Colorado State Laws- Insurance

Claims Procedures- Exception

A claim must be filed within 5 years for disability or death resulting from exposure to radioactive materials.

Credit Report

A consumer reporting agency's communication of information about a consumer's creditworthiness, credit standing, or credit capacity that is or can be used to determine premiums, eligibility for coverage, or tier placement.

Fraudulent Claims and Arson Information Reporting Act

A fraudulent insurance act is committed if a person, knowingly and with intent to defraud, presents any written statement containing false material information or concealing material information in a policy application or claim. When an insurer has reason to believe that a fire loss was caused by other than accidental means or that an insurance clam may be fraudulent, it must notify an authorized investigative agency. Authorized agencies includes the fire department, the Colorado Bureau of Investigation (including the Attorney General), the district attorney, and the Division of Insurance. Insurers must report fraudulent insurance acts within 60 days of establishing reasonable suspicion of fraud. Authorized agencies may require the insurer to produce relevant information related to the loss, such as: The insured's claim history and/or premium payment history. Insurance policy information pertaining to a fire loss of other claim information under investigation. Other material related to the loss, including statements of any person who may have information about the loss. Any authorized agency or insurer that receives any information about suspected fraud must hold the information in confidence until its release is required for a civil or criminal proceeding. Any person violating this act commits a class 2 misdemeanor, which is punishable by imprisonment and/or fines. Every person (except the person committing the act), insurer, and authorized agency is immune from civil liability when complying with a court order, testifying or cooperating with, furnishing evidence, or providing information regarding an actual or suspected fraudulent insurance act to any of the following: Any agency of the federal, state, county, or municipal government. Any employee or agent of an agency. Another insurer, solely for the purpose of detecting, investigating, preventing, or prosecuting an actual or suspected fraudulent insurance act.

Insurance and Loans Secured by Real Property

A lender may not require a borrower under a loan secured by real property to provide hazard insurance coverage on that property in an amount exceeding the replacement value of the improvements on the property. Any person harmed by a violation of this rule is entitled to obtain court-ordered relief and can recover damages, reasonable attorney fees, and costs. A violation does not affect the validity of the loan, the mortgage, or the deed of trust.

Nonresident License

A licensee from another state may apply for a nonresident license in Colorado. The Commissioner will waive any requirements for a qualified nonresident license applicant with a valid license from the applicant's home state as long as the home state is reciprocal and awards nonresident licenses to residents of this state on the same basis. The Commissioner may issue an insurance producer license to a qualified nonresident person based on the following: The person maintains a license in good standing in the home state The agency or business entity has its principal office located in another state. The person holds a similar license on the same basis and same lines of authority applied for in this state. A proper request was submitted and fees were paid. The nonresident filed a current certification of license status with the Commissioner The license status can be verified through the NAIC database. A nonresident who moves from one state to another or a resident producer who moves from this state to another must file a change of address and certification from the new home state within 30 days after change of legal residence without paying a fee. If a person's home state license is suspended, terminated, or revoked, the nonresident producer must notify the Commissioner and return the Colorado nonresident license.

Notice Requirements

A notice of an intended action must state in clear and specific terms: The proposed action to be taken, including the amount of any increase in premium or extent of reduction in coverage, The proposed effective date of the action, The actual reason(s) for the action that are clear and specific so that a person of average intelligence can identify the basis for the decision The right of the insured to replace the auto coverage through an assigned risk plan, The right of the insured to file a complaint with the Division of Insurance regarding the action intended to be taken.

Notice of Cancellation

A notice of cancellation must be mailed or delivered by the insurer to the named insured at least 30 days prior to the effective cancellation date. If cancelling for nonpayment of premium, at least 10 days' notice must be provided. Upon written request of the named insured, the reason for the cancellation must be mailed or delivered at least 15 days prior to the cancellation.

Insurance Score

A number or rating derived from a mathematical process based on credit information in order to predict the future loss exposure of an applicant or insured.

Examinations- 2

A person who knowingly or willfully makes any false certificate or entry in any of the books or papers of a company, or in any statement filed in the course of an examination, with the intent to deceive the Commissioner is guilty of a misdemeanor and, upon conviction, will be: Punished by a fine of up to $5,000; and/or. Imprisoned in the county jail for at least 2 months, and up to 12 months. A person who knowingly testifies falsely to any matter related to an investigation, examination, or inquiry is guilty of a misdemeanor and, upon conviction, will be: Punished by a fine up to $5,000; and/or. Imprisoned in the county jail up to 3 months

Producer

A person who solicits, negotiates, effects, procures, delivers, renews, continues, or binds policies of insurance for risks residing, located, or to be performed in this state. A producer cannot transact insurance for any lines of authority for which they are not qualified or properly licensed.

Controlled Business

A producer license cannot be granted or renewed to any person using the license for the purpose of writing controlled business, which is the act of obtaining insurance on the life or property of one's own self, spouse, or employer. A license is deemed to be used for the purpose of writing controlled business if, during any 12-month period, the total premiums on controlled business exceed the total premiums on all other insurance sold by the producer. This means that controlled business may be written on up to 50% of a producer's premiums during any 12 month period.

Appointments by Insurer

A producer must be appointed by at least 1 insurer to transact insurance. A producer can be appointed by more than 1 insurer, but the appointment must be in place at the time the business is placed. The appointment may be terminated by the producer, insurer, or Commissioner.

Immunity

A producer, insurer, or authorized representative who compiles information and makes it available to the Commissioner or law enforcement agency will not be subject to civil liabilities that arise from the result of any information that leads to the termination of a producer.

