Colorado lawmakers voted down SB 103, the Unfair Claims Practices Act. The legislation was killed in the House Health and Human Services Committee in a 6-5 vote.
The bill would have “defined as an unfair claim settlement practice and a deceptive act or practice in the business of insurance the practice of providing any pay, salary, reward, bonus, promotion or other financial incentive to any person involved in the review of a claim for benefits or to persons performing utilization review, in connection, directly or indirectly, with the denial of a claim made by an insured or claimant or the cancellation of an insurance policy.”
The Property Casualty Insurers Association of America (PCI) said the bill would have prohibited insurance companies from giving bonuses and incentives to adjusters and other employees for denying claims.
“SB 103 was just an unnecessary bill conceived to advance trial bar interests,” said Kelly Campbell, PCI regional manager, who noted it would have increased litigation and driven up insurance costs . “Insurance carriers do not financially reward their employees for denying claims. Rather, it’s in insurers’ best interests to deliver good customer service and settle claims fairly.”
Campbell also noted that passage of the legislation would have given attorneys more incentive to pursue frivolous litigation and investigate insurance employee records while making it more difficult for insurance companies to investigate fraudulent claims.
Topics Legislation Claims Colorado
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