Insurance & Commerce- House

Thank you, Mr. Chair. Jill Thayer, Bureau of Legislative Research. You should all have in your meeting folders, a copy of the procedures for the fiscal impact statement process. Um, Any bill related to the state and public school life and health insurance program, which is run by EBD had a bill filing deadline of this past Friday, January 31st under the joint rules, no bill that will impose a new or increased cost to that program can be taken up by a committee until a fiscal impact statement has been provided. The Legislative councils approved a contract with the Segal Group to produce these fiscal impact statements, and they're in the process right now of, uh, gathering what they will need for their data request to ABD and we'll start producing those at fiscal impact statements in the next week or two. under these procedures which do have to be um adopted by this committee, the Senate Insurance and Commerce Committee adopted them yesterday. Um, it just really follows with the joint rules have set out that you all just adopted, um, but I will point out just a couple of things that um Siegel has been tracking these bills since the prefiling began in November and providing me with a list each day of bills they've identified. I've notified all of the sponsors per these procedures if they do have a bill that falls under that, and those bills have been flagged on your agendas and on the public health committee agendas. Um once Siegel provides the fiscal impact statement that will be given to the sponsor of the bill as well as the committee. chairs to which the bills have been assigned. And then it will be up to the committee chairs whether or not they want Siegel to come to present the fiscal impact statements when the bills are presented to the committee. Um, if there is a bill that comes before your committee that you would like to have a fiscal impact statement produced on, the committee, a majority of the committee can make that request or the committee chair can request it, um, and then your analyst, Michelle will notify me and Steel will work on those. Um At this point, we have about 27 bills that have been flagged, as I said, they're all indicated on your agendas and Mr. Chair, that's really a highlight of these. I'll take any questions. Any questions, members? Represent Baker recognized. Thank you Mr. Chair. Jill, what about shell bills that were filed that may apply when that language is engrossed, who will be reviewing that and is that still, I'm understanding from BLR that that still met the deadline requirements, and is that language being reviewed and will we be contacted when that's assigned a fiscal impact need. There are, I believe, 3, bills that have been identified that were shell bills that could potentially um, affect that they were filed before the bill filing deadline. Siegel has those on their list, as do I, and we'll just be tracking. for any amendments that fill in the content and then they'll make a determination of whether they need a fiscal impact. Thank you. Any further questions, committee? I warn you are recognized. Motion to approve the fiscal impact procedures. OK. We have a motion to adopt these procedures as a proper motion. Any discussion on the motion? OK, all in favor say aye. A post say no. Thank you. Thank you, miss there. remembers a couple of things just um reminders, I think we all know this, but HB 1353, unfortunately, we're gonna have to come back after session to hear that. um Ebanks could not be here this morning, um, but he has witnesses in town, so we're going to do that after session. Um, so I apologize for that, um, but that is what we're going to have to, how we're going to have to accommodate him. Um, HB 1177, we're not going to hear today, um, and I believe we can take fairly quickly is Representable Rose. Are you? Yes, would you, um, Come to the table, introduce yourself and present your bill. Thank you, Mr. Chair. Thank you, committee. I believe I've spoken to uh most of you and I've emailed and text with others, um, presenting HB 1309, uh title of the bills to amend the law concerning coverage of examinations for breast cancer and to clarify the cost sharing requirements for examinations for breast cancer. So in short, uh, this bill, uh, helps to ensure full coverage for breast cancer screenings. Uh, last session, uh, we eliminated co-pays for mammograms to remove the financial barriers to breast cancer screenings, uh, kind of in response to that costs were shifted to co-insurance, and this creates an additional financial burden for women. And so this bill closes that loophole, ensuring that women can access breast cancer screenings and diagnostic follow-ups without out of pocket costs. Uh, so what this really does is it prohibits insurers for charging co-pays, deductibles, or co-insurance for mammograms, breast ultrasounds, and diagnostic MRI, MRIs that are related to uh breast cancer detection. It also prevents any cost shifting, and this has a very narrow focus in that it only applies to breast cancer screenings and diagnostics, not for any unintended expansions. Uh, bottom line, uh, and I'm about to be open to any questions, but it's a a pretty straightforward fix, uh, that protects women's access to life saving breast cancer screenings and something to understand is that these are preventative in nature. Uh, early detection, literally saves lives. And so the sooner that women can detect breast cancer, uh, more lives will be saved. Better treatment can happen on the front end that also staves off much more expensive and aggressive treatment that would take place in a later stage of discovery and uh at that later stage, must much less likely of the same results that we can get when we detect it early and we save lives. Um, it also reduces healthcare costs, um. And we removed financial barriers for women having early detection. I appreciate your time and consideration for this. I'm open to any questions. Thank you, Representative Rose. Are there any questions from the committee? Seeing none. Is there anyone here to speak for or against this bill? Seeing none. What are the wishes of the committee. I have a motion to pass. proper motion. Is there any discussion on this motion? OK. All in favor of Representative Rose's bill, say aye. All opposed. He none. Congratulations, Mr. Rose, your bills passed. Thank you. Next up, without objection, we'll take uh Representative Johnson, House Bill 11 184, if you would please come to the end of the table. Please identify yourself and You may continue or may start. Representative Lee Johnson district 47. I have someone here with me today if it's OK with the committee, I'd like to have him introduce himself. No objections from the committee. Thank you. Please identify yourself. Thank you. My name is Greg Rahmer. I am with the mortgage Bankers Association of Arkansas. Um, Members, so this issue, it's, it's nice for me to be up here and talk about something outside the health care realm. This is an issue that came on my radar when one of my sons purchased a house this past year. We were warned by the closing company to be on the lookout for phone calls for for emails, for texts from people uh Passing themselves off as potentially the new owner of the loan. Um, apparently what happens in this segment is there once you apply for a mortgage and you are a credit check is run. There are third parties that can purchase your information and then uh in an unsolicited way, reach out to you to solicit, uh, your business, uh, and, and, and sometimes