In the report, NAII noted that last July, Colorado's 30-year-old no-fault auto insurance system was allowed to sunset, reverting back to a tort-based system. "This followed several years of failed efforts to reform the no-fault system," noted Michael Harrold, senior state government affairs director at NAII.

The NAII study found that as a result of the sunset of no-fault, the statewide average auto premium for a liability-only policy fell 27 percent. The average annual cost of a liability-only policy, which meets all the state legal requirements and includes optional uninsured motorist coverage, is now $503 compared to $691 with no-fault requirements and Uninsured Motorist/Underinsured Motorist coverage.

Commenting on the report, Commissioner Doug Dean at the Colorado Division of Insurance, department of regulatory agencies, said this is "great news" for Colorado insurance consumers. He added that the findings were "very much in line with what we expected to see."

Mr. Dean noted that NAII's report figures are supported by rate filings at the Colorado division of insurance.

"It is great news for all of the Colorado insurance consumers that the auto insurance premiums have gone down significantly and auto insurance is now more affordable," he said.

He also observed that current data from the National Association of Insurance Commissioners found Colorado motorists are paying the 10th-highest auto insurance rates in the country.

"But that ranking should drop," Mr. Dean forecast, "because no-fault states tend to be some of the higher-ranked states. Since we have seen premiums go down significantly, we think our overall ranking of what we pay for auto insurance will drop in coming years."

NAII's Mr. Harrold commented that the transition to a tort-based auto insurance system has been "extremely beneficial" to Colorado consumers. "Our analysis of the Colorado market demonstrates that the promise of rate relief has been accomplished. In addition, consumers have more choice regarding the type and amount of coverage they purchase," he said.