First Regular Session
Sixty-first General Assembly
LLS NO. 970181.01 JBB
HOUSE BILL 971185
STATE OF COLORADO
BY REPRESENTATIVE McPherson
A BILL FOR AN ACT
CONCERNING INTERESTS IN THE BODILY INJURY CLAIMS
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments which may be subsequently
Prohibits any person or entity from purchasing an interest in or percentage of another person's claim for bodily injury. Authorizes a person or entity to make a loan secured by an interest in another person's claim for bodily injury, but limits the security interest to the principal amount loaned plus interest. Limits the amount of interest and finance charges that may be charged on a loan secured by an interest in another person's claim for bodily injury to 18% per annum.
Provides that any agreement in violation of the prohibition
is voidable at the option of the injured person.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Part 3 of article 21 of title 13, Colorado Revised Statutes, 1987 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW SECTION to read:
1321302. Interests in claims for bodily injury. (1) EXCEPT AS PERMITTED UNDER SUBSECTION (2) OF THIS SECTION, NO PERSON OR ENTITY SHALL PURCHASE AN INTEREST IN OR PERCENTAGE OF THE PROCEEDS OF ANOTHER PERSON'S CLAIM FOR BODILY INJURY.
(2) THE PROHIBITION SET FORTH IN SUBSECTION (1) OF THIS SECTION SHALL NOT APPLY TO A LOAN, MADE TO A PERSON WHO SUFFERS A PERSONAL INJURY THAT IS SECURED BY AN INTEREST IN THE PROCEEDS OF THE PERSON'S CLAIM FOR BODILY INJURY IF, IN ADDITION TO ANY OTHER STATUTORY OR REGULATORY REQUIREMENTS, THE FOLLOWING CONDITIONS ARE SATISFIED:
(a) THE SECURITY AGREEMENT PROVIDES THAT THE LENDER IS ONLY ENTITLED TO A RETURN OF THE PRINCIPAL AMOUNT LOANED TO THE INJURED PERSON PLUS THE INTEREST ACCRUED THEREON;
(b) THE RATE OF INTEREST AND ALL OTHER FINANCE CHARGES COMBINED DO NOT EXCEED EIGHTEEN PERCENT PER ANNUM; AND
(c) THE LENDER MAY NOT DECLARE A DEFAULT ON THE LOAN UNTIL FORTYFIVE DAYS AFTER A FINAL, NONAPPEALABLE ORDER HAS BEEN ENTERED.
(3) ANY AGREEMENT MADE IN VIOLATION OF SUBSECTION (1) OF THIS SECTION IS VOIDABLE AT THE OPTION OF THE PERSON WHO SUFFERED THE BODILY INJURY.
SECTION 2. Effective date applicability.
This act shall take effect January 1, 1998, and shall apply to
any claim for bodily injury accruing on or after said date; except
that, if a referendum petition is filed against this act or an
item, section, or part of this act within the ninetyday
period after final adjournment of the general assembly this is
allowed for submitting a referendum petition pursuant to article
V, section 1 (3) of the state constitution, then the act, item,
section, or part, if approved by the people, shall take effect
on the date of the official declaration of the vote thereon by
proclamation of the governor or January 1, 1998, whichever is
later, and shall apply to any claim for bodily injury accruing
on or after said date.