First Regular Session

Sixty-first General Assembly

LLS NO. 97­0656.01D MCV SENATE BILL 97­227

STATE OF COLORADO

BY SENATORS Ament, Duke, Chlouber, Congrove, Johnson, Lacy, Matsunaka, Mutzebaugh, Powers, Rizzuto, Tebedo, and Wattenberg;

also REPRESENTATIVES Anderson, Grampsas, Salaz, Schwarz, and Taylor.

REENGROSSED

TRANSPORTATION

A BILL FOR AN ACT

CONCERNING FINANCIAL RESPONSIBILITY REQUIREMENTS FOR MOTOR VEHICLES.

Bill Summary

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

Provides that it is an unfair method of competition and an unfair or deceptive practice in the business of insurance to deny, refuse to issue, refuse to renew, refuse to reissue, cancel, or otherwise terminate an insurance policy, to restrict insurance coverage on any person, or to add any surcharge or rating factor to a premium of an insurance policy solely because of:

$ A conviction for, or because of points accumulated against a driver's license for, a speeding offense, other than taking part in a speed contest, if the offense does not involve an accident or claims for property damage or bodily injury. Excludes from such prohibition any insured whose driver's license is suspended or revoked as the result of a speeding offense.

$ A conviction for an offense that does not involve the operation of a motor vehicle or any license suspension or revocation imposed because of such offense.

Provides that a person whose driver's license is revoked for an offense that is not related to the operation of a motor vehicle or whose driver's license is cancelled because of the person's physical incompetence is not subject to requirements for proof of financial responsibility for the future. Authorizes any person who has previously been required to post proof of financial responsibility for the future because of an offense of underage purchase, consumption, or possession of alcoholic beverages to end such posting.

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

SECTION 1.  10­3­1104 (1), Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW PARAGRAPH to read:

10­3­1104.  Unfair methods of competition and unfair or deceptive acts or practices. (1)  The following are defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:

(x)   DENYING, REFUSING TO ISSUE, REFUSING TO RENEW, REFUSING TO REISSUE, CANCELING, OR OTHERWISE TERMINATING AN INSURANCE POLICY, RESTRICTING INSURANCE COVERAGE ON ANY PERSON, OR ADDING ANY SURCHARGE OR RATING FACTOR TO A PREMIUM OF AN INSURANCE

POLICY SOLELY BECAUSE OF:

(I) A CONVICTION FOR AN OFFENSE THAT DOES NOT INVOLVE THE OPERATION OF A MOTOR VEHICLE OR A DRIVER'S LICENSE REVOCATION OR SUSPENSION RESULTING FROM SUCH AN OFFENSE. THIS SUBPARAGRAPH (I) INCLUDES, BUT IS NOT LIMITED TO, A REVOCATION IMPOSED UNDER SECTION 42­2­125 (1) (m), C.R.S.

(II)  THE FAILURE OF A PERSON TO OBTAIN OR MAINTAIN A MOTOR VEHICLE INSURANCE POLICY OR CERTIFICATE OF SELF­INSURANCE AS REQUIRED BY SECTIONS 10­4­705 AND 10­4­716. THE PROVISIONS OF THIS SUBSECTION (II) DO NOT APPLY TO A PERSON WHO HAS BEEN CONVICTED UNDER SECTION 42­2­1409 (1) OR (2), C.R.S., OF OPERATING A MOTOR VEHICLE OR PERMITTING A MOTOR VEHICLE TO BE OPERATED WITHOUT A COMPLYING INSURANCE POLICY OR CERTIFICATE OF SELF­INSURANCE.

(III) (A)  A CONVICTION FOR, OR POINTS ACCUMULATED AGAINST A DRIVER'S LICENSE FOR, A SPEEDING OFFENSE UNDER SECTION 42­4­1101, C.R.S., IF THE INSURED WAS OPERATING A MOTOR VEHICLE LESS THAN TEN MILES PER HOUR ABOVE THE REASONABLE AND PRUDENT SPEED OR THE MAXIMUM LAWFUL SPEED AND IF THE OFFENSE DOES NOT INVOLVE AN ACCIDENT OR ANY CLAIM FOR PROPERTY DAMAGE OR BODILY INJURY.

(B)  THE PROVISIONS OF THIS SUBPARAGRAPH (III) DO NOT APPLY IF THE DRIVER'S LICENSE OF THE INSURED IS SUSPENDED OR REVOKED AS A RESULT OF THE SPEEDING OFFENSE, INCLUDING, BUT NOT LIMITED TO, A SUSPENSION BECAUSE OF ACCRUAL OF EXCESSIVE POINTS AGAINST THE INSURED'S LICENSE UNDER SECTION 42­2­127, C.R.S., OR A REVOCATION BECAUSE THE INSURED IS A HABITUAL OFFENDER UNDER PART 2 OF ARTICLE 2 OF TITLE 42, C.R.S.

SECTION 2.  42­7­406 (1), Colorado Revised Statutes, 1993 Repl. Vol., as amended, is amended to read:

42­7­406.  Proof required under certain conditions. (1)  Whenever the director revokes the license of any person under section 42­2­125 or 42­2­126, or cancels any license under section 42­2­122 because of the licensee's inability to operate a motor vehicle because of physical or mental incompetence, or cancels any probationary license under section 42­2­127, the director shall not issue to or continue in effect for any such person any new or renewal of license until permitted under the motor vehicle laws of this state, and not then until and unless such person files or has filed and maintains proof of financial responsibility as provided in this article; except that persons WHOSE LICENSES ARE cancelled pursuant to section 42­2­122 (2.5) OR REVOKED FOR OFFENSES THAT ARE UNRELATED TO THE OPERATION OF A MOTOR VEHICLE, INCLUDING, BUT NOT LIMITED TO, A PERSON WHOSE LICENSE IS REVOKED PURSUANT TO SECTION 42­2­125 (1) (m), shall not be required to file proof of financial responsibility in order to be relicensed.

SECTION 3.  42­7­408 (1) (c) and (5), Colorado Revised Statutes, 1993 Repl. Vol., as amended, are amended to read:

42­7­408.  Proof of financial responsibility ­ methods of giving proof ­ duration ­ exception ­ repeal. (1) (c)  Notwithstanding the three­year requirement in paragraph (b) of this subsection (1), if an insured has been found guilty of a driving offense pursuant to section 42­4­1301 (1) or (2) or if the insured's license has been revoked pursuant to section 42­2­125 (1) (m) or 42­2­126 only one time and no accident was involved in such offense, proof of financial responsibility for the future shall be required to be maintained only for as long as the insured's driving privilege is ordered to be under restraint, up to a maximum of three years. The time period for maintaining the future proof of liability insurance shall begin at the time the driver reinstates his or her driving privilege.

(5) (a)  Persons previously required to post three years proof of financial responsibility for the future pursuant to a conviction under section 42­2­125 (1) (m) shall only be required to post proof of financial responsibility for the future consistent with the provisions of this section ARE AUTHORIZED TO END SUCH POSTING ON JULY 1, 1997.

(b)  THIS SUBSECTION (5) IS REPEALED, EFFECTIVE JULY 1, 1998.

SECTION 4.  Effective date ­ applicability. This act shall take effect July 1, 1997, and shall apply to actions taken by insurers on or after said date and to driver's license revocations reinstated on or after said date.

SECTION 5.  Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.