Court Opinion

ID: 9576513
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:25:22.487934+00
Date Added: 2024-06-11T13:09:23.084987
License: Public Domain

Judge JONES
concurring in part and dissenting in part.
While I concur with the majority that this court has jurisdiction to consider this appeal, I believe that the trial court erred in concluding that a self insurance pool is not an insurer subject to mandatory arbitration for recovery of PIP benefits under the No-Fault *262Act. Thus, I respectfully dissent from Part II of the majority opinion.
When an accident involves a public school vehicle designed to transport seven or more passengers and a nonprivate passenger motor vehicle, the insurer of the public school vehicle has a direct cause of action against the owner, user, or operator of the nonpri-vate passenger motor vehicle to recover PIP benefits actually paid by the insurer. Section 10-4-713(2), C.R.S.1999. The parties agree that a dump truck qualifies as a non-private passenger motor vehicle. See Farmers Insurance Exchange v. Bill Boom Inc., 961 P.2d 465 (Colo.1998).
Section 10-4-717, C.R.S.1999, provides that, when both parties to an action brought under § 10-4-713(2) are insurers licensed to do business in Colorado, the sole and mandatory remedy for recovery of PIP benefits is arbitration. Baumgart v. Kentucky Farm Bureau Mutual Insurance Co., 199 Colo. 330, 607 P.2d 1002 (1980). Section 10-4-717 provides, in relevant part, that:
[ejvery insurer licensed to write motor vehicle insurance in this state shall be deemed to have agreed, as a condition to maintaining such license ... [tjhat, where its insured is or would be held legally liable under the provisions of section 10-4-713(2) for the benefits paid by another insurer ... it will reimburse such other insurer to the extent of such benefits ... and [t]hat the issue of liability for such reimbursement and the amount thereof shall be decided by mandatory, binding intercompany arbitration .... (emphasis added).
By its terms, § 10-4-717 only applies to insurers “licensed to write motor vehicle insurance” in Colorado. Self-insurers who maintain a certificate of self-insurance under § 10-4-716, C.R.S.1999, qualify as insurers licensed to write motor vehicle insurance in Colorado for the purposes of § 10-4-717 and are subject to mandatory arbitration. Foreign insurers and uninsured motorists are not subject to mandatory arbitration, and may bring a direct action to recover PIP expenditures. Sakala v. Safeco Insurance Co., 833 P.2d 879 (Colo.App.1992).
Plaintiff here is a self insurance pool constituted under § 24-10-115.5, C.R.S.1999, which provides in relevant part:
(1) Public entities may cooperate with one another to form a self-insurance pool to provide all or part of the insurance coverage authorized by this article or by section 29-5-111, C.R.S., for the cooperating public entities. Any such self-insurance pool may provide such coverage by the methods authorized in sections 24-10-115(2) and 24-10-116(2), by any different methods if approved by the commissioner of insurance, or by any combination thereof....
(2) Any self-insurance pool authorized by subsection (1) of this section shall not be construed to be an insurance company nor otherwise subject to the provisions of the laws of this state regulating insurance or insurance companies; except that the pool shall comply with the applicable provisions of sections 10-1-203 and 10-1-204(1) to (5) and (10), C.R.S. (emphasis added).
Sections 24-10-115(2) and 24-10-116(2), C.R.S.1999, authorize self-insurance pools to provide insurance through the aegis of either self-insurance or by an insurance company authorized to do business in Colorado. Sections 10-1-203 and 10-1-204, C.R.S.1999, relate to financial examinations conducted by the insurance commissioner. Otherwise, self-insurance pools are governed solely by the provisions of § 24-10-115.5.
In City of Arvada v. Colorado Intergovernmental Risk Sharing Agency, 988 P.2d 184 (Colo.App.1999), a division of this court held that, under the plain language of § 24-10-115.5, self-insurance pools are not subject to certain notice requirements that the law imposes on insurance companies. The statute, therefore, deals solely with laws regulating insurance, and specifically insurance companies. It does not address the question of whether self-insurance pools are insurers for the purposes of the No-Fault Act.
I would conclude that self-insurance pools are insurers licensed to write motor vehicle insurance in Colorado, and that they are subject to the mandatory arbitration provisions of § 10-4-717. Several factors lead me to this conclusion.
*263Self-insurance pools are regulated by Colorado’s Commissioner of Insurance, who issues them a certificate of authority to write insurance. Section 24-10-115.5(3), C.R.S. 1999. They are subject to annual examinations by the Commissioner of Insurance to determine their ability to continue writing insurance, as are insurance companies. Section 24-10-115.5(5), C.R.S.1999.' Although they are not subject to most of the regulations and reporting requirements of insurance law, it is obvious that they are licensed to write insurance by the state of Colorado.
Therefore, I conclude that any self-insurance pool that is self-insured under § 24-10-115.5 is as much an insurer, licensed to do business in Colorado, as a self-insurer licensed under § 10-4-716, and is equally subject to mandatory arbitration to determine PIP benefits reimbursement under § 10-4-717. See Sakala v. Safeco Insurance Co. supra.; State Farm Mutual Automobile Insurance Co. v. Cabs, Inc., supra.
It is notable that self-insurance is but one of the ways in which a self-insurance pool may provide coverage for its members. Another option is to purchase insurance from a company licensed to do business in Colorado. Sections 24-10-115.5(1) and 24-10-115(2)(b), C.R.S.1999. Such a company would be subject to mandatory arbitration under § 10-4-717. The General Assembly clearly regarded both options as equally viable, and did not intend for self-insurance pools to opt out of the No-Fault Act’s requirement of mandatory arbitration merely by choosing to be self-insured. See Rasmussen v. Sauer, 597 N.W.2d 328 (Minn.Ct.App.1999) (the decision to become self-insured does not exempt a self-insurance pool from the requirements of the No-Fault Act).
I also conclude that exemption from regulation does not constitute exemption from the substantive requirements of insurance law. Vehicles owned by members of self-insurance pools must be insured under the No-Fault Act, as with every other vehicle in the state. Section 10-4-705, C.R.S.1999. Self-insurance pools pay PIP benefits and recover PIP benefits like every other insurer in Colorado. And, as they are subject to the benefits requirements of the No-Fault Act, they are also subject to its manifold procedural requirements.
For all of the above reasons, I would hold that self-insurance pools constituted under § 24-10-115.5 are insurers licensed to do business in Colorado and that they are to be regarded as such under the purposes of the No-Fault Act. As such, when self-insured, self-insurance pools are subject to mandatory arbitration of PIP benefits under § 10-4-717.
Here, plaintiff, Colorado School Districts Self Insurance Pool, is a self-insurance pool constituted under § 24-10-115.5, and provides coverage to its members through self-insurance. Therefore, I conclude that it is an insurer under the No-Fault Act and may only recover PIP benefits from another insurer through the sole and mandatory remedy of arbitration. Thus, I would hold that the trial court lacks jurisdiction over this case, and erred in denying defendants’ motion to dismiss.