in the way they portray that, uh, the practice is somewhat deceptive in the sense that it does make it sound like this is the new person now that owns your loan. We were counseled to, you know, not take any calls from anyone that wasn't specifically related to the person that we were told was the loan officer through the through the closing process and um and so when this issue was brought to me, it was something I was familiar with and wanted to try to help correct. So what we're doing here is we're just adding um some language that you know, presents some requirements for people that are presenting. in this way to be upfront and how they present, um, and then, um, um, create some penalties around that as well, and I have someone here with me who can answer more questions and a more intelligent way, so I'd have him introduce himself and explain the issue a little better. Thank you. Thank you, Representative Johnson. What we're here today discussing is the practice of what are called trigger leads and um if you've purchased or financed a home in the last 3 years, perhaps you firsthand experienced this for yourself, but in case you haven't, I know the agenda's along today. I'll be very brief, but I do want to briefly describe the problem here. And why it's a problem, so this all begins when a mortgage applicant completes an application with their lender of choice, and as a part of that application process, the the mortgage lender has to access a copy of their credit report. That is the trigger in this process. Companies like Equifax can tell the type of loan that you're applying for, and they will sell your contact information as a lead to someone who seeks to purchase leads like that. Here's why it's a problem. Those who purchase this lead, these leads place calls to these borrowers during the application process and the calls are intentionally deceptive. This is done to try to make the applicant believe they're talking to someone who is associated with their mortgage lender. For instance, the caller may say, I'm working on your home loan and need more information. That's an actual quote. This is done in an attempt to get the applicant to share enough information with the caller so that the caller can make a loan offer right there on the phone, and as you might guess, the offer is going to sound too good to be true, so that the call or so that the applicant continues to call. Vulnerable or less savvy applicants may unintentionally share sensitive information with someone they're not doing business with and have no intent to do business with. Our applicants have repeatedly expressed frustration about this practice, but our lenders, us as a lender, we have absolutely no control over it. Often the applicant will receive 1020, or maybe even as many as 30 phone calls or text messages in the 30 minutes following the completion of their mortgage application. Now we can't completely stop this practice altogether. To my knowledge, that would require action at the federal level, but we can put some commonplace protections in place for our fellow Arkansans. This bill would require the caller to state their name and their company name, state how they obtained the customer's contact information, i.e., the explanation of a trigger lead. State that the call is a solicitation and based on personal information about the consumer that was purchased from a consumer reporting agency without the or permission of their lender, broker, or banker, and state that they are in no way affiliated with the creditor that the applicant actually applied with. I'm a 25 year practicing mortgage originator here in Arkansas. I'm more than happy to answer any questions you may have about this and ask you to please support the passage of this bill. Thank you. All right. Are there any questions from the committee? Representative Luton, you're recognized. He Yeah, isn't there any way to control Equifax and that much. Other than going through the federal government. Um, um. And, and then, and I agree with your effort on your bill, but it looks like to me we need to get to the heart of the source of who's selling that information that's given. should be given, in my opinion, confidentially to to Equifax and, and the others. I share your belief that a mortgage application is, is something that should be private between an applicant and the mortgage lender. Um, I can tell you through doing advocacy at the federal level as well. I don't think we're likely to see a bill at the federal level that will completely prohibit this practice. There is a bill that was in the House as of last session before they adjourned, it did not get passed. I'm hopeful that something will happen in this session at the federal level, but I can tell you That will only require consent from the borrower or require the caller to have a previous relationship with the borrower, so they'll still be able to receive these calls if they consent to receiving them or if the person or the company who purchased the trigger lead has an existing relationship with that borrower. So it will cut down on them. It will not completely eliminate them. Well, unless the current administration in Washington can make some changes. I don't see the federal government changing their position. Is that correct? Uh, probably hearsay for me to say thank you very much. Thank you, Mr. Chairman. Thank you. Representative Lehman, you're recognized for your question. I didn't know, but I since you recognize me, I'll, I'll ask the question I have that on my list. Well, my son works in this industry. He's been in it for years, and this is the number one complaint that he gets from people that he works with is that high on your list and other uh lenders, is that like the number one complaint you get from consumers without a doubt is the number one complaint that we receive for sure. I mean, most of us have a template language that we use when we receive an application now that we'll just copy a text over to the borrower and say, look, I'm, I'm going to pull your credit report. You're gonna get a bunch of phone calls. s just know that they're not from us. It's certainly an added added burden on our behalf, but at the same time, it doesn't stop the phone calls that come to us of applicants saying what did you do? You know, who did you sell my information to? And the truth is we haven't done a thing. All right, thank you, Representative Lederman. Representative Eaves, you're recognized for your question. How about down here? There we go. It is there a penalty if, if someone violates this? I, I can answer, I can answer that question if I can get my mic on. Uh, this is enforced through the Securities Commission. They can impose up to $10,000 fine or and they can suspend or revoke a license. So those are the penalties at their disposal. They can also issue a cease and desist, and so, you know, there there is the potential that language is not in here. That's, that's referenced, I guess because we're doing this under the Fair Labor Act would it would have that, that's reference back to that act. That's who does that enforcement. So how would, how would that how walk me through how that would work if, if I received a phone call that violated this law. And, and now I report it to my lender or yeah, I think ultimately it would and I may be I may have to have somebody else answer this officially, but I think the way that would work is it would the report would eventually be to the Securities commission and then they would investigate and have some sort of adjudication. I guess