First Regular Session

Sixty-first General Assembly

LLS NO. 97­0540.01 EBD HOUSE BILL 97­1302

STATE OF COLORADO

BY REPRESENTATIVE Owen

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING INCOME­SENSITIVE MOTOR VEHICLE INSURANCE POLICIES.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Repeals automatic repeal date for disclosure and continues the availability of income­sensitive motor vehicle insurance policies for persons with qualifying incomes that provide $25,000 medical protection and $5,000 wage loss protection.

Allows a second package of income­sensitive motor vehicle insurance coverage for persons with qualifying incomes, consisting of $10,000 of medical protection, liability coverage of $15,000 to one person in any one accident, $30,000 to all persons in any one accident, and $10,000 for property damage. Allows any person who qualifies for this package of coverage to waive loss of wages coverage, instead of only those persons without earned income.

Repeals the requirement that the insurer must demonstrate in rate filings submitted to the commissioner that a savings of a minimum of 20% of the personal injury protection coverage premium will be realized under an income­sensitive motor vehicle insurance policy the first year an insurer offers income­sensitive motor vehicle insurance policies.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  10­4­706 (3) (h) and (5), Colorado Revised Statutes, 1994 Repl. Vol., are amended, and the said 10­4­706, as amended, is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:

10­4­706.  Required coverages ­ complying policies ­ PIP examination program. (3) (h)  For the first year an insurer offers the coverages authorized in this subsection (3), such insurer shall demonstrate in rate filings submitted to the commissioner that a savings of a minimum of twenty percent of the personal injury protection coverage premium shall be realized under the plan. Any disclosure form to be used to record an insured's election for any coverage authorized in this subsection (3) shall be submitted to the commissioner for preapproval.

(3.5) (a)  NOTWITHSTANDING SUBSECTION (1) OF THIS SECTION, AN INSURER MAY ALSO OFFER AS AN ALTERNATIVE TO THE MINIMUM COVERAGES REQUIRED UNDER SUBSECTION (1) OF THIS SECTION, OR THE ALTERNATE MINIMUM COVERAGES ALLOWED PURSUANT TO SUBSECTION (3) OF THIS SECTION, TO PERSONS QUALIFIED PURSUANT TO PARAGRAPH (c) OF THIS SUBSECTION (3.5), A POLICY PURSUANT TO THIS SUBSECTION (3.5) WHICH SHALL BE DEEMED TO PROVIDE MINIMUM COVERAGES REQUIRED FOR COMPLIANCE WITH THIS PART 7. ACCEPTANCE OF ANY POLICY OFFERED PURSUANT TO THIS SUBSECTION (3.5) SHALL BE VOLUNTARY AND SHALL BE SUBJECT TO ALL REQUIREMENTS OF THIS SUBSECTION (3.5).

(b)  FOR PERSONS QUALIFIED PURSUANT TO PARAGRAPH (c) OF THIS SUBSECTION (3.5), THE COVERAGES AND LIMITATIONS PROVIDED IN A POLICY ISSUED PURSUANT TO THIS SUBSECTION (3.5) SHALL BE AS FOLLOWS:

(I)  COMPENSATION WITHOUT REGARD TO FAULT, UP TO A LIMIT OF TEN THOUSAND DOLLARS PER PERSON FOR ANY ONE ACCIDENT FOR PAYMENT OF ALL REASONABLE AND NECESSARY EXPENSES FOR MEDICAL, CHIROPRACTIC, OPTOMETRIC, PODIATRIC, HOSPITAL, NURSING, X­RAY, DENTAL, SURGICAL, AMBULANCE, AND PROSTHETIC SERVICES, AND NONMEDICAL REMEDIAL CARE AND TREATMENT RENDERED IN ACCORDANCE WITH A RECOGNIZED RELIGIOUS METHOD OF HEALING, PERFORMED WITHIN FIVE YEARS AFTER THE ACCIDENT FOR BODILY INJURY ARISING OUT OF THE USE OR OPERATION OF A MOTOR VEHICLE;

(II)  NO COMPENSATION SHALL BE OFFERED FOR REHABILITATIVE OCCUPATIONAL TRAINING;

(III)  COMPENSATION ON ACCOUNT OF THE DEATH OF A PERSON FOR WHOM DIRECT BENEFITS ARE PROVIDED UNDER THIS SECTION, PAYABLE TO THE ESTATE OF THE DECEASED, IN THE TOTAL AMOUNT OF FIVE THOUSAND DOLLARS; AND

(IV)  LEGAL LIABILITY COVERAGE FOR BODILY INJURY OR DEATH ARISING OUT OF THE USE OF THE MOTOR VEHICLE TO A LIMIT, EXCLUSIVE OF INTEREST AND COSTS, OF FIFTEEN THOUSAND DOLLARS TO ANY ONE PERSON IN ANY ONE ACCIDENT AND THIRTY THOUSAND DOLLARS TO ALL PERSONS IN ANY ONE ACCIDENT, AND FOR PROPERTY DAMAGE ARISING OUT OF THE USE OF THE MOTOR VEHICLE TO A LIMIT, EXCLUSIVE OF INTEREST AND COSTS, OF TEN THOUSAND DOLLARS IN ANY ONE ACCIDENT.

(c) (I)  TO QUALIFY FOR A POLICY PURSUANT TO THIS SUBSECTION (3.5), A PERSON AND SUCH PERSON'S RESIDENT SPOUSE SHALL NOT HAVE A COMBINED ANNUAL GROSS INCOME, FROM ALL SOURCES, OF MORE THAN TWENTY THOUSAND DOLLARS.

