HB 1017 — Criminal Restitution Prohibited for Insurers

SecondNOTE: Regular Session Seventy-fifth General Assembly STATE OF COLORADO REREVISED This Version Includes All Amendments Adopted in the Second House LLS NO.

26-0424.01This Shelbybill Rosshas x4510been HOUSEprepared BILLfor 26-1017the HOUSEsignatures SPONSORSHIPof Espenozathe andappropriate Zokaie,legislative Bacon,officers Boesenecker,and Lindsay,the Mabrey,Governor. Martinez, McCluskie, Nguyen, Paschal, Sirota, Woodrow SENATE SPONSORSHIP Weissman, Coleman, Gonzales J., Jodeh, Kipp, Wallace e n e 2 E a 2 A U 7, N g 1 S d hr House Committees Senate Committees e a Judiciary Judiciary R M r e A BILL FOR AN ACT n 6 m 0 C ONCERNING PROHIBITING AN INSURER FROM RECEIVING T n , N U 1 RESTITUTION THROUGH THE CRIMINAL RESTITUTION PROCESS .

ETo idetermine cwhether Sthe aGovernor ahas Rsigned Mthe Billbill Summaryor ntaken (Note:other action on it, please consult the legislative status sheet, the legislative history, or the Session Laws.

ThisHOUSE summaryBILL applies26-1017 toBY thisREPRESENTATIVE(S) billEspenoza as introduced and doesZokaie, notreflectanyamendmentsthatmaybesubsequentlyadopted.IfthisbillBacon, eBoesenecker, nLindsay, 2Mabrey, passesMartinez, thirdNguyen, readingPaschal, inSirota, theWoodrow, houseMcCluskie; of introduction, a bill summary that m 2 applies to the reengrossed version of this bill will be available at E n 5 U U 2 http://leg.colorado.gov.) O i a H a r R e For the purpose of criminal restitution, current law defines a r F "victim" as any person who has suffered losses because of a contractual 3 relationship, including an insurer.

Thealso billSENATOR(S) excludesWeissman, anGonzales insurerJ., fromJodeh, theKipp, definitionWallace, ofColeman. "victim" and instead authorizes an insurer to file a civil g 6 action against the offender to recover losses if the insurer has suffered d 0 because of a contractual relationship with the victim.

ECONCERNING ePROHIBITING ,AN SINSURER RFROM 2RECEIVING URESTITUTION dTHROUGH rTHE HCRIMINAL 2RESTITUTION uPROCESS Shading. denotes HOUSE amendment.

DoubleBe underliningit denotesenacted SENATEby amendment.the General Assembly of the State of Colorado:

eSECTION1. b Capital letters or bold & italic numbers indicate new material to be added to existing law.n F Dashes through the words or numbers indicate deletions from existing law.

eInColoradoRevisedStatutes,18-1.3-601,add(1)(h) Aas Befollows: it enacted by the General Assembly of the State of Colorado:

SECTION 1.

In Colorado Revised Statutes, 18-1.3-601, add (1)(h) as follows:

(h) AANINSURANCECOMPANY NASPARTOFITSBUSINESSOPERATIONS INSURANCE COMPANY , ASCOMPENSATES PART OF ITS BUSINESS OPERATIONS ,COMPENSATES A DIRECT VICTIM OF A CRIME DUE TO THE CONTRACTUAL RELATIONSHIP BETWEEN THE INSURANCE COMPANY AND VICTIMWHEREBYTHEVICTIMPAYSTHEINSURANCECOMPANYAPREMIUMVICTIM ANDWHEREBY THE INSURANCEVICTIM COMPANYPAYS COMPENSATES THE VICTIMINSURANCE FORCOMPANY LOSSESA SUSTAINED.INTHESEINSTANCESPREMIUM ,CRIMINALRESTITUTIONTOMAKEDIRECTAND VICTIMSTHE WHOLE________ MUSTCapital BEletters PRIORITIZED,WHILEor INSURANCEbold COMPANIES& SHOULDitalic RECOVERnumbers THEIRindicate LOSSESnew THROUGHmaterial REMEDIESadded OTHERto THANexisting CRIMINALlaw; RESTITUTION ORDERS.

