Bill Summary for Bill Number HB09-1226

Date: 02/18/2009

Final
BILL SUMMARY for HB09-1226

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View-->	Action Taken:
Moved amendment L.001 (Attachment E). The motion Moved amendment L.002 (Attachment F). The motion Moved amendment L.003 (Attachment G). The motion Moved to postpone House Bill 09-1226 indefinitely. Moved to refer House Bill 09-1226, as amended, to	Pass Without Objection Pass Without Objection Pass Without Objection PASS FAIL

01:18 PM -- House Bill 09-1226

Representative McGihon, prime sponsor, presented House Bill 09-1226 concerning creation of the "Colorado No-fault Motor Vehicle Insurance Act". This bill creates the Colorado No-fault Motor Vehicle Insurance Act and repeals the current mandatory motor vehicle insurance coverage statutes. The minimum coverages under no-fault insurance required for all owners and operators of motor vehicles include the following:

legal liability coverage of $25,000 to any one person and $50,000 to all persons in one accident;
property damage coverage of $15,000 per accident;
personal injury protection (PIP) regardless of fault up to $25,000 per person for medical care, up to $20,000 per person for rehabilitation services, and up to $15,000 for payment of lost income and essential services; and
up to $5,000 death benefit.

An owner or operator who fails to carry this mandatory coverage is subject to sanctions and is held personally liable for damages in the case of an accident. Motorcycles, motor scooters, and other similar motorized vehicles are exempted from the mandatory PIP coverage. Insurers may offer policies with coverages more extensive than the required minimums. This legislation adds a new part to the statutes that regulate motor vehicle insurance and conforms existing statutes to include no-fault insurance. It addresses all aspects of the insurance transaction including:

policy issuance and renewal or non-issuance and non-renewal;
use of optional managed care plans for PIP benefits;
insurance rates, disclosures, deductibles and payment plans;
claims filing and handling and penalties for late payments;
unfair or deceptive trade practice to include certain late payment practices;
allowable health care services;
assignment of benefits by an insured to a hospital or health care provider;
coordination of benefits between overlapping insurance coverage;
filings required for the Commissioner of Insurance;
appropriate reimbursement rates;
addressing disputes through binding arbitration and civil action;
rule setting by the commissioner;
self-insurance; and
tort recovery.

Finally, the bill requires that individuals aged 55 years and older who complete a driver's education course, receive a discount on their motor vehicle insurance for 3 years under certain circumstances.

Colorado converted from a no-fault motor vehicle insurance system to a tort system in 2003. Under no-fault, vehicle owners were covered by their own insurance companies for reimbursement for personal injuries sustained in an accident. Under the tort system, a person must prove that the other party involved was at fault in order to receive payment for damages. At-fault drivers without health coverage are responsible for their expenses.

01:19 PM

Representative McGihon talked about her personal experience being involved in an automobile accident where she was injured and that to go through extensive rehabilitation. She said the bill models Florida's law and came out of a study committee. Representative McGihon distributed a couple of charts that compared Colorado's former no-fault law and Florida's no-fault law (Attachment D).

01:27 PM -- Chris Lines, representing the Colorado Department of Regulatory Agencies, testified against the bill as written. He said they are working with the sponsor on some amendments to create a neutral position. Mr. Lines said the department has four technical suggested changes to the bill.

01:29 PM -- Kelly Campbell, representing the Property and Casualty Insurers Association, testified against the bill. She explained that in 2003 no-fault was sunsetted and changed to a tort system because of the high cost of insurance in Colorado. Ms. Campbell talked about the benefits of a tort system. Representative Liston asked how much the $5,000 of mandatory medical payments coverage that was passed last session covers in a typical automobile accident. Ms. Campbell said a typical ambulance ride, if it is that bad of an accident, can cost about $1,000.

