Bill

HB 25-1205

Implement Fair Access to Insurance Requirements Plans

2025 Regular Session Introduced by Judy Amabile and 29 co-sponsors

FAIR Plan is not a state entity or insurer; grants immunity to insurers and staff, and limits policyholder remedies to contract breach and good-faith breach with caps on damages.

Governor Signed

WeVote Research Nonpartisan

Bill Summary · HB 25-1205

HB 25-1205 — Implement Fair Access to Insurance Requirements Plans

Status: Governor signed (Apr 17, 2025) | Introduced: Feb 10, 2025

Purpose / Intent

HB 25-1205 clarifies the legal status of Colorado’s Fair Access to Insurance Requirements (FAIR) Plan Association and establishes liability protections and remedies related to the FAIR Plan’s operations. The bill aims to facilitate implementation of FAIR Plans by (1) confirming the association is not a state entity or a traditional insurance company, and (2) limiting and defining the legal causes of action and damages available against the association and its participants.

Key provisions

Legal status (C.R.S. § 10-4-1804 amended)
- Declares the FAIR Plan Association is not a department, unit, agency, political subdivision, or instrumentality of the state.
- States all debts, claims, obligations and liabilities of the association are solely those of the association (not state obligations); association funds are not part of the State General Fund and the State will not provide General Fund appropriations to the association.
- Clarifies the FAIR Plan is not an insurance company or a person engaged in the business of insurance, while listing specified statutory compliance obligations the plan must follow.
- Requires assessments and cost-sharing among member insurers based on each member’s written property / commercial property premiums proportionate to aggregate premiums in the state.
Immunity and remedies (new C.R.S. § 10-4-1810.5)
- Grants immunity to member insurers, the FAIR Plan association, its agents and employees, the board of directors, and the Commissioner of Insurance (and commissioner’s representatives) for actions taken in performance of their powers and duties under Part 18.
- Limits the exclusive causes of action available to a FAIR Plan policyholder against the association to:
- Breach of contract; and
- Breach of the common-law covenant of good faith and fair dealing (requiring proof the association acted unreasonably and knew or recklessly disregarded the unreasonableness).
- Damages for breach of the covenant are limited to compensatory economic and noneconomic losses; punitive damages only if breach accompanied by fraud, malice, or willful and wanton conduct.
- A prevailing policyholder may recover attorney fees and costs; courts must award costs/fees to the association if a claim is found frivolous (per Article 17 of Title 13).
Other (introduced text)
- Adds a provision clarifying the FAIR Plan is not subject to premium tax under Title 10 (appeared in the introduced version).

Who is affected

FAIR Plan policyholders (homeowners, businesses who rely on FAIR Plan coverage)
Member insurers (required members who share expenses and losses)
FAIR Plan board, agents, employees, and the Division of Insurance / Commissioner
Judicial Branch and Department of Regulatory Agencies (minimal additional workload)

Fiscal and administrative impact

Fiscal Note (Legislative Council Staff): minimal impact to state workload and revenue beginning FY 2025‑26.
- Judicial Department: possible minimal increase in civil filings and trial court workload (filing fee revenue subject to TABOR).
- Department of Regulatory Agencies (Division of Insurance): minimal increase in inquiries/complaints manageable within existing appropriations.
No appropriation required.

Effective date and legislative actions

Effective upon signature of the Governor (signed Apr 17, 2025).
Major actions: introduced Feb 10, 2025; passed both chambers with amendments; sent to Governor Apr 8, 2025; Governor signed Apr 17, 2025.