Colorado Committee Blocks Unfair-Practices Bill
By Sean P. Carr
A. M. Best
April 14, 2009
Colorado legislators voted down a measure that would have barred insurance companies from offering bonuses and incentives to adjusters and other employees for denying claims.
The state House Health and Human Services Committee voted to indefinitely postpone S.B. 103, effectively killing it for the current legislative session. The bill previously had passed the state Senate.
Kelly Campbell, regional manager for the Property Casualty Insurers Association of America, said current state laws already prevent such unfair claims practices. The state insurance commissioner can fine companies for "unscrupulous and unethical" practices, she said.
"S.B. 103 was just an unnecessary bill conceived to advance trial bar interests," Campbell said. "Insurance carriers do not financially reward their employees for denying claims."
A provision in the legislation would have provided incentives for attorneys to pursue "frivolous" litigation and investigate insurance employee records while making it more difficult for companies to investigate false claims, Campbell said.
Attempts to reach the Colorado Trial Lawyers Association, which backed the legislation, were not immediately successful.
The top five writers of homeowners multiperil in Colorado, according to 2007 A.M. Best Co. state/line product information based on direct written premium, were: State Farm Group, with a 23.8% market share; Farmers Insurance Group, with 15.2%; American Family Insurance Group, with 12.4%; Allstate Insurance Group, 10.3%; and USAA Group, with 7%.
The top five writers of private passenger auto in Colorado, according to 2007 A.M. Best Co. state/line product information, based on direct premiums written, were: State Farm Group, with a 20.3% market share; Farmers Insurance Group, with 14.2%; American Family Insurance Group, with 10.3%; Allstate Insurance Group, with 9.1%; and Progressive Insurance Group, with 7.5%.
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