I'm asking how would I initiate a complaint or, you know, Who would I talk to first if I got this phone call or, you know, my parents got it or something like that. Well you're probably going to contact your lender and ask what to do next, the lender would refer you to the securities commission to make the formal complaint. OK, thanks. You know, and we've done things similar if you own a home, you know that you're subject to junk mail and a lot of that junk mail is deceptive as well. And Those fall under the attorney General's office, and we've had to refer things to the AG's office for deceptive practices in the past. Thank you, Representative Eaves. Representative, thank you mic's lit up. Do you have a question? Oh No, sorry, Representative stole all of my words. Thank you. Thank you. All right. Any more questions from the committee, saying none. Is there anyone in the audience that would like to speak for or against this bill. See no Representative Johnson, you're recognized clothes for your bill. I'm closed for a bill and make a recommendation do pass. I have a motion to pass, proper motion. Is there any discussion on the motion? No, no discussion. All those in favor say aye. All opposed. Congratulations to Representative Johnson and Pastor Bill. All right, we're going to move on to uh Representative Kavanaugh, he's ready to take a seat at the end of the table, please recognize yourself. Or identify yourself and Present Thank you, Mr. Chair. Chair, I can't speak this morning. Uh, state rep Frank Kavanaugh District 30. Um, this bill, as you see, it's a simple one-page bill. What it's just requiring is that if there is a preferred or perfected lien holder when there is a claim made on a motor vehicle claim that that perfected lien holders named on the check when it's issued. So it would be on the customer and the lien holder. um, and that only applies to lien holders that I have a physical. Location and state, Arkansas. And that's what the bill does. I'd be glad to answer any questions. All right. Any questions from the committee? See none. Is there any oh, Representative Leman, you're recognized for your question. Representative Kavanaugh, I mean, I like your bill, but how would this work with the insurance companies know the lien? I mean, how would that work? Yes, in the state of Arkansas, it's really easy to find out who the lien holder is if there's a lien on the state, you can get a search account with DFNA put the VIN number in and it pops up. We and, and the dealership world we use that all the time to help us with title problems. So that, that is easily done. And in the current process, most insurance companies are say all the insurance companies have a way to find the lien holder when it's a total loss. Thank you, Representative Leman. Representative Lee, you're recognized for your question. So I'm surprised this is not already the case and I remember Having, uh, you know, vehicles that were either totaled or wrecked or whatever and you get a check from the insurance company. It had, you know, My finance company on there, is that just something they were doing on their own? And this would force them to do it or is that not the case? That is usually the case on a total loss, but if we're talking about a partial loss of a $6000 check when you've got a $10,000 loan, usually those checks are only made out to the customer does not have the lien holder's name on it. And then what is happening for most of those checks, I would say a good portion of them is the customer is cashing those, not applying it to their debt and then a lot of lien holders and finance companies are then being told to. Come, please pick up the car. It's gonna be a repossession. And so, if you're able to add the lien holder's name on the check, then it could be applied to their debt or it could also help facilitate getting that cut that vehicle repaired rather than actually what happens in the long run, it hurts the consumer's credit because they have a thing on their credit for a repossession. Thank you. representatives, Representative Perry, you're recognized for your question. Thank you, Mr. Chair. Uh, Representative Kavanaugh, we spoke about this a little bit. So is there a minimum amount that would be added like, you know, the claim was 2000, 3000. You made a reference of 6000. But even for a 400 $500 claim. They're going to have to track down the lien holder to get a signature. On a check, so if I'm a local body shop and or I have a damage to my car and my, my lien holders in Northwest Arkansas. I've got a mail that check to them, get a signature, get a return back. Which, you know, in the male time, that's another 5 to 10 days of rental car that I've got to pay for or another insurance company has to pay for it. So is there a minimum amount listed in this. No. And I will say that's why I limited it to the state of Arkansas lien holder, and I will say lien holders in the state of Arkansas. If that check is already made out, we have a process already in process that if someone has our name on it and a body shop, we already have that process set up, so it doesn't really delay it anymore. And from a secured lienholder process, you know, we're the secured lender. We're the ones that's at risk on that loan. It is not It's not the insurance company, it's not the body shop. It is actually the person who took the risk in financing that automobile. So follow up on that. So you have a process worked out, but that doesn't mean everybody's got a process worked out so that we didn't, that would entail more time and headaches as far as getting a check signed from you minimal amount of claims. I would say most lien holders, if not all, have had this happen when there's already been claims made with an insurance company and so they already have that process in place. We're, we're not really asking anything different. And that if you're a perfected lien holder in the state of Arkansas, that your lien is perfected for a reason. It's so that you actually can have that, that money applied to a debt that is owed to you. And that's all we're asking that they either do is either repair the vehicle or have it applied to the debt. OK. Thank you, Mr. Chair. Thank you, Representative Perry. Representative Baker, you're recognized for your question. Thank you, Mr. Chair. Robert Kavanaugh, is there any requirement here, uh, for when this check is issued, will it be mailed to the lien holder or is it still going to be mailed to the insured individual. The or language seems, in my experience that that check could be cashed by either or. person. They don't need both to sign off on it. Is that correct? And the way that those checks are made out is made in both our names and both of them had to sign off on the check. So, and they normally get mailed to the consumer, and then the consumer will come to the lien holder and say, can you sign up on this check? So it's, it's more of a kind of holding the insured individual's feet to the fire to come to the table and say, hey, we both need to sign off on this and and you're confident that the oral language doesn't allow them to do it individually, that it doesn't have to be and. That is my understanding, yes. But I can verify, but that is my understanding I just in my experience with dealing in this exact scenario, the I think the or the consumer may still be able to make the argument that the or allows them to cash it entirely and that might undermine a little bit of the intent. Thank Thank you, Representative Baker. All right. So is there anyone in the