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SB 25-058

Insurance Rebate Reform Model Act

2025 Regular Session Introduced by Jennifer Bacon and 11 co-sponsors

The bill allows insurers to offer certain rebates, gifts, and value-added services under clear limits and disclosures, expanding promotional options while preserving protections.

Governor Signed
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Bill Summary · SB 25-058

SB 25-058 — Insurance Rebate Reform Model Act

Status: Governor signed (Apr 18, 2025). Effective date: August 6, 2025 (assuming no referendum).

Purpose / Intent

Modernize Colorado law on insurance “rebates” and clarify when insurers and producers may offer discounts, gifts, promotional pricing, or value‑added products/services without committing a deceptive trade practice. The bill aims to permit consumer‑facing promotional practices that enhance policy value or reduce risk while preserving consumer protections and regulatory oversight.

Key provisions

  • Repeals a strict prohibition that treated many discounts or inducements as deceptive; creates specific exceptions permitting certain rebates, gifts, discounts, and promotional offers.
  • Permitted offers include:
    • Noncash gifts, items, or services (initially identified as under $250, and raffle prizes up to $500 in early text) in connection with marketing, purchase, or retention of insurance. The commissioner may set reasonable per‑policy limits (per term/per policy year) and adjust for inflation by rule.
    • Free or discounted products/services that are related to coverage and primarily aim to: mitigate or control loss; reduce claim or settlement costs; educate about liability/risk; monitor/assess risk; enhance health; promote financial wellness; provide post‑loss services; encourage healthier behavior; or assist benefit administration.
    • Tangentially related services (not conditioned on purchase) offered on the same terms to all potential customers; insurers must disclose in writing before purchase/quote/agent designation that receipt is not contingent on buying insurance.
  • Pilot/testing programs: If an insurer has a good‑faith belief a product meets the criteria but lacks full evidence, it may run a pilot for up to one year after notifying the Division of Insurance; the Division has 21 days to object.
  • Consumer protections and oversight:
    • Insurers must maintain objective, documented criteria for product/service availability and produce them on request.
    • Commissioner (Division of Insurance) may adopt rules addressing consumer data/privacy, disclosures, unfair discrimination, and financial limits.
    • Insurers must provide contact information for questions about offered products/services.

Who is affected

  • Insurers and insurance producers: gain clearer authority to offer rebates, gifts, and value‑added services subject to rules and limits.
  • Consumers: may receive more promotional offers and services (with disclosure and privacy protections).
  • State regulators and courts: Department of Regulatory Agencies (Division of Insurance) will have minimal additional workload for rulemaking and pilot reviews; Office of Administrative Courts and Judicial Department may see minimal decreases in deceptive trade practice cases.

Fiscal impact

  • No appropriation required. Fiscal notes project minimal state workload changes and minimal decreases in state revenue from civil penalties and court filing fees (penalties for deceptive trade practices can be up to $3,000 per act). All impacts are expected to be minimal and manageable within existing appropriations.

Procedural history & sponsors

  • Introduced Jan 21, 2025; passed both chambers with amendments; House concurrence Mar–Apr 2025; Governor signed Apr 18, 2025.
  • Primary sponsors: Sen. Marc Snyder; Reps. Gretchen Rydin and Ryan Gonzalez. Multiple cosponsors listed.

Compiled from official sources — confirm details with the bill’s official record.

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