Future of No-Fault System in Colo. Remains Uncertain

March 18, 2003

With the defeat of the major reform bills before the Legislature, the
future of no-fault auto insurance in Colorado has reportedly become much more uncertain.

The General Assembly first defeated House Bill 1225, which would have addressed spiraling personal injury protection claim costs on March 6. The bill would have reportedly established new standards for medical necessity and treatment guidelines as well as replaced the $2,500 monetary threshold with a more effective verbal threshold. Even before the bill was defeated, however, a number of amendments were adopted that reportedly severely reduced its cost savings potential.

On March 14, the House Appropriations Committee killed an alternate
reform proposal, House Bill 1321. This bill, a modified auto choice measure would have allowed consumers to opt out of the tort system, given consumers a choice of $100,000 or $80,000 personal injury protection coverage and maintained the current monetary threshold.

“House Bill 1225 represented the best chance to make meaningful reform to the no-fault system,” Michael Harrold, senior director of state government affairs for the National Association of Independent Insurers (NAII), said. “Only legislation that significantly reduces overall costs will preserve the no-fault system. The governor has pledged to veto any legislation that will not achieve significant cost savings and we support this position. A watered-down reform measure is not in the best interest of consumers. HB 1321 did nothing to establish quality standards for medical care and too little
to bring down costs in the no-fault system. The insurance industry’s objective is to fashion a solution that reduces costs and provides consumers with access to appropriate medical care. While we have worked hard to fix no-fault in Colorado, moving to a tort system would be better than continuing with a no-fault system that does not curb the cost drivers forcing consumers to pay more for insurance,” Harrold added.

In other recent legislative action, the Senate confirmed the appointment of Insurance Commissioner Doug Dean. Commissioner Dean was appointed to the post in January after having served as Speaker of the House.

“His experience as a leader in the statehouse will be an asset as he works with consumers, the insurance industry and other policymakers on major issues affecting the insurance marketplace,” Harrold said.

HB1273, which puts into law a number of the notice and disclosure provisions of the current regulation regarding insurers’ use of credit information, has passed both chambers. As originally introduced, HB 1273 would have required insurers that used credit scores to provide, upon the request of a consumer, a copy of the information that was obtained from a consumer reporting agency. Those provisions were removed in the House prior to the bill’s passage.

HB1251, which creates an auto theft prevention authority, passed the House, but not before having its funding mechanism removed.

Was this article valuable?

Here are more articles you may enjoy.