audience that would like to speak for or against this bill. Seeing none, Representative Kavanaugh, you recognized. Oh, OK, I see an audience member if you would please come to the table, please identify yourself for the record and you may, uh, you may start. Thank you, Mr. Chair. Committee. My name is Derek Smith. I'm an attorney with the Mitchell Williams law firm here in Little Rock, Arkansas, and I'm here speaking on behalf of State Farm Insurance Company. Uh, I think Representative Perry's points sort of Reflect what our concerns are in in the last two years, State Farm has made over 80,000 physical damage claim payments in the state of Arkansas. Individualized claim payments under this bill, they would have to conduct a lien search for each one, and before they could make the claim payment would have or before the consumer would receive the payment to repair their vehicle, they would have to send the check to the lien holder. And get that back. So it's it's a lot more work than I think people anticipate and the delay to our policyholders is of significant concern to us. All right. Would you be open to questions? Yes, sir. Any questions from the committee? I do OK. Representative Acker, you recognized for your question. Thank you. Derek, would you argue that um it's not already in the fiduciary responsibility of the insurance company to make sure that they're issuing the check to the real risk holder. It depends on the product. So first party claim we know who the lien holder is. That's our policyholder, our obligation is to And in those cases you typically do see it. Uh, third party claims our obligation is to our policyholder to make sure they pay the damaged debt. Once we do that, what happens is really not not our concern. OK. I, I guess that's where I would disagree. I would think that it's the fiduciary responsibility of the insurance company to make sure that the claim is paid and if there's a lien on that, then I don't see the, the difficulty of a massive company like State Farm not being able to execute that expeditiously. Thank you, Representative Chair or Representative Bakker. Are there any questions from the committee? See none Thank you for your testimony. Thank you. Is there anyone else here to speak for or against this bill? Seeing nonpresentative Kavanaugh, you recognized close for your bill. Thank you, Mr. Chair. This bill is simply can't be summed up much better than Representative Aaker just did. This is really about trying to even the playing field and it has, when the insurance companies say that it's going to put a burden on them to find a lien holder. I will just leave you with this on a third party claim, when it's a total loss, they can find us. If they can find us on a total loss, they can find the lien holder on a partial claim. And with that, I would appreciate a good vote. Or the wishes of the committee. I have a motion that's a motion. Any discussion on the motion? See none. All those in favor say aye. All opposed say no. I have it. Congratulations, Mr. Kavanaugh, you have or Representative Kavanaugh, you've passed your bill. Representative Beatty, I believe you have a couple of bills to present. Which one would you like to do first, Representative? OK. Just introduce yourself and present your bill, representative. Thank you, Mr. Chair. Representative Howard Beatty, District 95, Ashley Shico County. Uh, today, I'm presenting House Bill 1378, uh, which is, um, uh, to amend the composition and meeting requirements of the state board of Finance and repeal requirements for the employment of a chief compliance officer by the state Board of Finance. Um, House Bill 1378 basically makes 4 updates to the state board of Finance. One, it lowers the required number of board members to make a quorum from 7 to 6. The board in the past has struggled to reach a quorum because members have other responsibilities in state government. One member of the insurance commissioner can only vote on health benefit plans, so there are some restrictions. Uh, the second thing the bill would do, the securities commissioner on the board, uh, it would replace security securities commissioner on the board with the Secretary of TSNS, um, I think Act 475 of 23 transferred administrative duties of the state securities department to the state bank department and allowed the bank commissioner to act as the securities commissioner. Um, so this will ensure that two board positions are not held by a single individual on, on the board. And the 3rd, 3rd thing is it permits the governor to have a designee to serve on the board. So it allow flexibility in the event that the governor's schedule prevents attendance at a meeting. And then the last thing is it eliminates the requirement that the chief compliance officer be employed by the board. Uh, the compliance officer is a physician that's authorized for the treasurer of the state, and it's not practical for the chief compliance officer to be, uh, paid by the treasurer of the state, but employed um by the state Board of Finance. So those are the four things that the bill, uh, would do with that. I'm closing it. I, I would entertain questions. Thank you, Representative Beatty. Any questions from the committee? Oh, sorry, Represent Woo, you're recognized. Thank you. Mr. Beatty. Representative Beatty, how, how did you run it the decision to make its transformation and shared services secretary on that board. Uh, on, on that board as far as the TS and S, um, I think that was just the agency that was handling the the transition and and to to designate that that individual. I don't think there was any, any great. great effort for our thought placed into that. I just think that that was the board that was uh Designated OK, who could you refresh our memory as to who all the members are. Is in the bill, but I will, I will cite. Um, I, I think it cites the members of the board, the governor, uh, is a member of the board, the treasurer of the state, the auditor of the state, the bank commission, the secretary of the Department of Finance Administration, Secretary of the Department of Transformation and Shared Services will be the additional person that this bill passes, also requires one person with knowledge or experience in commercial banking, a person holds a Series 7 licenser as general Securities' representatives, and that person has to have at least 5 years of experience as a general securities representative, once certified public accountant who is licensed in Arkansas has at least 5 years of experience as a certified public accountant, one member of the general public, the insurance commissioner, the insurance commissioner is only a voting member on uh health benefit plans, uh, and those are the members of the board. Well, most of them have a qualifications like DFA and auditor and treasurer. One experience does the transformation secretary have as it relates to finances of billions of dollars. I think that a key player in in state government and, and actually in transformation Shared Services, they, they touch all the different agencies of the state. So I think they have an important role for, for the state. Well, do they have any financial experience relative to interest. rights and money investment and that type of thing. I think by sitting on this board they'll get some, some good experience and I don't know the qualifications of the, of the current secretary. So the board is going to be used as a training ground for the transformation secretary. I don't think it will be a training ground, sir. No. Is is the purchasing