly areas that should not be of a concern to the commissioner, that is correct." Mr. Czehowski maintained the intent was, "To assure a contract which included the provisions, as spelled out in S.B. 133 as far as qualifications of individuals, who is responsible, definition of sight, etc., would b e in a contract; would be submitted to the Department [Division] of Insurance." Mr. Craigie asserted he understood concerns voiced by Mr. Ormsby; however, during this transition period, felt it was wise for the insurance commissioner to be fully informed. Mr. Ormsby, Ms. Molasky-Arman, Mr. Craigie and Mr. Czehowski continued their discussion concerning safety issues and benefits management.

Due to the lateness of the hour, Senator Townsend proposed the hearing on S.B. 133 be continued at another time.

The meeting was adjourned at 12:55 p.m.

RESPECTFULLY SUBMITTED:

Beverly Willis,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

DATE: