Insurance - Digest of Bills

Digest of Bills - 2000

INSURANCE
S.B. 00-35 Investment decisions and plans - fiduciary oversight required by board of directors. Requires that a domestic insurance company's investments, loans, and sales be transacted in compliance with a written policy or plan approved by its board of directors prior to the transaction. Requires such transactions to be ratified at least quarterly by the insurance company's board of directors or a committee appointed by such board.

APPROVED by Governor April 18, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

S.B. 00-95 Health insurance - coverage - eye care. Specifies that health coverage plans and managed care plans issued or renewed after January 1, 2001, that provide coverage of eye care services must: Provide covered persons with direct access to eye care providers; not impose penalties on primary care providers as a result of such direct access; ensure that all eye care providers on a health coverage plan or managed care plan are included on any publicly accessible list of participating providers; allow each eye care provider on a health coverage plan or managed care plan panel to furnish covered eye care services to covered persons without discrimination between classes of eye care providers and to provide such services as permitted by their license; not impose a deductible or coinsurance for eye care services that is greater than the deductible or coinsurance imposed for other medical services under the health coverage plan or managed care plan; and not require an eye care provider to hold hospital privileges as a condition of participation as a provider under the health coverage plan or managed care plan.

APPROVED by Governor March 27, 2000
EFFECTIVE March 27, 2000

S.B. 00-106 Casualty and property line insurance - deregulation. Declares that open competition is beneficial to the consumer as well as the insurance industry. Declares that insurers would be able to meet market demands in a more timely manner if prior approval for credit forms and rates and preneed funeral forms was eliminated.

Adds certifying, issuing, soliciting, or using a credit insurance policy form, certificate of insurance, notice of proposed insurance, application for insurance, endorsement, or rider that does not comply with Colorado law as an unfair method of competition and unfair and deceptive trade practice. Adds certifying, issuing, soliciting, or using a preneed funeral contract that does not comply with Colorado law as an unfair method of competition and a deceptive trade practice.

Removes medical malpractice insurance by a joint underwriting association from the definition of type I insurance. Adds medical malpractice by a joint underwriting association, credit, and workers' compensation and employer's liability incidental thereto and written in connection therewith for rates filed by insurers to the definition of a type II insurance.

Eliminates the existing requirement for prior approval by the commissioner of insurance (the commissioner) for private passenger auto cost containment forms, claims-made policy forms, credit forms and rates, and preneed funeral forms.

Requires credit insurers to submit an annual report to the commissioner listing existing and new policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders issued or delivered in this state. Requires such annual report to contain a certificate by an officer of the organization that the form complies with Colorado law. Gives the commissioner the ability to examine and investigate credit insurance policy forms to ensure compliance.

Requires every title insurance company to have on file in its principal office or a title insurance agent's principal office a schedule of rates, fees, and every amendment thereto, a statement of compliance executed by an officer of the title company that such rate and fee comply with Colorado law, and all supporting documentation. Requires every title insurance company and agent to file with the commissioner any new or amended rate or fee. Limits the use of new or amended rates or fees until such filing.

Requires a contract seller of preneed contracts to submit an annual report that lists any form of preneed contract and each form of assignment used or to be used by the contract seller. Requires the annual report to include a certification from a corporate officer that the forms comply with Colorado law. Allows the commissioner to examine or investigate forms used by preneed sellers.

For workers' compensation insurance, eliminates the requirement that classification of risks, any premiums related thereto, and any subsequent classifications of risks and premiums be approved by the commissioner prior to use.

APPROVED by Governor April 24, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

S.B. 00-130 Credit life insurance - transaction of more than ten years duration - elimination. Eliminates the requirement that a loan or credit transaction be of more than 10-years duration in order to be subject to the "Credit Insurance Act".

APPROVED by Governor March 17, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

S.B. 00-138 Automobile insurance - PIP benefits - managed care arrangements - rights of appeal. Requires an automobile insurer providing mandatory coverages to file with the commissioner of insurance an internal grievance and review procedure to be used for managed care arrangements that relate to personal injury protection coverage. Allows an insured to seek an independent medical examination with the Colorado PIP IME panel after the insured has exhausted all internal grievance procedures. Requires the insurer to notify the insured of the insured's right to an independent medical examination under such circumstances. Allows the internal grievance procedures to be modeled after one of the nationally recognized accreditation standards organizations.

