Q&A: Colorado Division of Insurance Commissioner Michael Conway | Business

Just days after the most destructive wildfire in Colorado’s history, Colorado Division of Insurance Commissioner Michael Conway called a virtual town hall for the hundreds of victims who lost their homes in Boulder County.

The Marshall fire burned more than 6,000 acres between Louisville and Superior on Dec. 30, destroying almost 1,100 homes and businesses in Boulder County and damaging many others. One person was killed.

Conway wanted to help guide residents through the long, complicated insurance claims process, and reassure them the state would do everything it could negotiating with insurance companies.

He didn’t give them any false hope about the grueling process that lay before them.

“You all are dealing with an unbelievable tragedy,” Conway said during the video-conference meeting attended by more than 800. “My heart truly breaks for everything that you all are going through. You’ve lost homes, but with your homes you’ve lost everything. … It’s going to be incredibly hard for you to build back.”

On the wall of Conway’s office, viewers could see the picture of a lion that had obviously been drawn by a child.

In the three-and-a-half months since the fire, Conway has attended at least 12 public hearings, town council meetings or panel discussions to help provide complicated insurance information as well as explain what those victims are going through. Many face an under-insurance problem that will repay them far less than their homes were worth – the majority worth upwards of $1 million.

Conway, who has been the commissioner since 2018, answered some questions from the Denver Gazette Monday, including about proposed legislation that would help owners whose home was destroyed by wildfire recover insurance proceeds quicker, and with less-burdensome inventory proof requirements.

The following answers have been edited for length.

Q: Why is it important for you to personally attend all the meetings you have since the Marshall Fire?

A: A few different reasons, but at the top of the list it’s just important for people to know that their government officials are out there and that they care. That they’re working for them to try and find solutions to the problems they’re running into. That’s the kind of mindset we took with the specific asks we have made of the insurance companies to try and help people recover from the fire. That was really our main driving force: To figure out ways we thought we could ask insurance companies to work with their insured and make the insurance recovery just a little easier.

Air quality monitors provide real-time measurements for people who live near the Marshall fire

Q: I’d like to ask you about the lion picture on your wall, and the importance of it. You mentioned it in that very first meeting with fire victims.

A: We were preparing for that town hall, just days after the fire. … I had put that lion up really as a kind of joke. More than anything, it’s kind of a conversation starter. I mean many people on these zoom meetings have elaborate backgrounds, and I just had this lion behind me. It’s obviously drawn by a child. So going into that town hall I thought a lot about the fact that I was going to have something sitting behind me on that wall and it would remind people quite a bit of what they had lost. I struggled a tone with leaving it up there. But I fundamentally landed on the spot that I thought we should leave it up. I wanted to leave it up as a constant reminder for us. At the Division of Insurance, a constant reminder for me every day that we’ve got more work to do for the people of Louisville and Superior and unincorporated Boulder County – and those from the East Troublesome Fire (The second largest wildfire in Colorado’s history in 2020 destroyed the outlying Grand Lake community, engulfing 193,182 acres in three days and destroying 370 homes and 188 outbuildings). And just as importantly, for future fire victims. There’s a lot more work we’ve got to get done.

Q: Can you give us an update on the Marshall Fire under-insurance investigation? I know you requested a lot of information from the insurance companies involved.

A: We’re still analyzing that data we’ve got coming in from the insurance companies. We’re working to build some baseline data, at least initially, of what the average homeowner had there and specifically what their under-insurance will be if the cost to rebuild is at $200 or $300 per square foot. It’s to really kind of start the conversation about potential solutions going forward, for long-term solutions … We’re taking a hard look at the underlying data to see if there’s any help we can get to the homeowners that were impacted by the Marshall Fire , too. It’s going to be a harder thing to find (long-term) solutions. Just to be completely candid, there may be a lack of complete ability to make the homeowners whole.

Q: After the big California wildfires, and the East Troublesome Fire, why didn’t the Division of Insurance get on this issue then? We saw the exact same under-insurance problem then.

A: We’ve been having discussions around that issue with (legislative) representatives. House Bill 22-11 (Insurance Coverage For Loss Declared Fire Disaster. “Concerning insurance coverage for insured losses incurred as a result of a declared fire disaster … The bill establishes new coverage requirements for homeowners insurance policies issued or renewed in Colorado, which requirements apply in the event of a loss of a residence as a result of a declared fire disaster.The bill also establishes new requirements for insurers who issue or renew homeowners insurance policies, which requirements concern an insurer’s handling of policy claims after such a loss occurs.” ) which was really designed to deal with what we’re hearing about most coming out of the Marshall fire related to inventory issues, and then the time to rebuild…. Those complimenting the under-insurance problem that have played out in the American West, and the southeast states. We’re trying to find the right solution, and give as much information as possible to homeowners to make informed decisions. But states ha ven’t found a kind of magic solution there… We also are looking at potential availability issues (certain insurance carriers not providing coverage in certain states prone to wildfires and hurricanes, for example) Colorado, up to this point, has not had that but I’m afraid that could be coming and that will obviously exacerbate any under-insurance problems.

Q: What’s the status of HB22-11?

A: I was just testing at the Capitol on that. It got out of the Senate committee with an unanimous vote in favor. It’s moving through the process. The insurance companies aren’t fighting it, and obviously the advocates and owners have lined up very strongly behind it, and we’re in support of it too.

Q: Will it raise rates?

A: Legislators have raised concerns about that… There’s two reasons why I don’t anticipate that will happen. It’s so narrow. It only applies to wildfires, and to make it even narrower it only applies to wildfires that have been declared a disaster by the Governor. It also only applies to total losses. … That’s such an incredibly small subset of homeowners out there, I don’t fundamentally see it raising rates.

Q: Moving on to other insurance issues, why are there no short-term health plans in Colorado?

A: That’s a question you need to ask the insurance companies. We’d be happy to have short-term plans that comply with the law. The short-term carriers that are out there simply don’t want to comply with the statutory requirements in Colorado, so they haven’t offered coverage here.

Q: Last week, the division fined Bright Health at least $500,000 to settle more than 100 complaints that it wasn’t paying for the care its customers received among other issues. We’ve heard from agents whose clients are in collections because of this issue, and Bright Health had large layoffs last year, too. What’s fine enough? Was a cease and desist order considered?

Bright Health agrees to pay Colorado at least $500,000 to settle consumer, provider complaints

A: It was essentially a cease-and-desist order review analysis. That would have required Bright Health to completely stop acting as an insurance company in the state of Colorado. That would have been extremely detrimental to those folks who have Bright Health insurance coverage right now. I think about all those people who have paid through their deductibles and that have their doctors lined up through Bright Health. That would be an incredibly detrimental impact to those folks. … I was really holding them accountable for the mistakes they had made, but then also putting an incentive – a fairly large incentive – in place for them to get everything back in order, and to make sure going forward they have solutions. ( In order for Bright Health to avoid paying the other half of the $1 million fine, Bright agreed to process and pay all old claims from Peak providers by April 7 and pay 95% of correct claims by April 22 and stay at a high level through the rest of the year.)

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