Last month, Colorado Governor Bill Ritter signed a bill that will permit the Department of Regulatory Agencies and the Division of Insurance (the “Division”) to compel payment to consumers who have been wronged by the unlawful business practices of insurance companies and their agents. House Bill 08-1228 (the “Bill”) holds insurers financially accountable for the unfair business acts of an insurance agent authorized to sell a product or plan of the insurer, if the insurer knew or should have known about the unfair business practice. The Bill allows the Commissioner of Insurance to collect monetary damages, demand repayment of premiums, payments of benefits or that products fulfill expectations when a policy is misrepresented. Under the Bill, after a consumer files a complaint, the Division will investigate the complaint and hold a hearing to consider arguments from both sides. If the Division determines that the insurer or agent knowingly wronged the consumer, the Commissioner of Insurance will demand and collect restitution from the insurer or agent.
The Bill takes effect on August 6, 2008.