APPROVED by Governor March 31, 2000
EFFECTIVE July 1, 2000

S.B. 00-148 Health insurance - carrier contracts with providers of health care services. Finds and declares that health care providers should not be encumbered by contract clauses with an insurer that restrict the health care providers' freedom to offer their services as needed in the marketplace or otherwise limit their ability to provide medically necessary treatment.

Prohibits contracts between providers and carriers to financially penalize a provider for the number of referrals made to providers who participate within the carrier's plan for covered benefits so long as the provider adheres to the carrier's or the carrier's intermediary's utilization review polices and procedures.

APPROVED by Governor May 26, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

S.B. 00-202 Interinsurance exchange - attorney-in-fact - tax paid. Includes an attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange in the definition of "company", "corporation", "insurance company", or "insurance corporation" for purposes of insurance law.

Clarifies that an attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange shall pay a tax on the gross amount of all premiums collected or contracted for on policies or contracts of insurance covering property or risks in this state during the previous calendar year.

Conforms the insurance premium tax provisions for interinsurance exchanges to those for all other insurers by repealing the requirement for an attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or interinsurance exchange to pay to the division of insurance an annual tax of 2¼% of the net premiums or deposits for the preceding calendar year.

APPROVED by Governor June 1, 2000
EFFECTIVE June 1, 2000

H.B. 00-1037 Catastrophic health insurance coverage - purchase by individuals - deductibles - requirements. Allows a catastrophic health insurance policy to be issued to an individual under certain circumstances.

Changes the minimum and maximum deductibles allowed for a catastrophic health insurance policy to at least $1,500 but no more than $2,250 for individual coverage and at least $3,000 but no more than $4,500 for family coverage.

Includes the minimum and maximum deductibles in the definition of "qualified higher deductible health plan" for purposes of medical savings accounts.

Eliminates the requirement that an employee must have continuous coverage for one year or more with a gap in coverage of no more than 90 days under another health insurance policy to be covered under group coverage. Permits the insured to choose, without evidence of insurability, group conversion benefits.

APPROVED by Governor March 17, 2000
EFFECTIVE January 1, 2001

H.B. 00-1093 Insolvency coverage. Adds definitions of an owner of a policy or contract for insurance, a structured settlement annuity, and an unallocated annuity contract to the laws governing the life and health insurance protection association (the association). Clarifies the definition of a resident to include a resident who is owed a contractual obligation on the date of the insurer's insolvency. Includes United States citizens living in a foreign country or a United States possession, territory, or protectorate as residents.

Expands the circumstances in which insolvency coverage is available for payees of structured settlement annuities. Allows for denial of insolvency coverage to an owner, payee, beneficiary, or assignee if another state would provide insolvency coverage.

Clarifies the circumstances in which insurance insolvency coverage is not provided, including for unallocated annuity contracts and noncitizens of the United States. Clarifies the date to be used for interest or other value changes. Limits the per-individual benefit liability of the association for health insurance contracts to:

$100,000 for health and life insurance policies not including basic hospitalization, major medical, disability, or medical and surgical insurance;
$300,000 for disability insurance;
$500,000 for basic hospitalization, major medical, or medical and surgical coverage; and
$100,000 to a payee of a structured settlement annuity.

Increases the total amount of liability for the association, except for basic hospitalization, major medical, or medical and surgical coverage, from $300,000 to $500,000 per individual.

Enables the commissioner of insurance (the commissioner) to request information on contractual obligations of any insurer that is a member of the association (a member). Provides standing for the association to intervene in any Colorado court or agency in which a member may be a party. Allows the association to request information to determine the extent of its obligation. Allows the association to take necessary action to fulfill its obligations and exercise its authority. Limits the benefits available from the association to the obligations under the life and health insurance protection association laws. Establishes the venue for litigation filed against the association in the city and county of Denver. Eliminates the current requirement for filing of an appeal bond for the association. Allows the association to issue substitute coverage that is substantially similar to original coverage prior to insolvency.

Requires the board of the association (the board) to report and make recommendations on matters of insolvency upon request of the commissioner. Requires the board to notify the commissioner when the board has actual knowledge that a member may be insolvent. Removes the requirement of a majority vote for actions taken by the board concerning insolvency.

Allows the board to use discretion when:

Recommending to the commissioner that insolvency or liquidation proceedings occur for a member; and
Preparing a report for the commissioner following the insolvency of a member.

Extends the offset of premium tax liability for a member to 5 years. Increases the amount of the offset to $4 million.