department in Trent. Formation. I, I don't know. You probably have more knowledge in that area than I. OK. Well, I, I, I just have some questions about, not the fact that it's a cabinet member, but the fact of the one that was selected, but that's fine. Thank you. Thank you, Mr. Chairman. Thank you, sir. Thank you, Representative Wharton. Any further questions from the committee? Uh, Marlstrom, you're recognized. Thank you. Can you give me some background as to why, um, the Securities commissioner was taken off. I would have thought that would have been an and and then add the why I, I'm not just not understanding that. The Securities commissioner and the bank department are now one person. So the reason they moved securities commissioners, the bank commissioner serves in a dual role in that position. Could that be split out so that we'd have somebody that understands securities and has that experience. If we went back and repealed Act 475 of 2023, I think that could be an option. We do that type of stuff all the time. I just wondered what the logic was that's, that's the logic. Is a wood Representative Betty, uh, one more question about the compliance officer. What, what were they complying with checking on or making sure that the board complied to I think overall general compliance on the board. Do what now? Overall general compliance of the board in that position with the treasurer's office. All right. Thank you. Thank you Wooton. Any further questions, committee? OK. Seeing none, um, what is the will of the, well, let me ask, I don't believe there is, but is there anyone who's signed up, anyone who'd like to speak against this bill. OK. Representative Bety, are you closed for your bill? I am close emotion and a good vote. Thank you, Representative Betty. Representative Wooton, do you recognize Thank you, Representative Betty. Representative Wooton, do you recognized? I have a we have a motion to pass from Representative Wooton. All in favor say aye, both say no. Congratulations, you have passed your bill. Thank you. Uh, the next bill, if can be right on. is Senate Bill 133. Uh, Senate Bill 133 is to amend the uniform commercial code to define a central bank digital currency under the Uniform Commercial Code and to modify the uniform commercial code definitions of money and deposit account. Uh, been a little bit of false information that's been spread out on this bill, uh, to give a little background information, uh, as policy makers in the US and around the world started looking at uh forms of digital asset called central bank digital currency, or CBDC, uh, CBDCs or digital assets that would be issued by a central bank, so the, the, the Federal Reserve and would remain as a liability on the central bank's balance sheet. Uh, so contrary to popular beliefs, see. Uh, BDCs are not intended to digitize the dollar as the dollar's largely digital today. Instead, the issuance of a CBDC would fundamentally rewire the banking system and financial system, the US, by changing the relationship between the individual customers and depositors of the bank and the Federal Reserve. While there are several different potential models for CBDC. I think in January of 2022, there's a discussion paper by the Fed that indicated it was exploring such a model where CBDC would be a liability to the Federal Reserve and would widely available to the general public. The Fed promised not to move forward without clear support from the executive branch and Congress, ideally in the form of a specific authorizing law, uh, the Bankers Association responded. the Fed's paper and its continued to advocate that there is no compelling case for a central bank digital currency. Um, Why it matters and why we need this language in there. Uh, the implementation of a CDBC would change the very nature of the banking industry and financial system and economy. Proponents claim that they could bring benefits, many of these benefits are just theoretical in nature and would be hard or impossible to realize. The risk associated with the issuance of a CBC or tangible in many cases they're unavoidable. Importantly, uh, the issuance of CBTC would require I would set the Fed up as the direct competitor for bank deposits and deposit accounts because CBDC would be a liability to the Federal Reserve, it would inevitably sit on the Fed's balance sheet and instead of at your local bank. Even if delivered through the bank to the Fed, CBDC would be more akin to your cash sitting in a safe deposit box rather than your actual bank deposit account. This deposit substitution would drain the nation's deposit base and limit the banks' abilities to make loans and make economic impact in their communities. Generally it's unclear what policy goals the CBDC would achieve in the US that can't be better achieved by means, uh, CBDC would uh enhance weak and non-existent financial systems in the US, uh, and CBDC does not appear well positioned to enhance the underlying financial capabilities are extended the reach of financial services to well-deserved markets in the US, um, a couple of things that, that this bill specifically will do. The bill does 3 things. It defines what a CBDC is. It clarifies that a CBDC is not money in an Arkansas bank, and it clarifies that CBDC is not a deposit account in Arkansas. By clarifying that CBDC is not money in Arkansas in the, in the uniform commercial code, it places a constitutional speed bump, so to speak, in the way our federal government implements CBDC in the state. Other states have done similar rules and laws. This this law pretty much models what Florida did in their system. Uh, this is not implementing the language of the 2022 UCC, which would have smooth. and smooth out and lead the roadwork for D CBDC, uh, the banking association has spoken in favor of this bill. There's no opposition, uh, and with that I'll entertain questions. Thank you, Representative Beatty. Representative Wooton, you're recognized. Representative Matty, could you explain that in a country boy's terms, exactly what you're trying to keep from happening in 10 words or less. I, I can basically what, what we're trying, trying to do is to keep the federal government coming in and creating a central bank digital currency and having control because once they have that central bank, uh, currency out there pretty much they have access, they could control I think you went over 10 words, but it basically in control of your money because they could tell where you're spending it, where it is, they've got control of it and they can limit you on where you could spend it. So it's maintaining control in the systems that we have in the state and the financial system we have here in Arkansas. So I was trying to keep the Fed out of Arkansas banking business mainly, yes, sir, as well said rules regulations up there, but that's up there. Down here it's, it's our ball game, correct? This is a protection, uh, bill for Arkansas depositors in banks. OK, thank you. That's, that's what I wanted to hear. Thank you. Any other questions from the committee? Seeing none, uh, is there anyone who would like to speak against this bill? Seeing no one, would you like to close for your bill Beatty? I'm closed and sorry I went on for for so long with this, but there were some false information out there. I felt like it was to lay the groundwork, and put all of it out there. So I'd appreciate a motion and a good vote. Thank you, Representative Beatty. Representative Ladyman you are recognized. Motion to pass some ladyman, um, discussion on the