If enacted, HB 1119 will amend the Colorado Revised Statutes to establish procedures requiring all taxes, penalties, fines, and associated filings to be submitted electronically through the designated web-based application system starting from January 1, 2025. This creates a more unified approach to tax filing across state lines, potentially benefiting insurance companies by enabling them to handle multi-state compliance through a single interface. The integrated system is expected to reduce errors associated with duplicative data entry and streamline the payment processes, which could also lower costs for both states and taxpayers.
Summary
House Bill 1119 focuses on the implementation of a multi-state filing system for insurance taxes, particularly premium and surplus lines taxes. It facilitates the submission of tax filings and payments through a secure web-based application, streamlining the process for insurance companies operating in multiple states. Under this bill, the Commissioner of Insurance is authorized to contract with qualified third parties to develop and manage this system, enhancing efficiency in tax collection and reducing administrative burdens on taxpayers. The initiative aligns with trends observed in other states where similar systems have been adopted.
Sentiment
The reception of the bill appears to be largely positive among stakeholders in the insurance industry. Proponents argue that it will modernize tax filing procedures, promote compliance, and provide financial benefits through administrative efficiencies. However, there may be concerns regarding the costs associated with contracting third parties and ensuring the security of the web-based systems employed. Diverse opinions may arise regarding the effectiveness and accessibility of the new system from smaller entities unfamiliar with digital platforms.
Contention
While HB 1119 is largely seen as a move towards modernization, potential points of contention include the reliance on third-party vendors for the system development and possible fees charged to taxpayers for using the service. Critics may also question whether the move to a centralized electronic system could inadvertently disadvantage smaller insurance companies that may not have the resources to adapt quickly to new technologies. These discussions highlight the balance legislators must find between advancing technology and maintaining equitable access for all insurance providers.
Providing for the establishment of a web-based online insurance verification system for the verification of evidence of motor vehicle liability insurance, eliminating the requirement that the commissioner of insurance submit certain reports to the governor and requiring certain reports be available on the insurance department's website, removing certain entities from the definition of person for the purpose of enforcing insurance law, requiring that third party administrators maintain separate fiduciary accounts for individual payors and prohibiting the commingling of funds held on behalf of multiple payors, requiring the disclosure to the commissioner of insurance of any bankruptcy petition filed by or on behalf of such administrator pursuant to the United State bankruptcy code, requiring title agents to make their reports available for inspection upon request of the commissioner of insurance instead of submitting such reports annually, standardizing the amount of surety bonds filed with the commissioner of insurance at $100,000 and eliminating the small business exemption in certain counties.
The standards and management of an insurer with an insurance holding company system and the confidential treatment of investigation and examination records of insurance holding companies.