AIA Pleased With 2004 Colorado Legislative Session

The Colorado legislature adjourned sine die on May 5, giving final approval to several measures before going home. The American Insurance Association (AIA) reported that positive legislation affecting the insurance industry, including a bill preserving the use of credit-based insurance scoring, a measure toughening the state’s drunken-driving law and a uniform arbitration bill, were passed in the legislature’s final days.

AIA stated that several bills that would have had a negative impact on the property/casualty insurance industry were defeated. These included a bill that would disregard the first five points on a motor vehicle report, legislation requiring mandatory medical payment coverage within auto policies and a pay-at-the-pump medical payment bill.

“This year’s legislative session in Colorado can be characterized as one of the most challenging sessions the insurance industry has faced,” said Fred Bosse, vice president, Southwest Region, AIA. “In the end, insurers pulled together and were able to pass some significant reforms and defeat several pieces of seriously flawed legislation that ultimately will help preserve a competitive insurance market in Colorado.”

Several bills of significance were passed and have been sent to Gov. Bill Owens (R) for his signature, including the following:

HB 1090 – Rhodes (R): A bill that would correct the appellate court decision in Newsome wherein the court allowed a subcontractor’s employee to sue the general contractor in tort, rather than seek recovery under workers’ compensation. This bill has already been signed into law by the governor.

HB 1193 – Fairbank (R): A bill that increases the fines and penalties for people who drive without insurance.

HB 1232 – Spradley (R): A bill concerning guidelines for when enhanced motor vehicle insurance coverage is offered. This bill has already been signed into law by the governor.

HB 1292 – Clapp (R), HB 1236 – McCluskey (R) and SB 216 – Lamborn (R): A series of bills that include provisions for the use of claims history reports in homeowners insurance and consumer protections for the use of credit-based insurance scoring. While HB 1292 includes a prohibition on the use of insurance scoring, SB 216 includes language that supersedes the prohibition language in HB 1292.

SB 125 – Kester (R): A bill calling for prompt payment of auto insurance benefits.

“The fight to defend an insurer’s use of credit information was a hard fought battle, but the legislature carefully weighed the merits of this very predictive tool and wisely decided to follow the precedent set by so many other states in the country and allow Coloradans to benefit from its use,” Bosse said. “In addition to the regulation already in place, if the governor signs this legislation, Colorado will now have one of the most restrictive set of consumer protections for credit-based insurance scoring in the country that goes even further than the language adopted by the National Conference of Insurance Legislators (NCOIL).”

Several bills were defeated as well, including:

SB 52 – Dyer (R): A bill that would have concealed the first five points of driving violations from public view. This bill would have prevented auto insurers’ access to driving records with violations such as driving without insurance, failure to yield to an emergency vehicle, failure to yield to a pedestrian, driving on the wrong side of the road, running a red light and speeding up to 19 miles over the speed limit. SB 52 was defeated on the Senate floor.

SB 150 – Tapia (D): A bill that created pay-at-the-pump auto insurance. This bill was defeated in committee.

HB 1287 – Wiens (R): A bill that would have mandated medical payment coverage in auto policies to fund trauma care centers. This bill was defeated on the House floor.

HB 1116 and HB 1389 – Butcher (D): Both created a Consumer Insurance Board within the Department of Insurance. The first was defeated in committee and the second was killed by its sponsor.

“The defeat of these bills helps to preserve Colorado’s open, competitive insurance market, which encourages insurers to continue doing business in the state,” Bosse said. “Enactment of these bills would have had a severe, negative effect on an insurer’s ability to accurately price and offer its products.”

The governor has until June 4, 2004, to review and sign or veto legislation passed; legislation not acted upon by the governor by that date is pocket-vetoed.