motion? Seeing none, all in favor of motion do pass, say aye. Any opposed say no. Congratulations, you've passed your bill. Thank you, Mr. Chairman. Thank you, members of the committee. Representative Johnson, do you want to go to the end of the, I think you have a couple you'd like to run. Yeah. And members I spoke with represent Minon, she is not wanting to run 1307 today, so I'll try to keep you posted on that. I believe you have a couple of bills, servers and Johnson. I do. Which one would you like to start with? House Bill 1287, please. OK, thank you. You may proceed. Representing Johnson District 47, um, members, this is one of what I hope to be several bills that I can bring before this committee over the next few weeks that have been discussed, negotiated with carriers in our state, um, I don't believe there's any opposition to this bill. This bill right now there's currently a requirement if you submit a claim to an insurance company and they deny that claim, they have to notify you as the provider that that claim is being denied that gives you the opportunity to ask why, to appeal the denial. This just adds a stipulation. that if they downcode a chart. So what that means, and we define it in the law because it's a new, new term for the statute. If I submit a claim and I think I provided service to charge up to like a level 2 in the ER there are 5 levels of service, level 2, level 1 is the highest level 5 is the lowest, and I submit the claim as a level 2 charge, and then the insurance company says, you know what, I don't think you did enough to merit level 2, we're going to downcode that to a lesser uh paid. charge of level 3, this just requires that they give us notification. They're doing that so that we can have an opportunity to look at that, try to understand why, and, and if need to can appeal that process and I'd be happy to try to answer any questions. Thank you, Representative Johnson. Any questions from the committee? OK Saying now there's no one signed up, but there's anyone who like speak against this bill. Um, Johnson, you recognize the clothes for your bill. I'm closer on Bill Baker Bo and do pass. a motion to pass by Johnson, all in favor say aye. post say no. Congratulations, you have passed your bill. Thank you. Uh, Senate Bill 48. You, you may proceed. Uh, members, this is a bill I'm helping co-sponsor with Senator Boyd. This is a transparency bill. This bill is intended to try to make sure that insurance companies are disclosing fully all the deductibles that are tied to a policy where this might come up is if you had an add-on policy, say say for wind or hail damage, sometimes those are something that is tacked on towards the back of the policy, the deductibles presented at the front, you as the insured might expect. that the front deductible is all you have to pay in this back end deductible sometimes can catch you by surprise. This is just requiring disclosure up front of any deductibles in the policy to the person that owns the policy, and I'd be happy to answer any questions. Representative Eve you. Thank you. I just noticed you changed, or I guess Senator Boyd did from a residential property to an owner occupied residential property is the intent to leave out rental properties or what's going on there. So this is a great question. You might have seen me slip to the back of the room to visit with some folks from AID and I'm going to ask them to come to the table and help me try to answer that. My, my understanding is there are, um, Other, other places in the statute that perhaps cover this for commercial properties for, uh, owners of other, um, rental properties. Uh, I don't think the intent is to exclude, um, that, uh, you know, I think at the end of the day, the owner, this reason for specifying owner is the owner is the one that's responsible for the roof, which is the part of the house that's most likely to be damaged by winter hail, um, whereas the renter is not necessarily responsible for that, so the reason I think for the specificity and all My colleague here explain better is because those add-on policies are tied back to the owner specifically in the case of like, you know, the renter could let the roof cave in and and the owner's ultimate responsibility that I may have butchered that. Go ahead, you try to do a better job than me. Thank you. Sir, if you don't mind just introduce yourself and who you're with and proceed with your testimony, Jimmy Harris Arkansas Insurance Department. So How this bill originated, uh, I believe, is several insurers started adding separate wind hail deductibles to property insurance policies. They might, they might, uh, throw a 3% when how deductible on, on your, on your homeowners, uh, along with your, say, $2500 all peril deductible. Some insurers were, were, you know, they would have the all per deductible on the dec page. Uh, and generally endorsements are found at the end of your declarations page. While in the endorsements would be where that 3 or 4% or 5% went he deductible, uh, could be found $300,000 home. That might be a $15,000 deductible. What this bill does is it requires all those deductibles to be found together early on, and the dec page, wherever the allarel deductible is, the separate one halo. amount should be found together. um, I believe, uh, owner occupied was added, uh, just to, to clarify the intent, um, residential property insurance is, is, is an older term, uh, that generally meant owner occupied. Uh, if, if a renter is in a structure, they're not going to have a separate wind hail deductible as uh he was just saying. Uh, so there, there's no need for that disclosure. Generally, a renters's policy is going to cover the contents alone, uh, commercial policies are generally more sophisticated buyers. They're, they're more experienced in uh in their insurance purchases and most of these deductibles are fully disclosed upfront. So those are, those are. The reasons why owner occupied was added. brought up on a person owns 4 or 5, you know, 10 rental properties, they're not the, they're not owner occupied, but I mean let me understand that they're going to be covered under a landlord's policy and all of those deductibles would be listed in the policy. Are they going to be listed together or it's written now this law would, would not require that. I guess I'm trying to I mean, I think it's a good idea, but I don't know why you'd limit it to only owner occupied, and I mean Unless I'm not understanding, so yeah, I mean, that, yeah, I mean Representative Lantern said whoever's paying the policy should know, I mean, I'd like to know if I had rental properties that all those are together and I can see what I'm getting into if I had several rental properties. Is that something we could Is there an issue that you see doing that, or am I misunderstanding what we're doing here. OK, so you're saying the bill sponsors who we need to talk to. You're saying it, but you're not saying it. I'm, I'm happy to pull this bill down and have some discussions around that amendment. I had some of the same questions, and I think it's a great idea, I think the disclosure, yeah, I think the disclosure idea is very appropriate. I had some of the same concerns that it appears to me it's the way we've written this now that that now we're exempting residential policies from any disclosure if it's not owner occupied, so if you, if you, it's like you almost should be the owner of the policy is. As opposed to the occupancy again, you know, you know, I'm co-sponsoring this bill. I wasn't involved