Another session of the Colorado General Assembly has come and gone. While we had some insurance bills of interest, there were a number of business related bills that required our attention. I am going to cover our key bills for this session first and then touch on some others of interest. As your read through this report remember the old adage, “Elections have consequences.”
Disclosure of insurance liability coverage. Those of you, who are just now aware of this bill and have concerns, may be reacting to the original version. The introduced version of this bill was poorly worded. It appeared that the requirement to disclose policy information would apply to all liability claims. The bill was amended to make it clear that disclosure only applies to commercial and personal auto policies.
The original provisions in the bill requiring disclosure were applicable not only to insurance carriers but also to insurance agents. This feature was amended out of the bill and the final version only applies to insurance carriers. Our lobbyists did some heavy lifting on our behalf to get agents removed from the bill requirements.
PIIAC maintained a monitor position on this bill. It was signed by the governor on 5/22/19 and takes effect 1/1/20.
Consumer Protection Act. The bill makes changes to the Colorado Consumer Protection Act (CCPA) related to unfair or deceptive trade practices. As with HB19-1283, the original version was poorly drafted and needed some amendments. This bill was proposed by the Attorney General so some version of the bill was going to pass.
The bill adds the term “recklessly” to the unfair or deceptive trade practices section of the CCPA. Previously a person only had to “knowingly” engage in the listed activities that constitute an unfair or deceptive trade practice. The problem with the original bill language was that the term “recklessly” was not defined. The final version now includes a definition of “recklessly” to mean “…reckless disregard for the truth or falsity of a statement or advertisement.”
Another problem with the original bill language was related to the existing CCPA requirement that there be proof that a deceptive trade practice had a significant public impact. The bill removed this requirement entirely, which would have increased the number of private right of actions. The final version only removes this requirement for actions by the attorney general or a district attorney.
The introduced version of this bill added some additional activities that could be considered a deceptive trade practice. However, the original language in one of the additional activities was so vague that someone who is confused by an insurance proposal could have alleged a deceptive trade practice. In the final version this was cleaned up with language as follows: “Either knowingly or recklessly engages in any unfair, unconscionable, deceptive, deliberately misleading, false, or fraudulent act or practice.” I am not sure this is much better but it is a vast improvement over the original version of the bill.
The introduced version of the bill inserted a whole section into the CCPA with definitions, one of which was entitled “Standard Form Contract”. This definition could have been interpreted to include insurance policies. This whole section was amended out of the final version of the bill.
PIIAC maintained an oppose position on this bill. The bill was signed by the governor on 5/23/19. Sections 2 (deceptive practices) and 3 (civil penalties) of the act apply to civil actions filed on or after the effective date of the act; Section 4 (damages) applies to judgments entered into, on, or after the effective date of the act.
FAMLI Family Medical Leave Insurance Program. The original version of the bill was opposed by the business community. The business community does not oppose family medical leave; rather, it is the method in which family leave is to be achieved that is the problem.
The final version sets up a task force to review results of a third party study and recommendations for a medical leave plan. The task force will develop recommendations on plan features such as minimum duration of leave; purposes of leave; eligibility; amount of wage replacement; and, other pertinent features.
These recommendations will be provided to an independent actuary. The actuary will provide analysis to the task force and the task force shall develop a final recommendation for a paid medical leave plan for all employees in the state.
This actuarial analysis and final recommendation will be reported to the following by 1/8/20: The senate committees on finance and business, labor and technology; the house committees on finance and business affairs and labor; and the governor. In order for the paid family and medical leave plan to go into effect, the general assembly must pass a bill directing implementation of the program.
If a program is directed to be implemented, it will follow a timeline specified in the bill. This timeline is: 7/1/20 the family and medical leave program will be established; 1/1/23 program funding will begin; and 1/1/24 the program will start paying benefits.
Family and medical plan features that were part of the introduced version of the bill are not part of the final version. Also there are no premium specifications, which were part of the introduced version and were considered actuarially unsound according to a study prepared for the business community.
The bill has yet to be signed by the governor. The governor has until June 3, 2019 to sign, veto, or let the bill become law without his signature.
PIIAC has maintained an oppose position on this bill not because PIIAC opposes family and medical leave for employees; it is the details of the original plan that raised concerns on the part of PIIAC members. We will await the task force report and then determine a position on an implementation bill, which if the task force meets its deadlines, should be during the 2020 session.
Equal pay for equal work act. The title says what this bill is about—it is no longer permissible to discriminate in pay based upon gender. There are exceptions in the bill in which seniority, merit and other factors can be taken into consideration in determining wage rate. Of note it is no longer permissible to inquire of a prospective employee their past salary history.
The bill includes private right of action although nothing in the bill prevents an employee from taking their complaint to the Colorado Civil Rights Division (CCRD). Employers who violate the provisions of this bill are liable for economic damages which is the difference between the amount the employer paid to the complaining employee and the amount the employee would have received had there been no violation. In addition liquidated damages in the amount equal to the employee’s economic damages must be paid. The court may not award liquidated damages if the employer demonstrates that the violation was in good faith and the employer has reasonable grounds for believing that there was no violation of the statute.
Part 2 of the bill is a section on the posting of opportunities for promotion and advancement. An employer must make efforts to announce or post all opportunities for promotion to all current employees on the same calendar day and prior to making a decision on the promotion. Employers must keep records of job descriptions and wage history for each employee for the duration of employment and 2 years after the end of employment. Lack of records could result in the court finding a rebuttable presumption that records not kept are favorable to an employee’s claim and instruction to a jury that the failure to keep records can be considered that the violation was not in good faith.
PIIAC had a monitor position on this bill. The governor signed the bill on 5/22/19 and it is effective 1/1/20.
Adjust damage limitations for inflation. The bill adds to current statute that damages in civil liability must be adjusted for inflation on 1/1/20 and each January 1 every two years thereafter. The same adjustment applies to non-economic loss. The adjusted limitation applicable on 1/1/20 and every two years thereafter is applicable to all claims for relief that accrue on and after the specified January 1 and before the January 1 two years thereafter. These same adjustments apply to dollar limitations already in statute.
PIIAC had a monitor position on this bill. It is noteworthy that the insurance and business communities did not provide much opposition to this bill. The bill was signed by the governor on 4/8/19 and is effective 8/2/19 (ninety days after adjournment).
Peer to peer vehicle sharing, has been sent to the governor. The insurance industry concerns about language regarding cancellation and non-renewal of a policy covering a vehicle used in a car sharing program were alleviated when the language was amended out of the bill. PIIAC was neutral on this bill and it is currently awaiting the governor’s signature. Should the governor sign the bill it will be effective 1/1/20.
Limits on job applicant criminal history inquiries. This is the “ban the box” bill. It will no longer be possible to have a question on employment applications regarding past criminal history. Nor can employers ask about criminal history during the initial employment interview. Employers will be able to run a criminal background check at any time during the employment process. PIIAC had a monitor position on this bill. The bill is awaiting the governor’s signature. Should the bill become law it is effective 8/2/19.
Your Government Affairs team followed many other bills during this session. If there is another bill of interest on which you would like some comment please send me an email, firstname.lastname@example.org.
Lastly I would like to thank our lobbyists, Daniel Furman of Hall & Evans and Jennifer Cassell of Bowditch & Cassell for all their work during this session. Bill hearings went late into the evening requiring many hours of work to effectively represent PIIAC at the Colorado General Assembly. PIIAC is very fortunate to have these dedicated people working on your behalf during the legislative session.
This article was published in the June 2019 edition of Colorado Insurance News (COIN). To view more articles and read the whole COIN, click here.