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