Insurance industry representatives are divided on whether or not Colorado Gov. Bill Ritter should veto legislation concerning protection against uninsured and underinsured motorists.
The National Association of Mutual Insurance Companies has urged the governor to veto the bill, while the Property Casualty Insurers Association and the American Insurance Association have remained neutral.
Christian Rataj, NAMIC's state affairs manager for the western region, said that SB 256 will force consumers to needlessly pay higher rates for insurance coverage they may not need or desire.
"Although SB 256 may seem like a consumer-friendly bill, in reality it will only confuse insurance consumers, increase insurance rates for all insureds and lead to frivolous insurance litigation," he said.
The legislation will require insurance carriers to offer underinsured motorist coverage in an amount equal to the insured's liability coverage.
It would also allow for "stacking" of coverages in certain circumstances and would turn underinsured motorist coverage into excess coverage.
Stacking includes aggregating, combining, multiplying or pyramiding limits of separate policies and is not currently permitted under Colorado law.
For example, if a husband gets into an accident with an underinsured motorist and has a $100,000 limit on such coverage, in states that permit "stacking" he could add the same limit his wife may have on her vehicle.
"It's a fundamental departure from the current [Colorado] uninsured and underinsured motorist coverage law and is unwarranted and unnecessary," Mr. Rataj said.
Kelly Campbell, regional manager for the Property Casualty Insurers Association of America, said her group is remaining neutral on the issue, noting that she worked with the lawmakers to remove some of the objectionable elements.
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