Bill > HB1205

This bill modifies the Fair Access to Insurance Requirements (FAIR) Plan Association in Colorado, clarifying its legal status and operational guidelines. The bill explicitly states that the FAIR Plan Association is not a state agency, government entity, or instrumentality, and any debts or obligations are solely the association's responsibility, with no state financial backing. The association's primary purpose remains providing property insurance coverage when commercial insurance is unavailable. The bill adds provisions that grant immunity to the association, its board, members, and regulators for actions taken in the performance of their duties. It also limits policyholder legal remedies against the association to breach of contract or breach of good faith, setting strict standards for such claims. Specifically, for a bad faith claim, a policyholder must prove the association acted unreasonably and knew or recklessly disregarded such unreasonableness, with damages limited to compensatory losses and punitive damages only available in cases of fraud, malice, or willful misconduct. The bill further specifies that successful policyholder claims can result in attorney fees, while frivolous claims could lead to the association receiving cost and fee awards.