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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0146.01 JLB HOUSE BILL 98­1104

STATE OF COLORADO

BY REPRESENTATIVES Veiga and Swenson;

also SENATOR Tebedo.

REENGROSSED

TRANSPORTATION & ENERGY

A BILL FOR AN ACT

CONCERNING CERTAIN REQUIRED AUTOMOBILE INSURANCE COVERAGE AMOUNTS.

Bill Summary

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

Committee on Mandatory Motor Vehicle Insurance. Effective July 1, 1998, reduces the described minimum automobile insurance coverages as follows:

Item Reduction Amount

Personal injury protection (PIP) $50,000 to $5,000

coverage

Rehabilitation procedures $50,000 to $5,000

Loss of gross income $400/week to $5,000

States that, to the extent the above­described benefits have not been exhausted, the remaining benefit amounts may be used for the other described benefits. Requires insurers to make available policy options that provide more than the minimum coverages.

Retains legal liability minimum coverages at current levels.

Eliminates basic policies for qualified low­income persons.


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

SECTION 1.  10­4­706 (1) (b) (I), (1) (c) (I), (1) (d) (I), and (3), Colorado Revised Statutes, are amended, and the said 10­4­706 (1) is further amended BY THE ADDITION OF THE FOLLOWING NEW PARAGRAPHS, to read:

10­4­706.  Required coverages ­ complying policies ­ PIP examination program. (1)  Subject to the limitations and exclusions authorized by this part 7, the minimum coverages required for compliance with this part 7 are as follows:

(b) (I)  Compensation without regard to fault, up to a limit of fifty FIVE 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; except that, to the extent that the benefits offered pursuant to paragraph PARAGRAPHS (c) AND (d) of this subsection (1) have not been exhausted, the remaining value of such benefits shall be available to the insured or injured person entitled to benefits for treatment pursuant to this paragraph (b).

(c) (I)  Compensation without regard to fault up to a limit of fifty FIVE thousand dollars per person for any one accident within ten years after such accident for payment of the cost of rehabilitation procedures or treatment and rehabilitative occupational training necessary because of bodily injury arising out of the use or operation of a motor vehicle; EXCEPT THAT, TO THE EXTENT THAT THE BENEFITS OFFERED PURSUANT TO PARAGRAPHS (b) AND (d) OF THIS SUBSECTION (1) HAVE NOT BEEN EXHAUSTED, THE REMAINING VALUE OF SUCH BENEFITS SHALL BE AVAILABLE TO THE INSURED OR INJURED PERSON ENTITLED TO BENEFITS FOR TREATMENT PURSUANT TO THIS PARAGRAPH (c).

(d) (I) (A)  Payment of benefits equivalent to one hundred percent of the first one hundred twenty­five dollars of loss of gross income per week, seventy percent of the next one hundred twenty­five dollars of loss of gross income per week, and sixty percent of any loss of gross income per week in excess thereof, with the total benefit under this subparagraph (I) not exceeding four hundred dollars per week FIVE THOUSAND DOLLARS, from work the injured person would have performed had he not been injured during a period commencing the day after the date of the accident, and not exceeding fifty­two additional weeks. In addition payment shall be provided for expenses not exceeding twenty­five dollars per day which are reasonably incurred for essential services in lieu of those the injured person would have performed without income during the period commencing the day after the date of the accident and not exceeding fifty­two additional weeks. SUCH ADDITIONAL PAYMENT SHALL BE MADE ONLY IF AND TO THE EXTENT SUCH PAYMENT IS WITHIN THE FIVE THOUSAND DOLLAR TOTAL BENEFIT AMOUNT PAYABLE UNDER THIS SUBPARAGRAPH (I).

(B)  NOTWITHSTANDING SUB­SUBPARAGRAPH (A) OF THIS SUBPARAGRAPH (I), TO THE EXTENT THAT THE BENEFITS OFFERED PURSUANT TO PARAGRAPHS (b) AND (c) OF THIS SUBSECTION (1) HAVE NOT BEEN EXHAUSTED, THE REMAINING VALUE OF SUCH BENEFITS SHALL BE AVAILABLE TO THE INSURED OR INJURED PERSON ENTITLED TO BENEFITS FOR TREATMENT PURSUANT TO THIS PARAGRAPH (d).

(f)  EVERY INSURER PROVIDING POLICIES PURSUANT TO THIS SUBSECTION (1) SHALL MAKE POLICY OPTIONS AVAILABLE TO CONSUMERS THAT PROVIDE COVERAGES GREATER THAN THE MINIMUMS SET FORTH IN PARAGRAPHS (b), (c), AND (d) OF THIS SUBSECTION (1).

(g)  AN INSURER OFFERING THE COVERAGES AUTHORIZED IN THIS SUBSECTION (1), AS AMENDED BY H.B. 98­1104, ENACTED AT THE SECOND REGULAR SESSION OF THE SIXTY­FIRST GENERAL ASSEMBLY, SHALL DEMONSTRATE IN RATE FILINGS SUBMITTED TO THE COMMISSIONER THE SAVINGS TO AN INSURED PURCHASING THE MINIMUM REQUIRED COVERAGE AFTER THE ENACTMENT OF H.B. 98­1104 COMPARED WITH PURCHASING THE MINIMUM REQUIRED COVERAGE PRIOR TO THE ENACTMENT OF H.B. 98­1104.

(3) (a)  Notwithstanding anything in subsection (1) of this section, an insurer may offer, as an alternative to the minimum coverages required under subsection (1)(b), (1)(c), (1)(d), and (1)(e) of this section, to persons qualified pursuant to paragraph (c) of this subsection (3), a basic personal injury protection policy 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) shall be voluntary and shall be subject to all requirements of this subsection (3).

(b)  For persons qualified pursuant to paragraph (c) of this subsection (3), the coverages and limitations provided in a basic personal injury protection policy shall be as follows:

(I)  Compensation without regard to fault, up to a limit of twenty­five 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.

(c) (I)  To qualify for a basic personal injury protection policy, 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 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 basic personal injury protection policy shall be through written evidence from the person seeking to qualify for a policy issued pursuant to this subsection (3) 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) may offer to any person qualified for such policies pursuant to paragraph (c) of this subsection (3) 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) shall provide to any person qualified for such policies pursuant to paragraph (c) of this subsection (3) a loss of gross income benefit; except that if the insured represents in writing that neither the insured nor the insured's resident spouse has received, during the thirty­one days previous to applying for coverage, any earned income from wages from regular employment and that none is anticipated for at least the next one hundred eighty days the insured may waive loss of gross income benefits. 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)  The basic personal injury protection policy shall apply only to the named insured, resident spouse, and resident child. For purposes of this subsection (3), 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.A., sec. 151 (c).

(II)  Any person injured in an accident, other than those persons whose coverage is specifically limited in a basic personal injury protection policy pursuant to subparagraph (I) of this paragraph (f), shall, if expenses incurred by such injured person exceed the limits of such basic personal injury protection policy, 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.

(g)  All persons who qualify for and opt for a basic personal injury protection policy pursuant to this subsection (3) shall be deemed in violation of this part 7 if such persons do not obtain a policy providing legal liability coverage as specified in paragraph (a) of subsection (1) of this section.

(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 fifteen 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.

SECTION 2.  Effective date ­ applicability. This act shall take effect January 1, 1999, and shall apply to policies issued and renewed on or after said date.

SECTION 3.  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.