Premium watchdogs: insurance division guards gonsumers.

• Author: Graham, Sandy

Almost seven years ago, John Jones of Westminster nearly died in a horrific car crash on his way to visit his ailing mother back East. Driving long hours to get home, he rear-ended a slow-moving truck when his eyes closed for a moment.

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During weeks of hospitalization and rehabilitation at the University of Tennessee trauma center, doctors "put me back together," Jones said. His bills totaled $160,000, yet he and his wife, Day, paid only about $2,000 out of pocket, thanks to good insurance coverage and Colorado's no-fault auto insurance laws.

Today, however, Jones likely would face grimmer finances if he were in a similar crash. State lawmakers' decision this year to replace no-fault auto insurance, also called personal injury protection (PIP), with a "tort" system, transformed the Colorado auto insurance scene. Under the tort system, the financial responsibility for a crash falls on the person at fault. PIP covered treatment of the injured policyholder regardless of fault.

"PIP is what protected me because of all the rehabilitation afterwards," said Jones, who is an insurance agent and a founder of INTEGRA insurance group. Being in the business as well as a crash survivor, he understands the impact of Colorado's auto-insurance reform. Most people, he fears, haven't a clue.

The return to a tort system in auto insurance--accomplished in only seven weeks--is just one bombshell dropped on Colorado's insurance customers in the past few years. Health insurance premiums continue to soar, forcing some businesses to drop coverage or make employees pay more of the bill. Other types of insurance, notably some professionals' liability insurance, are priced almost out of reach. In addition, insurers are quicker to cancel policyholders or refuse coverage when they see adverse risk. Finally, Colorado insurers are embroiled in debate over a controversial state economic development program, called CAPCO, that's funded by taxes paid by insurers on each insurance policy they write in the state.

Juggling industry oversight and consumer queries and complaints in this time of change is the Colorado Division of Insurance, headed by Insurance Commissioner Doug Dean, a former Speaker of the House. Like all state agencies, Dean's insurance-industry watchdog is operating with fewer employees and a smaller budget--yet operating fairly well, according to some observers.

"They do a great...