HOWEVERdashes ,ANthrough INSURANCEwords COMPANYor THATISADIRECTVICTIMOFACRIMEMUSTBEMADEWHOLETHROUGHTHEnumbers CRIMINALRESTITUTIONPROCESSindicate ,INCLUDINGIFTHEINSURANCECOMPANYdeletions ISAVICTIMOFASCHEMETODEFRAUDTHEINSURANCECOMPANYORWHENfrom THEexisting INSURANCElaw COMPANYand 'Ssuch PROPERTYmaterial ISis DAMAGEDnot ORpart STOLENof BYthe CRIMINALact. ACTS.

INSURANCECOMPANYCOMPENSATESTHEVICTIMFORLOSSESSUSTAINED .IN THESEINSTANCES ,CRIMINALRESTITUTIONTOMAKEDIRECTVICTIMSWHOLE MUST BE PRIORITIZED ,WHILE INSURANCE COMPANIES SHOULD RECOVER THEIR LOSSES THROUGH REMEDIES OTHER THAN CRIMINAL RESTITUTION ORDERS .H OWEVER ,AN INSURANCE COMPANY THAT IS A DIRECT VICTIM OF A CRIME MUST BE MADE WHOLE THROUGH THE CRIMINAL RESTITUTION PROCESS ,INCLUDINGIFTHEINSURANCECOMPANYISAVICTIMOFASCHEME TO DEFRAUD THE INSURANCE COMPANY OR WHEN THE INSURANCE COMPANY 'S PROPERTY IS DAMAGED OR STOLEN BY CRIMINAL ACTS .

(3)(a)(3) "Restitution"meansanypecuniarylosssufferedbyavictim(a) "Restitution" means anypecuniary loss suffered by a victim and includes, but is not limited to, all out-of-pocket expenses, interest, loss of use of money, anticipated future expenses, rewards paid by -2-victims, 1017money victims,moneyadvancedbylawenforcementagencies,moneyadvancedadvanced byagovernmentalagencyforaserviceanimal,adjustmentexpenses,andby law enforcement agencies, money advanced by a governmental agencyfor a service animal, adjustment expenses, and other losses or injuries proximatelyproximatelycaused causedbyan by an offender's conduct and that can bebereasonablycalculatedandrecompensedinmoney."Restitution"doesnot reasonablyinclude calculatedLOSSES FOR WHICH A VICTIM MAY BE COMPENSATED THROUGH A PRIVATE INSURANCE POLICY , damages for physical or mental pain and recompensedsuffering, inloss money.of consortium, loss of enjoyment of life, loss of future earnings, or punitive damages.

"Restitution"(d) does"Restitution"shallalsoincludeLSOINCLUDES notcostsincurredby incluLOSSESagovernmentalagencyor FORAWORKER WHICHSCOMPENSATION Ainsurerthatprovides VICTIMmedical MAYbenefits, BEhealth COMPENSATEDbenefits, THROUGHor Anonmedical PRIVATEsupport INSURANCEservices POLICYdirectly ,related damagesto fora physicalmedical or mentalhealth paincondition andto suffering,a lossvictim offor consortium,losses lossor ofinjuries enjoymentproximatelycaused ofbyan life,offender's lossconduct, ofincluding, futurebut earnings,not orlimited punitiveto, damages.costsincurredbymedicaid, MEDICARE ,andothercareprogramsforindigent persons.

(d)(4) "Restitution"shallalsoinclALSOINCLUDES(a) costsincurred"Victim" bymeans aany governmentalperson agencyaggrieved oAby WORKERthe 'Sconduct COMPENSATIONof insurer that providesmedicalbenefits,healthbenefits,ornonmedicalsupportservices directly related to a medical or health condition to a victim for losses or injuries proximately caused by an offender'soffender conduct,and including,includes, but is not limited to, coststhe incurredfollowing: by medicaiMEDICARE , and other care programs for indigent persons.

