House committee advances bill to let insurers offer free or reduced-cost value-added services

The House Business Affairs and Labor Committee advanced Senate Bill 58, which would allow insurers and producers to offer customers certain free or reduced-cost value-added products and services tied to an insurance policy, by a 13-0 roll call vote. The committee adopted an amendment that removed raffle-style incentives before forwarding the bill to the Committee of the Whole with a favorable recommendation.

Proponents told the committee the change would modernize Colorado’s unfair trade practices framework and allow insurers to supply loss-mitigation devices — such as water-shutoff devices, electrical-fault detectors or home security systems — that can reduce claims and benefit consumers. "Senate Bill 58 would update Colorado's unfair trade practices act to allow insurers and producers to provide con customers with certain value added products and services that are not specified in the policy while affording appropriate consumer protection," said Melissa Young, regional vice president for the American Council of Life Insurers.

Dan Jiblan, representing the Rocky Mountain Insurance Association, said the devices are a "win-win" for companies and customers and cited common examples: "Some of the things that are given to help the insureds are like the ring doorbells... water regulation things that you put on your washing machine's hose" and security systems such as ADT.

Division of Insurance staff told the committee the bill includes protections against discriminatory offering of services and gives the division authority to investigate complaints. "The bill adds some protections around discriminatory behavior," said Jill Mullen of the Division of Insurance. "If for some reason we do get a complaint ... the division could come in and we could do an investigation."

Committee members adopted an amendment during the session that sponsors described as removing raffle-like incentives from the bill. Representative Ryden, a bill sponsor, said the amendment "basically strips out" that language and the committee then approved the amendment without objection.

After closing witness testimony and debate, Representative Ryden moved Senate Bill 58 to the Committee of the Whole with a favorable recommendation, as amended; the motion was seconded. A roll call produced 13 yes votes, zero no votes and the chair announced the bill passed out of the committee 13-0.

The bill’s proponents said the measure is modeled on recent national updates to unfair trade practice guidance adopted by the National Association of Insurance Commissioners and that the Division of Insurance will exercise oversight to prevent discriminatory practices. Next step: the bill will be considered by the Committee of the Whole.