01:35 PM -- Darin Schanker, representing the Colorado Trial Lawyer's Association, testified against the bill. He said 80 percent of Coloradoans have health insurance and would be paying for duplicative coverage under a no-fault system. Mr. Schanker said the bill would increase the number of uninsured drivers on the road. After the switch to tort he said auto insurance rates dropped by 35 percent. Mr. Schanker talked about the mandatory medical payments coverage that is now required following the passage of Senate Bill 08-011 and how it will address the concerns that are attempting to be addressed under House Bill 09-1226. Representative Soper asked how fault is determined under the tort system. Mr. Schanker stated that no-fault only applies to the medical payments. When an accident occurs under no-fault, only medical payments are paid regardless of fault. Representative Ryden asked how the role of attorneys has changed since the state changed from no-fault to tort.

01:47 PM -- Robert Ferm, representing the American Insurance Association, testified against the bill. He mentioned that prior to the passage of Senate Bill 08- 011, medical payments coverage was available and is still available for $5,000 and even more.

01:51 PM -- Fran Coleman, representing the Brain Injury Association of Colorado, testified in support of the bill. She said no-fault was sunsetted in 2003 because it could not be reformed. Ms. Coleman said if brain injuries are taken care of earlier, they can recover faster and have a better life. She talked about a committee that met in 2005 that looked at the change from no-fault to tort. Ms. Coleman said premiums stayed the same after the switch.

01:58 PM -- Patti Wells, General Counsel for Denver Water, testified in support of the bill. She explained what it has been like for a public entity under no-fault and tort. Ms. Wells said they never dealt with medical injuries under no-fault because they were paid under PIP coverage. She said under tort, they need to fight over fault and the medical care and whether it is necessary.

02:03 PM -- Ellen Caruso, representing the Colorado Association of Physical Therapists, testified in support of the bill.

02:09 PM

Representative McGihon explained that amendment L.001 allows physical therapists, massage therapists, and acupuncturists to be reimbursed for medical care and rehabilitation services using PIP benefits (Attachment E).


BILL:	HB09-1226
TIME:	02:10:42 PM
MOVED:	Soper
MOTION:	Moved amendment L.001 (Attachment E). The motion passed without objection.
SECONDED:	Liston
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

Representative McGihon explained that amendment L.002 adds ambulance or rescue unit volunteers to the bill where it talks about volunteer firefighters (Attachment F).


BILL:	HB09-1226
TIME:	02:11:14 PM
MOVED:	Soper
MOTION:	Moved amendment L.002 (Attachment F). The motion passed without objection.
SECONDED:	Priola
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

Representative McGihon stated that amendment L.003 provides exclusions for rental cars (Attachment G).


BILL:	HB09-1226
TIME:	02:11:45 PM
MOVED:	Soper
MOTION:	Moved amendment L.003 (Attachment G). The motion passed without objection.
SECONDED:	Casso
		VOTE
	Balmer
	Bradford
	Gagliardi
	Liston
	Priola
	Ryden
	Scanlan
	Soper
	Stephens
	Casso
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

02:19 PM

Representative McGihon gave some closing comments on the bill. She pointed out that not all health insurance policies pay for automobile accidents. Representative McGihon said that when the switch to tort occurred, her premiums did not go down but her coverage did. Representative Ryden asked whether a discussed has been had about adding mandatory auto accident coverage to health insurance policies.


BILL:	HB09-1226
TIME:	02:26:05 PM
MOVED:	Casso
MOTION:	Moved to refer House Bill 09-1226, as amended, to the Committee on Finance. The motion failed 7-3.
SECONDED:	Casso
		VOTE
	Balmer	No
	Bradford	No
	Gagliardi	Excused
	Liston	No
	Priola	No
	Ryden	Yes
	Scanlan	No
	Soper	Yes
	Stephens	No
	Casso	Yes
	Rice	No

Not Final YES: 3 NO: 7 EXC: 1 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1226
TIME:	02:27:25 PM
MOVED:	Balmer
MOTION:	Moved to postpone House Bill 09-1226 indefinitely. The motion passed 7-2.
SECONDED:	Liston
		VOTE
	Balmer	Yes
	Bradford	Yes
	Gagliardi	Excused
	Liston	Yes
	Priola	Yes
	Ryden	No
	Scanlan	Excused
	Soper	No
	Stephens	Yes
	Casso	Yes
	Rice	Yes

Final YES: 7 NO: 2 EXC: 2 ABS: 0 FINAL ACTION: PASS