(4)(a)PAGE "Victim"meansanypersonaggrievedbytheconductofan2-HOUSE offenderBILL and26-1017 includes,(I) butAny isperson notagainst limitedwhom to,any thefelony, following:misdemeanor, petty OFFENSE ,ortrafficmisdemeanoroffensehasbeenperpetratedorattempted, INCLUDING AN INSURANCE COMPANY WHEN THE INSURANCE COMPANY IS A VICTIM OFA SCHEME TO DEFRAUD THE INSURANCE COMPANY OR WHEN THE INSURANCE COMPANY 'S PROPERTY IS DAMAGED OR STOLEN THROUGH A CRIMINAL ACT ;

(I)(III) Any person againstwho whom any felony, misdemeanor, petty OFFENSE , or traffic misdemeanor offense has beensuffered perpetratedlosses orbecause attempted,INCLUDINGof ANa INSURANCEcontractual COMPANYrelationship WHENwith, THEincluding INSURANCEbut COMPANYnot ISlimited Ato, VICTIMan OFinsurer, Aor SCHEMEbecause TOof DEFRAUDliabilityunderPURSUANTTO THEsection14-6-110C.R.S.,forapersondescribed INSURANCEin COMPANYsubparagraph OR(I) WHENor THE(II) INSURANCEof COMPANYthis Sparagraph PROPERTY(a)SUBSECTION IS(4)(a)(I)OR DAMAGED(4)(a)(II)OF ORTHIS STOLENSECTION THROUGH; A CRIMINAL ACT;

(III)(VI) AnypersonwhohassufferedlossesbecauseAny ofperson awho contractualhad relationshipto with,expend includingresources butfor notthe limitedpurposes to,described anin insurer,paragraphs or(b), because(c), and (d) of liabilitysubsection undePURSUANT(3) TOof this section 14-6-110SUBSECTIONS C.R.S.,(3)(b), for(3)(c),OR a(3)(d) personOF describedTHIS inSECTION subparagraph, (I)EXCEPT orNOT (II)AN ofINSURANCECOMPANYTHATCOMPENSATEDAVICTIMFORALOSS this,EXCEPTAS paraSUBSECTIONPROVIDED -3-IN 1017SUBSECTION (4)(a)(IOR(3)(d)OF (4)(a)(IIOF THIS SECTION;SECTION .

(VI)SECTION3. Any person who had to expend resources for the purposes described in paragraphs (b), (c), and (d) of subsection (3) of this section SUBSECTIONS (3)(b), (3)(cOR (3)(d)OF THIS SECTION,EXCEPT NOT AN INSURANCECOMPANYTHAT COMPENSATEDAVICTIMFORALOSS ,EXCEPT AS PROVIDED IN SUBSECTION (3)(d)OF THIS SECTION.

SECTIONInColoradoRevisedStatutes,18-1.3-603,amend(8); 3.

In Colorado Revised Statutes, 18-1.3-603, amend (8);

(8) (a) Notwithstanding the provisions of subsection (1) of this section,foranon-felonyconvictionundertitle42,C.R.S.,Thecourtshallsection, orderrestitutionconcerningonlytheportionofthevictim'specuniarylossfor a non-felony conviction under title 42, C.R.S., The court shall order restitution concerning only the portion of the victim's pecuniary loss for which the victimcannotvictim cannot be compensated under a policyofpolicy of insurance, self-insurance, an indemnity agreement, or a risk management fund.

(b) Thecourt,indeterminingtherestitutionamount,shallconsiderThe court, in determining the restitution amount, shall consider whether the defendant or the vehicle driven bybythe the defendant at the time of the offense was covered by:

(I) Acomplyingpolicyofinsuranceorcertificateofself-insuranceA complying policyof insurance or certificate of self-insurance as required by the laws of this state;

(II) Self-insuranceincludingbutnotlimitedtoinsurancecoverageSelf-insurance including but not limited to insurance coverage PAGE 3-HOUSE BILL 26-1017 pursuant to the provisions of part 15 of article 30 of title 24, C.R.S.;

(c) (I) Except as otherwise provided in this paragraph (c), a court maymaynotawardrestitutiontoavictimconcerningapecuniarylossforwhich not award restitution to a victim concerning a pecuniary loss for -4- 1017 which the victim has received or is entitled to receive benefits or reimbursementunderapolicyofinsuranceorotherindemnityagreement.reimbursement under a policy of insurance or other indemnity agreement.

(B) (Deleted byamendment,by amendment, L.

904, § 28, effective May 21, 2004.) (d)(I) (Deletedbyamendment,L.2004,p.904,§28,effectiveMay 21, 2004.) (II) (b) Nothing in this paragraph (d) (I)shall (DeletedHIS SECTION DOES NOT prohibit a nonowner driver or passenger in the A vehicle from being awarded restitution if theNONOWNER driver or passenger was not covered by amendment,his L.or her THE NONOWNER DRIVER 'S OR PASSENGER 'S own medical payments coverage policy.

