Alyssa Lane
Colorado has several laws in place to hold insurance companies accountable and protect consumers from unfair insurance practices. For example, the Unfair Claim Settlement Practices Act [C.R.S. §10-3-1104 (1) (h)] regulates how insurers should treat insured individuals. Colorado law also requires drivers to carry car insurance and imposes fines and other penalties for driving without insurance. Additionally, the state has passed legislation to protect consumers from unfair discrimination in insurance practices, such as Senate Bill (SB) 21-169, which ensures that insurers' use of big data does not unfairly discriminate against consumers based on race, colour, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression.
| Characteristics | Values |
|---|---|
| Senate Bill | SB21-169 |
| Date signed into law | July 6, 2021 |
| Signed by | Governor Polis |
| What it protects against | Unfair discrimination in insurance practices on the basis of race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression |
| What insurance companies must do | Test their big data systems to ensure they are not unfairly discriminating against consumers on the basis of a protected class |
| What insurance companies must do if harm is discovered | Take corrective action |
| What the Division of Insurance must do | Work with stakeholders before adopting rules on how insurance companies should test and demonstrate that their use of big data is not unfairly discriminating |
| What the Division of Insurance has done | Hosted a series of stakeholder meetings |
| Insurance types that are covered | Life, auto, health |
| Insurance practices that are covered | Marketing, underwriting, claims management |
| Insurance claim rights | Money and good claim service, which includes a fair and complete investigation and estimation of loss, and help with paperwork |
| Insurance claim rights | Insurers must pay what is owed without delay and not hold back any benefits while another part is uncertain or under investigation |
| Insurance claim rights | Insurers must provide a prompt explanation for how the claim is being decided based on policy language, applicable law, or unique facts of the claim |
| Insurance claim rights | Insured individuals have the right to be kept informed about the progress of their claim |
| Minimum car insurance requirements | Liability coverage |
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What You'll Learn
Senate Bill 21-169
SB21-169 prohibits insurers from unfairly discriminating against consumers based on race, colour, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression. The bill also requires insurers to demonstrate to the Division of Insurance (DOI) how they are testing their data and tools to ensure they do not result in such discrimination. Insurers must take corrective action to address any consumer harms that are discovered.
The legislation directs the Insurance Commissioner to work with stakeholders, including insurance companies, agents/producers, consumer representatives, and other interested parties, before adopting rules on how companies should test and demonstrate that their use of big data is not unfairly discriminatory. Separate stakeholder meetings are held to address specific types of insurance (e.g. life, auto, health) and practices (e.g. marketing, underwriting, claims management).
The DOI has hosted a series of stakeholder meetings regarding SB21-169 and unfair discrimination in insurance practices related to health insurance and private passenger auto insurance underwriting. The DOI has also issued a data call to the top ten private passenger auto insurers, with past meeting materials, including recordings, available online.
SB21-169 sets an important precedent for the responsible use of algorithms and predictive models in the insurance industry. It requires careful change management and strategic planning for adherence, with several additional regulations yet to be introduced.
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![Highlights of Colorado State Insurance Laws [Annotated]](https://m.media-amazon.com/images/I/61hVwibBChL._AC_UY218_.jpg)
Unfair discrimination
In July 2021, Colorado introduced Senate Bill 21-169 (SB21-169) to prevent unfair discrimination in insurance practices. The bill protects Colorado consumers from insurance practices that result in unfair discrimination based on race, colour, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression.
The legislation holds insurers accountable for testing their big data systems, including external consumer data and information sources, algorithms, and predictive models, to ensure they are not unfairly discriminating against consumers on the basis of a protected class. Insurers are required to take corrective action to address any consumer harms that are discovered.
The Insurance Commissioner is directed to work with stakeholders, including insurance companies, insurance agents/producers, consumer representatives, and other interested parties, before adopting rules on how companies should test and demonstrate that their use of big data is not unfairly discriminating. Separate stakeholder meetings are held to address specific types of insurance, such as life, auto, and health insurance, as well as specific insurance practices like marketing, underwriting, and claims management.
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Insurance practices
Senate Bill 21-169 (SB21-169), signed into law by Governor Polis on July 6, 2021, protects Colorado consumers from unfair discrimination in insurance practices. The law holds insurers accountable for testing their big data systems, including algorithms and predictive models, to ensure they are not unfairly discriminating against consumers based on race, colour, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression.
SB21-169 requires insurers to take corrective action if any consumer harms are discovered. Insurers must work with stakeholders, including insurance companies and consumer representatives, before adopting rules on how they should test and demonstrate that their use of big data does not unfairly discriminate against consumers. The Colorado Division of Insurance maintains the current insurance regulations and information concerning rule-making on its website.
In terms of insurance practices, Colorado requires all motorists to carry car insurance and keep proof of coverage with them at all times while driving. Colorado law requires only liability coverage, which pays for bodily injuries and property damage caused by the policyholder in an at-fault accident. This coverage also includes the injured party's pain and suffering and lost wages. Uninsured driving is taken very seriously in Colorado and can result in severe penalties.
