The insurance industry emerged from the just-concluded state legislative session in Colorado with few significant “hits” although the one-year extension of the no-fault auto insurance law was longer than most insurers wanted, according to the National Association of Independent Insurers (NAII).
“Overall, the session did little to harm the insurance industry,” NAII Northwest Regional manager Michael Harrold commented.
“One unfortunate consequence of the legislators’ becoming bogged down in controversies, with the Senate giving the House just eight minutes to agree to them, is that the low-income personal injury protection (PIP) policy under the no-fault law now will sunset on July 1,” he said. “Likewise, the state Division of Insurance also will sunset this year although there will be no immediate impact since the division has one year to wind down. The 2003 session will get another chance to preserve it.
“Colorado’s no-fault law definitely is very much in need of drastic improvement or it should be scrapped entirely,” he said. “The 2003 Legislature now will have to examine that issue in depth, hopefully with the active participation of Gov. Bill Owens, a role he has indicated he is willing to accept.” On May 8, the day before adjournment, the Senate accepted House amendments to Senate Bill 90 that deleted provisions for creating a new highly unfavorable PIP managed care appeal system and, instead, merely extended the sunset of the no-fault law until July 1, 2003.
Harrold said some worthwhile reforms did get through the session. One was House Bill 1121, making it clear that written disclosures do not need to be issued under the no-fault law prior to binding an auto policy. Another was HB 1305, applying medical fraud standards to claims under the no-fault law.
“Unfortunately, two other reforms were killed,” he said. “HB 1047 and HB 1461 would have reduced the number of options required to be offered under the no-fault law, which would have helped reduce the cost of insurance for consumers. And HB 1351 would created a pure choice auto system, enabling consumers to choose whether to remain under the no-fault system or go back to the traditional tort system, which also would have reduced the cost of insurance.”
NAII and other insurers were successful in killing a number of bills that would have negatively impacted the cost of auto insurance, Harrold said. Those included SB 91, which would have added a new PIP living expense benefit, and HB 1261, which would have made a driver’s insurance policy always primary in an accident involving a rental car.
The only workers’ compensation bill of any consequence that was passed was HB 1135, converting Pinnacol, the state workers’ comp fund, into a quasi mutual insurance company. The fund will be prohibited from doing business outside Colorado.
A motor vehicle salvage bill passed with NAII’s support was HB 1189, requiring that titles on rebuilt vehicles clearly state “rebuilt from salvage.”
A number of tort reform bills died during the session, Harrold said. Those include HB 1148 and HB 1398, relating to construction defects; SB 153, on class action lawsuits; HB 1060, on contingent fees; SB 1103, on punitive damages; and HB 1192, which would have made it difficult for businesses to deal with individuals who deliberately commit libel or slander during the legislative process.
“Headed by the new no-fault sunset deadline, some major issues now will have to be considered by the 2003 Legislature,” Harrold added.
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