APPROVED by Governor May 26, 2000
EFFECTIVE July 1, 2000

H.B. 00-1149 Motor vehicles - required coverages - basic personal injury protection examination program - qualifications. Specifies that the income limit for eligibility for the basic personal injury protection program is based, at a minimum, on the nonfarm income poverty guideline for a family of 4 as set by the federal department of health and human services. Requires the adjustment for family size to be an upward adjustment.

APPROVED by Governor May 12, 2000
EFFECTIVE May 12, 2000

H.B. 00-1292 Insurance - credit insurance - term. For purposes of credit insurance, defines the term "truncated coverage" to mean credit insurance providing coverage for any period shorter than the term of the indebtedness. Requires the creditor to disclose to the debtor the term of the credit insurance coverage whenever truncated coverage is elected and that the indebtedness coverage will terminate before the maturity date of the indebtedness.

H.B. 00-1298 Motor vehicles - seasonal use. Requires automobile insurance companies to provide a policy that covers a motor vehicle that, in accordance with a written statement of nonuse filed by the insured with the department of revenue or its authorized agents, is not operated by any person during a stated time period. Allows such vehicles to be registered if, at the time of registration, the owner has insurance coverage on the vehicle and submits to the department a written statement of nonuse.

APPROVED by Governor June 1, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

H.B. 00-1456 Third party beneficiaries - additional insured by endorsement - notice requirements. Requires insurers to notify third parties who are additional insured by endorsement of the status of their claim within a reasonable period of time as determined by the commissioner of insurance. Requires such notice to contain a statement confirming or denying coverage of the claim unless coverage has not been determined. Requires such notice to contain the reasons for denying coverage of the claim if coverage is denied. Permits an insurer to send a reservation of rights letter instead of such notice when coverage has not been determined.

Subjects the insurer to discipline by the division of insurance if the insurer fails to properly notify such third party. Exempts from the provisions of the act claims upon which a lawsuit has been filed.

H.B. 00-1465 Domestic insurance companies - financial management. Specifically allows domestic insurance companies to grant, purchase, or dispose of group annuities, unallocated annuities, guaranteed investment contracts, and funding agreements when the domestic insurer has the required capital or guaranty fund and surplus and the insurance and reinsurance is authorized by the domestic insurer's articles of incorporation.

Allows domestic insurers to invest in interest bearing bonds issued by a foreign country up to 20% of the domestic insurers' admitted assets; except that either the aggregate amount in a single jurisdiction shall not exceed 10% of the insurer's admitted assets in a foreign jurisdiction with a rating of one by the securities division of the national association of insurance commissioners within the current purpose and procedures manual or 3% of the insurer's admitted assets as to any other foreign jurisdiction.

Defines domestic and foreign obligation.

Limits the percentage of ownership a domestic insurer may acquire in foreign obligations according to the grade of the obligation being purchased.

Amends the definition of "money market". Requires that domestic insurers invest in money market funds that are eligible for listing or are listed in the national association of insurance commissioners' purposes and procedures manual related to securities valuation for the following categories:

U.S. direct obligation exempt list;
U.S. direct obligation/full faith and credit exempt list; or
Class 1 list.

Changes the priority of distribution for class 2 investments related to policies issued on or after August 15, 2000.

APPROVED by Governor June 1, 2000
EFFECTIVE August 15, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

H.B. 00-1466 Property and casualty insurance - arson - fraudulent claims. Incorporates the existing definition of a fraudulent insurance act into the "Fraudulent Claims and Arson Information Reporting Act".

Immunizes a person for providing information in good faith in connection with an investigation or prosecution of insurance fraud. Allows sharing of information among insurers and authorized agencies for the purpose of detecting and preventing insurance fraud. Specifically allows insurers to compare notes on an insured person or applicant for insurance coverage, upon written request and subject to the immunity provisions.

APPROVED by Governor June 1, 2000
EFFECTIVE June 1, 2000

H.B. 00-1478 Health insurance - mandated provision - prosthetic devices. Directs that any health benefit plan, except for supplemental policies covering a specific disease or other limited benefit, that provides coverage for hospital, surgical, or medical expense insurance provide coverage for prosthetic devices in accord with medicare standards of coverage. Defines prosthetic device. Requires prior authorization for prosthetic devices. Requires that the most appropriate prosthetic device be used to meet the medical needs of the insured as determined by the treating physician. Requires the prosthetic device be obtained through a vendor or provider with whom the insurer contracts or is designated by the carrier to the extent the prosthetic coverage shall be comparable to other that a carrier provides in-network and out-of-network services.

APPROVED by Governor June 1, 2000
EFFECTIVE January 1, 2001
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.