in the negotiations on the Senate side. It's now on the House side. I'm happy to pull this bill down, have some discussions with some folks, try to clarify that issue if that's the will of the committee. I think we're going in the right direction. I think what you said was said better than me that we may be limiting a group here or Yeah, what you said. Yeah, we'll be happy to pull that down. We'll work on it and we'll bring back. Thank you. Good point. Representative Johnson, um, even though you're going to pull up, would you, would you entertain a question? Yeah, 100% happy to have more discussions we end it the right way. Mr. Harrison back in the Yes, sir. So, So what y'all are saying. I had one company that quoted me a $5000 to increase my deductible to $5000. And then they said, well, on the roof, it'll be, it'll be uh 9000. So you're saying if that $9000 is somewhere else in that policy that this will lump it all together. Yes, sir. And so you said the insurance department sees that that's wrong. To lump it all together? No, sir. No, sir, not at all. Uh, I understand, I understand that it's these policies it's written, but why a rental property and then you said that you didn't have a problem with the bill. No, I think, I think I said that I wouldn't have a problem with changing the bill, the insurance department would not have a problem with that at all. Well, the bill start out with the owners and rentals in there? Well, I believe 2 years ago is when the deductible what happened in the ensuing two years. Yeah I cannot answer that. So I, I, I, I, I feel like that it ought to all be in one area of the policy. So it's not hidden down in the bottom part or an afterthought that someone may not see. I agree 100%. Yes, I agree. I think that's the intent of the bill. We just want to clarify that it applies to all residential policies and not excluding some or the other. Yeah, that's what. I fucking or, or agree with less eaves and thank you. Thank you, Mr. Harris. Thank you. Thank you, Representative Johnson. Thank you. OK, I believe we have one more bill left Richardson, I believe you have a bell? Oh, and members, there is an amendment that staff will be passing out now. OK I I Representative Richardson, if you'd like to go ahead and commence explaining the amendment. Yeah, thank you, Mr. Chair, Jay Richardson, Fort Smith District 49 members you'll be receiving a member of some changes that we have made to the bill. We reached out to a couple of uh Organizations to solicit feedback and we we the changes that have been made were a result of one of the big players in this market, so we've made it a more A friendly bill for for them that's not going to be a significant increase in their cost for doing business. One of the big changes in there is we reduced In the original bill, we had it to where you needed to have 2 people on site. We've removed that, uh, we also had on there where we clarified on page 3 regarding the lighting, I think the original had maintained light part maintain a lighted parking lot illuminated at an intensity of at least 2 ft. We've changed that to maintain lighted parking spaces and walkways, so with some of those changes we, we feel like this is a, a bill of safety and not one of what I've been told uh overreach, but this is the amendment and I can explain as we move forward with the bill. you like to proceed with the motion on your amendment motion pass for the amendment. We have a motion to adopt the amendment made by Representative Richardson, is there any discussion on this? On that motion. Um, all in favor of the motion to adopt the amendment, say I say no. Representative Richardson, you are recognized to present the bill as amended. OK. Thank you. Thank you, Mr. Chair. Members, uh, we, uh, this bill came to me through a a constituent and uh if you don't mind, I'd like to read a a statement from from the gentleman who how this came about. Um, he's actually in the audience and asked me to read this for him. So if you guys would give me a a little latitude to do that. It reads sitting front now to a funeral for a person that you thought you pretty much had forever. With this earth shattering when a person's life has been taken from you. It's only been one another funeral that shattered my heart and that was my mother. My mother told me once that she wanted her children to bury her and not for her to bury her children because that's a pain that no parent should have to deal with. I don't understand what she meant. I didn't understand what she meant back then since death is death, but I can honestly say that I know now what she meant. It definitely shifts your perspective on life. People talk about what it's like losing somebody you love, but it is truly a moment you could never prepare yourself for, giving back to going back to March 24th, 2023. I found myself in a space that I felt like was a tunnel. People were talking, but they seemed to be so far away. I felt like my head was underwater. Someone talking and speaking, but I just couldn't hear them clearly or even articulate what was being said. I would not wish this pain on my worst enemy. I lost my child, but my grandchildren lost their mother. One death impacted so many households. The generosity, compassion, big-hearted, cheerful and thoughtful person that my daughter was and showed to others was life changing to so many. I'd like to say that with this time that That with time that has passed, I'm completely better, but I'm not. Every day is a new battle and some days are better than others. I spent months focusing on my energy, on the reason to push forward. My daughter and my grandchildren were my world. Chanel, Chanel's children were her world. The light at the end of the tunnel is a 4th beautiful grandchild that was left behind. I see her and my grandchildren every day. As long as I have breath in me and my mission is to tell my grandchildren what kind of mother they had and how their smile could light up a room. We are all living on borrowed time, being counted down by the unknown stamped clock. Death is just a penalty that we all have to endure. The purpose of trying to create a law is so that babies will not have to suffer when young mother is taken from them for selfish reasons or taken away from the cause of a person who has no respect for human life. My grandbabies suffered and will always suffer, especially the youngest boy, because he always stayed up waiting on his mother to get home from work at 4 in the morning. So this proposed law is to protect mothers and other people who work late hours by themselves. My daughter and grandbabies is trying to make the world a better place if this proposed law would pass, it would give my grandbabies light at the end of a dark tunnel. It also showed them that their mother did everything she could to get back to a better life. I would like to make the world safer for all citizens of the world in Fort Smith when I Research the crime reinforcement that was 40.5%, well above the average, with 22.7 assaults, robbery and murder, even though Fort Smith has been working towards reducing the crime rate is still so much room for improvement. This was Mr. Charles Moore, in 23, his daughter was shot and killed in a convenience store robbery. Uh, while we understand that this bill will not get rid of crime and that's not the purpose of the bill. The bill is just to provide some framework for basic safety measures for people that are working at these convenience stores. I think if you read through the bill and the amendments that have