First Regular Session
Sixty-second General Assembly
LLS NO. 99-0362.01 Jerry Barry HOUSE BILL 99-1059
STATE OF COLORADO
BY REPRESENTATIVE Swenson;
also SENATOR Dennis.
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
101 CONCERNING ABUSE OF PROPERTY INSURANCE.
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
Clarifies that business practices that reduce or eliminate the
copayments and deductibles for property insurance or provide rebates or
other things of value to an insured interfere with insurance contracts only
when the cost is passed on to the insurer. Clarifies that the elements of
a civil action for abuse of property insurance are the same as the elements
of the crime.
1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. 18-13-119.5, Colorado Revised Statutes, is
3 amended to read:
4 18-13-119.5. Abuse of property insurance. (1) The general
5 assembly hereby finds, determines, and declares that:
6 (a) (I) Business practices that have the effect of reducing or
7 eliminating REDUCE OR ELIMINATE the need for actual payment of
8 required copayments and deductibles by an insured for property damages
9 interfere with contractual obligations entered into by the insured and
10 insurer relating to such payments WHEN THE COSTS ARISING FROM THE
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
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1 REDUCTION OR ELIMINATION ARE PASSED ON TO AN INSURER; AND
2 (II) Interference described in subparagraph (I) of this paragraph
3 (a) is not in the public interest because it has the effect of increasing
4 insurance costs by removing the incentives that copayments and
5 deductibles create in making the consumer a cost-conscious purchaser;
6 and
7 (b) (I) Business practices that have the effect of providing
8 PROVIDE rebates or something of value to an insured to attract business
9 relating to property damages when the costs of the rebate or thing of
10 value is passed on to an insurer interfere with contractual obligations
11 entered into by the insured and insurer relating to such property damages
12 WHEN THE COSTS OF THE REBATE OR THING OF VALUE ARE PASSED ON TO
13 THE INSURER; AND
14 (II) Interference described in subparagraph (I) of this paragraph
15 (b) is not in the public interest because it has the effect of increasing
16 insurance costs by including items unrelated to the property damage in
17 the costs paid by insurers; and
18 (c) Advertising of practices described in paragraphs (a) and (b) of
19 this subsection (1) may aggravate the impact of such practices.
20 (2) (a) The general assembly further declares that business
21 practices described in subsection (1) of this section are illegal and that
22 such practices or the advertising thereof shall be grounds for disciplinary
23 actions by any governmental body which is responsible for licensing or
24 regulating persons who engage in such practices.
25 (b) The general assembly further declares that this section shall
26 create a private right of action in courts of the state of Colorado, including
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1 an action for injunctive relief.
2 (3) Any person who provides repairs, goods, or services commits
3 abuse of property insurance if such person knowingly:
4 (a) Submits a fee to an insurer which is higher than a fee estimate
5 such person provided to the insured or which is higher than the fee such
6 person has agreed to accept from the insured if the effect is to provide the
7 insured a rebate or something of value to attract the insured to do business
8 with such person and the cost of providing the rebate or thing of value is
9 passed on to the insurer as a part of the higher fee; or
10 (b) Provides a rebate or a gift, cash, or thing of value to an
11 insurance company or its representative, agent, employee, or others acting
12 on behalf of the insurance company, in connection with any claim under
13 an insurance policy which insures for property damage.
14 (4) Any insurance company, or its agent, employee,
15 representative, or other person acting on behalf of the insurance company,
16 commits abuse of property insurance if such company or person
17 knowingly: Accepts a rebate or a gift, cash, or thing of value from any
18 person who provides repairs, goods, or services in connection with any
19 claim under an insurance policy which insures for property damage.
20 (5) Abuse of property insurance is a class 2 misdemeanor.
21 (6) IN ADDITION TO ANY CRIMINAL PENALTIES, ANY PERSON WHO
22 VIOLATES SUBSECTION (3) OR (4) OF THIS SECTION MAY BE:
23 (a) SUBJECT TO DISCIPLINARY ACTION BY ANY GOVERNMENTAL
24 BODY THAT IS RESPONSIBLE FOR LICENSING OR REGULATING THE PERSON;
25 AND
26 (b) LIABLE TO ANY PERSON WHO SUFFERS FINANCIAL INJURY OR
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1 DAMAGE AS A RESULT OF SUCH VIOLATION IN THE AMOUNT OF THE ACTUAL
2 DAMAGES SUSTAINED TOGETHER WITH THE COSTS OF SUIT, INCLUDING
3 REASONABLE ATTORNEY FEES.
4 SECTION 2. Effective date - applicability. (1) This act shall
5 take effect at 12:01 a.m. on the day following the expiration of the
6 ninety-day period after final adjournment of the general assembly that is
7 allowed for submitting a referendum petition pursuant to article V,
8 section 1 (3) of the state constitution; except that, if a referendum petition
9 is filed against this act or an item, section, or part of this act within such
10 period, then the act, item, section, or part, if approved by the people, shall
11 take effect on the date of the official declaration of the vote thereon by
12 proclamation of the governor.
13 (2) The provisions of this act shall apply to offenses committed
14 and causes of action arising on or after the applicable effective date of
15 this act.