Committee advances HB6437 to modernize market conduct and licensing; debate over electronic notice defaults

The Insurance and Real Estate Committee voted to send HB6437, a Department of Insurance bill that updates market conduct and licensing rules, to the floor with proposed substitute language.

Committee presenters described the measure as modernizing audit procedures, communications to customers and other operations. One notable change in the substitute would permit notice of a suspended license to be delivered electronically. Presenters said customers who require paper could still get paper notices.

Nut graf: The measure aims to bring statutory language in line with current audit and communication practices, but members raised concerns about electronic notice defaults and the removal of a statutory requirement for at least one on-site audit.

Representative Pavlak Damato asked whether notice of a suspended license would be delivered electronically by default or by opt-in. Committee counsel said the language does not explicitly specify an opt-out mechanism; it is permissive and permissive-language defaults to the insurance commissioner’s rules. One lawmaker signaled intent to vote no, citing experience of missing important emailed notices and a preference for an opt-in to electronic notice rather than a default-to-electronic approach.

Representative Nuccio asked about removing the statutory on-site audit requirement and whether remote audits would save cost. Presenters said many audits can be conducted remotely, which could save money while preserving options for on-site work when needed.

The committee moved the bill to JFS, and the roll call vote approved the substitute; votes were recorded and held open until noon, per the clerk.