Colorado is one of 15 states that offer compensation for diminution in value, which allows policyholders to recoup losses when selling a car that has been in an accident, even if it has been fully repaired. To file a diminished value claim, certain requirements must be met, including providing documentation such as photos, repair records, and proof of vehicle value.
Colorado also has laws in place to protect consumers from unfair insurance practices. For example, the Unfair Claim Settlement Practices Act regulates how insurers should treat insured individuals. Insurers must provide a prompt explanation for how a claim is being decided and keep the insured individual informed throughout the process. Insurers are also prohibited from lowballing, which is when an insurer attempts to settle a claim for less than its full value by reducing the scope or price of repairs.
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Consumer rights
Senate Bill (SB) 21-169, signed into law by Governor Polis on July 6, 2021, protects Colorado consumers from unfair discrimination in insurance practices. The law holds insurers accountable for testing their big data systems, including external consumer data sources, algorithms, and predictive models, to ensure they do not discriminate against consumers on the basis of race, colour, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression.
The Insurance Commissioner is directed to work with stakeholders, including insurance companies, agents, consumers, and other interested parties, before adopting rules on how companies should test and demonstrate that their use of big data is not discriminatory. The Commissioner may examine and investigate an insurer's use of external data sources, and insurers must provide information on their use of such data in developing algorithms and predictive models.
Colorado consumers have certain rights when dealing with insurance companies. For example, under the Unfair Claim Settlement Practices Act, insurers must provide a prompt explanation for how a claim is being decided and keep the insured informed about the claim's progress after conducting an unbiased investigation. Insurers who deny or delay payment of covered benefits without a reasonable basis may face penalties, including paying twice the amount of the covered benefit, plus attorney's fees and costs. Consumers have the right to file a complaint and/or seek professional help.
In the event of a dispute, consumers can request an administrative hearing within 60 days, and no fees may be imposed on them for such hearings. If an insurer is found to have breached the terms of a policy, the commissioner may award treble damages and attorney fees to the insured.
Colorado consumers also have rights regarding their insurance policies. They are entitled to receive a complete copy of their policy within three days of requesting it and must be provided with good claim service, including a fair and complete investigation and estimation of any losses. Consumers should understand their policies thoroughly to ensure they receive the full benefits they are entitled to.
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Car insurance requirements
Colorado state law requires that automobile owners carry liability insurance. This covers bodily injury to another person or property damage to another person's vehicle or property when the insured person is at fault for an accident. The minimum coverage required by the state is $25,000 for bodily injury or death to any one person in an accident, and $50,000 for bodily injury or death to all persons in any one accident. However, higher coverage can be purchased. For example, the minimum Colorado auto insurance coverage is also quoted as $25,000/$50,000/$15,000, with the additional $15,000 covering property damage.
There are two types of liability coverage available and required by law in Colorado: property damage and bodily injury. Property damage coverage safeguards your assets if you are found legally accountable for a covered accident, including property damage sustained by the other party. Bodily injury coverage safeguards your assets if you are found legally accountable for a covered accident, including certain expenses associated with bodily harm sustained by the other party. Liability coverage also provides for your legal defence if a lawsuit is brought against you as a result of a covered accident.
In Colorado, you must purchase insurance coverage before you can register your vehicle. If you are uninsured and involved in an accident, you will have to pay out-of-pocket for damages. Depending on the severity of the accident, these costs can be very high, and you could even be sued for bodily injury or property damage. Driving uninsured will also make you a high-risk driver, which will increase your premium.
Colorado also has laws in place to protect consumers from unfair discrimination in insurance practices. Senate Bill (SB) 21-169, signed into law in 2021, protects Colorado consumers from insurance practices that result in unfair discrimination on the basis of race, colour, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression. This legislation holds insurers accountable for testing their big data systems to ensure they are not unfairly discriminating against consumers on the basis of a protected class.
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Frequently asked questions
SB21-169 is a Colorado law that protects consumers from unfair discrimination in insurance practices. It holds insurers accountable for testing their big data systems to ensure they are not unfairly discriminating against consumers on the basis of race, colour, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression.
The purpose of SB21-169 is to protect consumers from unfair discrimination by insurance companies and to ensure that insurers are using big data responsibly.
Driving without insurance in Colorado is illegal and can result in fines, license suspension, community service, vehicle impoundment, and other penalties.
Insurance consumers in Colorado have the right to receive money and good claim service from their insurance company. They also have the right to be treated fairly and without discrimination, to receive prompt and unbiased explanations for how their claims are being decided, and to be kept informed about the progress of their claims.
The Health Insurance Portability and Accountability Act (HIPAA) establishes a level of security for Protected Health Information (PHI) and requires unique identification of healthcare providers to reduce administrative burden.