2004,(e) p.(I)(c) Notwithstanding any provision of law to the contrary, an insurance company, risk management fund, or public entity shall not be IS NOT obligatedtodefendadefendantinahearingconcerningrestitution.No A court shall NOT interpret an indemnity or insurance contract so as to obligate AS REQUIRING an insurance company, risk management fund, or public entityto defend a defendant at a restitution hearing absent a specific agreement.

904,(II) §Notwithstanding 28,any effectiveprovision Mayof 21,law, 2004.)indemnity (II)(b)contract, Nothinginthisparagraph(d)shallHISSECTIONDOESNOTor prohibitinsurancecontracttothecontrary,aninsurancecompany,riskmanagement afund, nonowneror driverpublic entity shall not be obligated to pay or passengerotherwise insatisfy tAevehiclea fromcivil beingjudgment awardedrestitutionifthNONOWNERentered driverorpassengerwasnotcoveredpursuant byto histhis part 6, or heTHEto NONOWNERindemnify DRIVERa Sdefendant ORfor PASSENGERan 'Samount ownawarded medicalin paymentsa coveragerestitution policy.order.

(e)(f) (I)Nothing (c)in Notwithstandingthis anyarticle provisionshall ofbe lawconstrued to thelimit contrary,or anabrogate insurancethe company,PAGE risk4-HOUSE managementBILL fund,26-1017 orrights publicand entityimmunities shallset notforth bein ISthe NOT"Colorado obligatedGovernmental toImmunity defendAct", aarticle defendant10 inof atitle hearing24, concerningC.R.S. restitution.

No(g)(d) ATheprovisionsofThissubsection(8)shall courtDOES shNOTnotpreclude interpretthecourt,pursuanttoarticle4.1oftitle24,C.R.S.,fromorderingrestitution an indemnity or insurance contract so as to obligaASreimburse REQUIRING an insuranceexpenditure company,made riskby management fund, or public entity to defend a defendantvictim atcompensation afund. restitution hearing absent a specific agreement.

(II)(12) NotwithstandinganyprovisionofTHISPART law,indemnitycontract,6DOESNOTPREVENTANINSURANCECOMPANYFROM orFILING insuranceA contractCIVIL toACTION theOR contrary,PURSUING anANY insuranceOTHER company,CIVIL riskREMEDY managementAGAINST fund,A orDEFENDANT publicTO entityRECOVER shallLOSSES notTHE beINSURANCE obligatedCOMPANY toSUFFERED pay. or otherwise satisfy a civil judgment entered pursuant to this part 6, or to indemnify a defendant for an amount awarded in a restitution order.

(f)(13) NothingTHIS inPART this6 articleDOES shallNOT beLIMIT construedOR toABROGATE limitTHE orRIGHTS abrogateAND theIMMUNITIES rightsSET andFORTH immunitiesIN setTHE forth"C inOLORADO theGOVERNMENTAL "ColoradoIMMUNITY GovernmentalA -5-CT",ARTICLE 1017 Immunity Act", article 10 ofOF titleTITLE 24,24. C.R.S.

(g) (d) The provisions of This subsection (8) DOESlnot preclude the court, pursuant to article 4.1 of title 24, C.R.S., from ordering restitution to reimburse an expenditure made by a victim compensation fund.

(12) THIS PART6 DOES NOT PREVENT AN INSURANCE COMPANY FROM FILING A CIVIL ACTION OR PURSUING ANY OTHER CIVIL REMEDY AGAINST A DEFENDANT TO RECOVER LOSSES THE INSURANCE COMPANY SUFFERED .

(13) THIS PAR6 DOES NOT LIMIT OR ABROGATE THE RIGHTS AND IMMUNITIES SET FORTH IN TH"COLORADO GOVERNMENTAL IMMUNITY A CT",ARTICLE10 OF TITL24.

on the day following the expiration of the ninety-dayperiodafterfinaladjournmentofthegeneralassembly(Augustninety-dayperiod after final adjournment of the general assembly(August 12, 2026, if adjournment sine die is on May 13, 2026);