(II)  THE BASE YEAR FOR CALCULATION OF THE MAXIMUM QUALIFYING COMBINED ANNUAL GROSS INCOME FOR PURPOSES OF THIS PARAGRAPH (c) SHALL BE THE YEAR 1991, AND SUCH MAXIMUM QUALIFYING COMBINED ANNUAL GROSS INCOME SHALL BE READJUSTED ANNUALLY ON JANUARY 1, STARTING JANUARY 1, 1993, BASED ON THE INCREASE, IF ANY, FOR THE PRECEDING CALENDAR YEAR IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS AS PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS.

(III)  INCOME VERIFICATION FOR A POLICY PURSUANT TO THIS SUBSECTION (3.5) SHALL BE THROUGH WRITTEN EVIDENCE FROM THE PERSON SEEKING TO QUALIFY FOR A POLICY ISSUED PURSUANT TO THIS SUBSECTION (3.5) OF THE ANNUAL GROSS INCOME OF SUCH PERSON AND SUCH PERSON'S RESIDENT SPOUSE FOR THE MOST RECENT TAX YEAR AVAILABLE. SUCH EVIDENCE SHALL BE CONTAINED IN A DOCUMENT ACCEPTABLE TO THE POLICY PROVIDER. FOR PERSONS QUALIFIED PURSUANT TO THIS PARAGRAPH (c), FURTHER VERIFICATION OF ANNUAL GROSS INCOME SHALL BE REQUIRED IN THE SAME MANNER EVERY THIRD YEAR FOLLOWING THE DATE UPON WHICH THE POLICY IS ISSUED.

(d)  ANY INSURER PROVIDING POLICIES PURSUANT TO THIS SUBSECTION (3.5) MAY OFFER TO ANY PERSON QUALIFIED FOR SUCH POLICIES PURSUANT TO PARAGRAPH (c) OF THIS SUBSECTION (3.5) ANY COST­CONTAINMENT MEASURE, AS A PART OF ANY SUCH POLICY, AS SPECIFIED IN SUBSECTION (2) OF THIS SECTION.

(e) (I)  ANY INSURER PROVIDING POLICIES PURSUANT TO THIS SUBSECTION (3.5) SHALL PROVIDE TO ANY PERSON QUALIFIED FOR SUCH POLICIES PURSUANT TO PARAGRAPH (c) OF THIS SUBSECTION (3.5) A LOSS OF GROSS INCOME BENEFIT UNLESS SUCH PERSON WAIVES SUCH COVERAGE. SUCH BENEFIT SHALL BE FOR A LOSS OF GROSS INCOME DUE TO AN INJURY ARISING OUT OF THE USE OR OPERATION OF A MOTOR VEHICLE IF SUCH INJURY PREVENTS THE INJURED INSURED FROM EARNING INCOME OF UP TO AND INCLUDING FIVE THOUSAND DOLLARS, WHICH SHALL BE PAID AS FOLLOWS:

(A)  THE EQUIVALENT OF ONE HUNDRED PERCENT OF THE FIRST ONE HUNDRED TWENTY­FIVE DOLLARS OF LOSS OF GROSS INCOME PER WEEK;

(B)  SEVENTY PERCENT OF THE NEXT ONE HUNDRED TWENTY­FIVE DOLLARS OF LOSS OF GROSS INCOME PER WEEK; AND

(C)  SIXTY PERCENT OF ANY LOSS OF GROSS INCOME PER WEEK IN EXCESS THEREOF, WITH THE TOTAL LOSS OF GROSS INCOME BENEFIT UP TO FOUR HUNDRED DOLLARS PER WEEK.

(II)  A LOSS OF GROSS INCOME BENEFIT SHALL NOT BE PAYABLE FOR MORE THAN FIFTY­TWO WEEKS.

(f) (I)  A POLICY ISSUED PURSUANT TO THIS SUBSECTION (3.5) SHALL APPLY ONLY TO THE NAMED INSURED, RESIDENT SPOUSE, AND RESIDENT CHILD. FOR PURPOSES OF THIS SUBSECTION (3.5), A CHILD IS A RESIDENT IF SUCH CHILD QUALIFIES AS A DEPENDENT OF THE NAMED INSURED UNDER THE FEDERAL INCOME TAX CODE, 26 U.S.C., SEC. 151 (c).

(II)  ANY PERSON INJURED IN AN ACCIDENT, OTHER THAN THOSE PERSONS WHOSE COVERAGE IS SPECIFICALLY LIMITED IN A POLICY PURSUANT TO SUBPARAGRAPH (I) OF THIS PARAGRAPH (f), SHALL RECEIVE COVERAGE FOR SUCH EXPENSES OF NOT LESS THAN THE MINIMUM COVERAGES MANDATED BY PARAGRAPHS (b), (c), (d), AND (e) OF SUBSECTION (1) OF THIS SECTION IF EXPENSES INCURRED BY SUCH INJURED PERSON EXCEED THE LIMITS OF A BASIC PERSONAL INJURY PROTECTION POLICY.

(5)  Subsections (3) and (4) of this section and this subsection (5) are repealed, effective July 1, 1997.

SECTION 2.  Effective date ­ applicability. (1)  This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, 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.

(2)  The provisions of this act shall apply to policies written or renewed on or after the applicable effective date of this act.