A Bill for an Act
Page 1, Line 101Concerning a model act to provide a framework that allows
Page 1, Line 102insurance companies to give rebates that meet specified
Page 1, Line 103criteria to maintain consumer protections.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill creates the "Model Rebate Reform Act" to modernize the law concerning insurance rebates by recognizing new insurance products while maintaining necessary consumer protections. The bill allows an insurer or insurance producer to give a gift valued under $250 in connection with the marketing, purchase, or retention of an insurance contract and to conduct a free raffle or drawing with prizes valued up to $500.
Additionally, the bill provides that an insurer or insurance producer may give a free or discounted product or service in conjunction with or related to an insurance contract if the product or service:
- Is intended to educate about, assess, monitor, control, mitigate, or protect an individual against loss of life, health, or property; or
- Has a nexus to or enhances the value of the insurance benefits.
Next, the bill provides that an insurer or insurance producer may provide an additional free or discounted service if the service is at least tangentially related to an insurance contract or the administration of an insurance contract, the receipt of the service is not contingent on the purchase of insurance, and the service is offered on the same terms to all potential insurance customers. Before the purchase of insurance, receipt of a quote for insurance, or designation of an agent of record, the insurer or insurance producer providing the service shall disclose in writing to the recipient that receipt of the service is not contingent on the purchase of insurance.
Lastly, the bill permits the commissioner of insurance to adopt rules as necessary to effectuate the provisions of the bill, including adjusting the financial limitations on gifts and prizes as necessary for inflation.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, add part 18 to article 3 of title 10 as follows:
Page 2, Line 3PART 18
MODEL REBATE REFORM ACT
Page 2, Line 410-3-1801. Short title.The short title of this part 18 is the "Model Rebate Reform Act".
Page 2, Line 510-3-1802. Purpose.The purpose of this part 18 is to
Page 2, Line 6modernize insurance rebate provisions to recognize new
Page 2, Line 7products being offered by the insurance industry while
Page 2, Line 8maintaining necessary consumer protections.
10-3-1803. Definition.As used in this part 18:
Page 3, Line 1(1) "Insurance producer" has the meaning set forth in section 10-2-103 (6).
Page 3, Line 210-3-1804. Permissible gifts and prizes. (1) An insurer, by or
Page 3, Line 3through its employee, affiliate, insurance producer, or
Page 3, Line 4third-party representative, or an insurance producer acting on its own behalf, may:
Page 3, Line 5(a) Offer or provide a gift in connection with the
Page 3, Line 6marketing, purchase, or retention of an insurance contract, as
Page 3, Line 7long as the cost of the gift does not exceed two hundred fifty dollars per year per person; and
Page 3, Line 8(b) Conduct a raffle or drawing, as long as there is no
Page 3, Line 9participation cost to entrants and the prizes are not valued in excess of five hundred dollars.
Page 3, Line 10(2) A gift or prize given pursuant to subsection (1) of this section must not be in the form of cash.
Page 3, Line 1110-3-1805. Permissible value-added service or activity. (1) An
Page 3, Line 12insurer, by or through its employee, affiliate, insurance
Page 3, Line 13producer, or third-party representative, or an insurance
Page 3, Line 14producer acting on its own behalf, may offer or provide, for free
Page 3, Line 15or at a discounted price, a product or service that relates to or
Page 3, Line 16is given in conjunction with an insurance policy if the product or service:
Page 3, Line 17(a) Is primarily intended to educate about, assess,
Page 3, Line 18monitor, control, mitigate, or prevent risk of loss of an individual's life, health, or property; or
Page 3, Line 19(b) Has a nexus to or enhances the value of the insurance benefits.
Page 4, Line 1(2) A product or service offered or provided pursuant to
Page 4, Line 2this section is exempt from the limitations set forth in sections 10-3-1804 and 10-3-1104 (1)(g).
Page 4, Line 310-3-1806. Services for free or for less than fair market value.
Page 4, Line 4(1) An insurer, by or through its employee, affiliate, insurance
Page 4, Line 5producer, or third-party representative, or an insurance
Page 4, Line 6producer acting on its own behalf, may offer or provide a
Page 4, Line 7service not otherwise identified under section 10-3-1805 for free or for less than fair market value if:
Page 4, Line 8(a) The service is at least tangentially related to an
Page 4, Line 9insurance contract or the administration of an insurance contract;
Page 4, Line 10(b) Receipt of the service is not contingent upon the purchase of insurance; and
Page 4, Line 11(c) The service is offered on the same terms to all potential insurance customers.
Page 4, Line 12(2) An insurer, by or through its employee, affiliate,
Page 4, Line 13insurance producer, or third-party representative, or an
Page 4, Line 14insurance producer acting on its own behalf, that offers or
Page 4, Line 15provides a service under this section for free or for less than
Page 4, Line 16fair market value shall, before the purchase of insurance,
Page 4, Line 17receipt of a quote for insurance, or designation of an agent of
Page 4, Line 18record, disclose conspicuously in writing to the recipient that
Page 4, Line 19receipt of the service is not contingent on the purchase of insurance.
Page 4, Line 2010-3-1807. Rules.The commissioner may adopt rules as
Page 5, Line 1necessary to effectuate the provisions of this part 18, including
Page 5, Line 2adjusting the financial limitations set forth in section 10-3-1804 (1) as necessary for inflation.
Page 5, Line 3SECTION 2. In Colorado Revised Statutes, 10-3-1104, amend (1)(g) as follows:
Page 5, Line 410-3-1104. Unfair methods of competition - unfair or deceptive
Page 5, Line 5practices. (1) The following are defined as unfair methods of
Page 5, Line 6competition and unfair or deceptive acts or practices in the business of insurance:
Page 5, Line 7(g) Rebates: Except as provided in part 18 of this article 3 or
Page 5, Line 8as otherwise expressly provided by law, knowingly permitting, or
Page 5, Line 9offering to make, or making any contract of insurance or agreement as to
Page 5, Line 10such contract, other than as plainly expressed in the insurance contract
Page 5, Line 11issued thereon, or paying,
orPage 5, Line 12allow, or give, directly or indirectly, as inducement to such insurance or
Page 5, Line 13annuity, any rebate of premiums payable on the contract, or any special
Page 5, Line 14favor or advantage in the dividends or other benefits
thereonPage 5, Line 15contract or annuity, or any valuable consideration or inducement
Page 5, Line 16whatever not specified in the contract; or giving,
orPage 5, Line 17or offering to give, sell, or purchase, as inducement to such insurance
Page 5, Line 18contract or annuity or in connection
therewithPage 5, Line 19contract or annuity, any stocks, bonds, or other securities of any
Page 5, Line 20insurance company or other corporation, association, or partnership, or
Page 5, Line 21any dividends or profits accrued
thereonPage 5, Line 22other securities, or anything of value whatsoever not specified in the contract;
Page 5, Line 23SECTION 3. Act subject to petition - effective date -
Page 6, Line 1applicability. (1) This act takes effect at 12:01 a.m. on the day following
Page 6, Line 2the expiration of the ninety-day period after final adjournment of the
Page 6, Line 3general assembly; except that, if a referendum petition is filed pursuant
Page 6, Line 4to section 1 (3) of article V of the state constitution against this act or an
Page 6, Line 5item, section, or part of this act within such period, then the act, item,
Page 6, Line 6section, or part will not take effect unless approved by the people at the
Page 6, Line 7general election to be held in November 2026 and, in such case, will take
Page 6, Line 8effect on the date of the official declaration of the vote thereon by the governor.
Page 6, Line 9(2) This act applies to conduct occurring on or after the applicable effective date of this act.