No-Fault Reform to Be Goal in 2003 Colo. Legislature

The National Association of Independent Insurers (NAII) is
spearheading efforts to substantially repair Colorado’s reportedly badly broken no-fault auto insurance law during the 2003 legislative session.

In 2002, premium hikes averaged as much as 20% – more than double the national average. Colorado drivers pay the 11th highest auto rates in the country, about $882 for a year’s worth of full auto insurance coverage. Failure to enact major reform may reportedly result in scrapping the current system and returning to a tort system in the state.

“With the re-election of Gov. Bill Owens, who strongly supports no-fault reform, and the switch to a Republican majority in the Senate, the chances of making a serious run at overhauling the no-fault system are greatly improved,” Michael Harrold, NAII director of government relations, said. “For the past two years, the Colorado trial bar’s influence in the Democratic-controlled Senate has made genuine reform a non-starter.”

At the urging of the governor, an auto insurance working group has been meeting since the summer under the leadership of NAII local counsel Bill Imig. It reportedly has made substantial progress in agreeing to far reaching changes to reduce costs while at the same time improving medical care for consumers. Besides property/casualty insurers, the working group includes
representatives of the health insurance, medical and business communities.

The working group is proposing that protocols be established to guide
physicians in treating accident victims and to have auto coverage be directed toward providers who are qualified to treat victims. It is also proposing to impose controls on the use of costly alternative treatments not covered in standard health insurance policies, such as herbal/massage therapy, faith healing, hot tubs, health club memberships and the like. Finally, it wants to limit the use of the courts to persons who have serious injuries.

Another subject the Legislature will consider, Harrold said, is to extend the life of the Insurance Department, which now is in “wind down” mode and will cease functioning July 1, 2003. A bill to extend its sunset date of July 1, 2002, died in the closing hours of the 2002 session. NAII supports the department’s extension.

Other anticipated legislative issues include:

· Tort reform – Specific continued and increasing problem areas include construction defects and medical malpractice liability insurance.

· Restitution – A bill to correct court decisions that go around the civil process and award damages on top of settlement awards was unsuccessful this year. Harrold said a more tightly worded bill should have a better chance of passage in 2003.

· Auto Theft Authority – The proposed authority would be funded by a one-dollar per vehicle fee on insurers to help finance law enforcement and other programs dealing with auto thefts, similar to programs in Texas and other states.

· Drunk Drivers – NAII will support a proposal to remove driving privileges from those who drive with a blood alcohol level of .08% or higher.

Topics Auto Colorado