been made, most good players are already doing these things, so it's not adding anything. But there are some out there who who refuse to take safety precautions for their own employees. Uh, I think the original bill that we had may have gone a little too far, specifically when you're talking about, I mean, uh, private entities, but I think After conversation with with uh some some of our larger uh owners, uh, the bill makes a lot of sense. And, and again, I can, I can't guarantee you, but I'm sure. What we're requiring or what we're asking to see happen, they're already doing. It's just the ones that aren't. We want to put some guard rails that they would start doing. And with that, I'll take questions. Representative lunch drum, you're recognized. I completely agree with the owner on losing his child. It's horrible. I'm just wondering, convenience stores can do all of this stuff right now. There's nothing stopping an owner from adding more parking lot lights, adding a strip to tell you how tall the perpetrator is, all these things now can happen without us. How come that isn't happening? I mean, they, they can choose. to do this or not to protect their employees in a bad area. Help me with this. I think you just answered your question. They can do this. What we're asking is that they have to do this. Um, I pulled in the other day to a convenience store and it wasn't well lit, the parking lot wasn't well lit. I pulled out. It just didn't seem like a safe place for me to be. The market will take care of that well lit means clean and there's just, I'm just wondering. If you want to do business, you make your business safe. So help me understand this. I'm just lost a little bit of why we need it. They can do this on their own, can't they? Again, they can do this on their own, which means that they don't have to. Uh, what we're asking is that they have to do these basic things to keep people safe. Follow up, does the city council not not. Aren't they in charge of this type of thing, wouldn't the City council, if you had an increase in robberies or this type of horrible crime wouldn't the city council come in and go, OK, we've got a problem here. This section of town needs bank but. I, I again, I think this is a choice for our owner to make, uh, I'm not aware of a city of our city council being involved to to enforce that. OK, thank you. Thank you, Representative Wootton, you're recognized. Thank you, and Representative Richmond Richard before I make any comments. I want everyone to understand that I'm a former owner of numerous severalvenience stores all over the state and I agree that we have some out there that need this type of regulation. But my concern is that it goes too far and could you share with us what each one of the amendments do the change from the original bill before I make any comments. Yes, sir. On page 2. Line 30 we're removing the requirement of two people there after 9 p.m. OK. Uh, we changed the wording on the lighting. OK. Uh And it, yeah, that moves everything up. I'm sorry. I'm listening to your conversation. Uh. And uh I think those were the biggest, the biggest ones that we've And another one is one that I had looked at was I thought we had changed and we didn't was the window. Yeah look we, we, I, I meant to pull that one and it, and I didn't get that done, so I'll need to do that. The other, the other, the other one that, that I need to ask you about is, did, did they take out, did you take out the 9 p.m. closing, blocking the doors. No, sir. You let that in. What, what about a truck stop? That has truckers in and out all night long and showers available and that type thing and, and then you're, you're inside sales is where you really make your money. You don't make, you don't make your money on gasoline, um, it's more of a, uh, well, I have a name for it, a leader for sales versus, you know, the inside sales. So But can you, can you share with us how the deal, how we pilot and some of the other larger truck stops and I had several of those too, but how, how would they deal with this? You know, that's a very good point, Representative Wooton, and I didn't, didn't. I'm sorry, I thought somebody else was talking. I was letting him speak. didn't take that into account, to be quite honest with you, Mr. Wooten, but you make a very, very good point that needs to be addressed. Yes, sir. OK, so we need to address that and, and unlocking the doors. Let me we, we had one big operator that uh had the great idea of putting the where they could lock the door if, if the robbery was about to take place or was taking place. Well, what happened, they locked the door with The robber inside them and then, you know, all hell broke loose. So, uh, and my condolences to your constituents. I fully understand what they're saying because I live with this day and night for 30 years. So it's, it's a, it's a, it's a challenge that the industry has faced, but also um the law enforcement is uh represents Lus pointed out from the standpoint of enforcement. How, how would you enforce this, to be sure that they were complying. Who, who would be, would it, would it be uh tobacco control people, they don't have enough to do what they're taking care of now. Who would enforce to be sure that they are meeting these regulations. Yeah, that was a thought that it would come from, from, uh, potentially go through ABC, but uh I'm not sure that that to your point, that they're staffed enough to do something like that. So, who, who, who will enforce the rules. So it would probably be local PD from that, that provision, but again, it's, it's information that I I didn't take into account, but we'll have to look at. OK, would you pull your bill down then and consideration of the push through to be sure that because most of you who, who Probably all of you have been in a convenience store and the candle is well well away from the door and so they'll have to, they'll have to remodel and that'll be quite an expense for most most um operators to be able to have a push through a drawer and then lock the doors at 9 o'clock. I just, you know, I just really have a problem with that. No, I don't disagree with that. I think there is some opportunity to to make those adjustments, uh, my concern would be even with those adjustments, uh, I think there may Yes, sir. I, I would be happy to, to and I and I and I fully understand what you're saying. We have a crime problem in this nation, and there's no doubt about it. And For, for, for the sake of uh of studying at Tommy Robinson solved the problem of years ago in Pulaski County when he said we're going to have deputies with shotguns in back rooms, and you're not going to know which one. And and and and we need to, we, our law enforcement needs to adopt that attitude, and I think most in Arkansas do. Yeah, thank you, sir. So will you pull the bill down? Yes, sir, absolutely. Yes sir, we'll pull it down. Thank you very much. It I'll talk to him OK Representative Richardson has, um, Agreed to remove the bill or pull the bill. A couple of you did have questions for him, so maybe just discuss that with him offline. Thank you, members. Um, I believe that is the last bill for this morning, not for today. Um. Um, one announcement real quick. Maybe we're the 12th, we're taking our committee picture, 950 a.m. on the house steps. So let's not be late. Um, that's next Wednesday at 9:50 a.m. and of course we're reconvening after session to accommodate Representative Eubanks. So, um, is there any further business for the committee? Sing no we are adjourned.