Policies Issued to Construction Professionals

A provision in a liability insurance policy issued to a construction professional that excludes or limits coverage for bodily injury, property damage, advertising injury, or personal injury occurring before the policy's inception date is void in regard to any injury or damage that was unknown to the insured before the policy became effective. In regard to liability insurance policies issued to construction professionals, the policy of Colorado favors a broad interpretation of insurance coverage and of the insurer's duty to defend the insured. Upon a finding of ambiguity in an insurance policy, a court may consider a construction professional's objective, reasonable expectations in the interpretation of an insurance policy issued to a construction professional.

Surplus Lines- 2

A surplus lines producer cannot place insurance with a nonadmitted insurer solely to get a lower policy premium than that which would be accepted by an admitted carrier, unless the premium rate quoted by the admitted carrier is more than 10% higher than that quoted by the nonadmitted carrier. A non-admitted insurer must be listed on the Commissioner's approved list of surplus lines insurers, which is issued each year on July 1st. A foreign or alien non-admitted insurer that wants to be included on the approved list must apply and pay the required fees on or before March 1st of every year. Surplus line brokers must pay a tax on the net premiums they receive from selling nonadmitted insurance. On or before March 1st of each year, each surplus lines producer must remit to the Division a 3% tax on the net premiums paid for surplus lines business they transacted in the previous year.

Unauthorized Entities

Acting as an agent or aiding with any insurance transaction in Colorado, including proposing an insurance contract, taking applications, receiving premiums, and delivering contracts, is strictly prohibited unless the entity or individual is authorized with the required certificate of authority. An unauthorized entity engages in the transaction of insurance without specific authorization to do so. Through the attorney general, the Commissioner can file an action in court to enjoin unauthorized entities from their activities. A complaint will be filed in the district court for the city of Denver to restrain such company from continuing violations. The Commissioner will issue an emergency cease and desist order if it appears that the alleged conduct is fraudulent, creates an immediate danger to the public safety, or is expected to cause irreparable public injury. The emergency order will be served to the person by certified or registered mail with return receipt at the last known address stating the charges and requiring such person to immediately cease and desist from the practices stated in the order. The subject of the emergency order may request an immediate hearing for an opportunity to show cause why the order should be upheld. The Commissioner may conduct a hearing to determine if an emergency cease and desist order has been violated. Notice of the hearing must be mailed to the violator's last known address with at least 21 days' notice. If, after a hearing, the Commissioner determines that an emergency cease and desist order has been violated, the Commissioner may impose a civil penalty of $25,000 per violation and order complete restitution to all parties affected.

License Suspension and Revocation

After conducting a hearing, the Commissioner can refuse, suspend, revoke, or non-renew a license if suitable grounds are found, or if the licensee has violated any provision under state law, or has: Attempted to obtain the license by fraud, misrepresentation, or a material misstatement. Been convicted of a felony or misdemeanor involving moral turpitude. Misappropriated funds. Accepted insurance business from an unlicensed individual or entity. Had a license suspended or revoked in another state. Violated insurance law in another state, or violated an order of the commissioner of another state. Demonstrated a lack of trustworthiness or competence. Cheated on an insurance examination. Committed an unfair trade practice or fraud. Forged another's name to an application for insurance or any document related to an insurance transaction. Failed to comply with an administrative or court order to pay state income tax or child support. Misrepresented the terms of any actual or proposed insurance contract or application for insurance. Failed to meet all licensing requirements. Submitted a license application that contains any incorrect, misleading, incomplete, or materially false information

Uninsured Motorist (UM)/Underinsured Motorist (UIM) Coverages

All auto liability policies issued in this state must offer coverage for the protection of persons entitled to recover damages from owners and operators of uninsured and underinsured motor vehicles. The named insured may reject this coverage in writing. Before the policy is issued or renewed, the insurer must offer the insured the right to obtain uninsured motorist coverage equal to the insured's bodily injury liability limits. The insurer cannot be required to offer limits higher than the insured's limits. The minimum bodily injury limits for UM/UIM coverage is $25,000 for any one person in one accident, and $50,000 for all persons in any one accident. This coverage is in addition to any legal liability and will cover the difference between the amount of legal liability coverage and the amount of damages up to the amount of coverage obtained. Every policy providing UM/UIM which does not also provide insurance for collision damage must provide coverage for property damage arising out of the operation, maintenance, or use of an uninsured motor vehicle. This coverage is provided at the request of the insured and provides coverage for the actual cash value of the vehicle or the cost to repair or replacement, whichever is less. This coverage may be subject to a deductible. Coverage is not provided for: Damage if there is not actual physical contact between the covered motor vehicle and another motor vehicle. Damages payable under any other property insurance. Loss of use of the motor vehicle. The minimum property damage limit for UM/UIM coverage is $15,000 for any one accident.

Financial Statements

All insurance companies doing business in Colorado must file a financial statement with the Commissioner by March 1st of each year. This is a detailed statement summarizing the assets and liabilities, amount of business transacted, premiums collected, claims paid, returned premiums, and the amount of reinsurance accepted from admitted and nonadmitted insurers for the previous calendar year. This statement is made under oath and must be provided on what is known as the convention blank form, which is adopted year to year by the National Association of Insurance Commissioners (NAIC). Authorized insurers are required to file the convention blank form with the NAIC annually along with additional filings as prescribed by the Commissioner. The Commissioner may require an insurer to file interim financial statements and reports monthly or quarterly, if they deem it necessary to protect public interest.

Fiduciary Capacity/Commingling

All premiums received are held by the producer in a fiduciary capacity. This means that producers cannot commingle client premiums with their personal funds. Premiums received by the producer must be kept in a separate account. Commingling is a breach of fiduciary duty. Producers who act in an agency capacity must set up a separate trust account where premiums, earned and unearned, must be deposited until remitted to the rightful owner. A producer must:

Automobile Insurance- Grounds for Cancellation, Nonrenewal, and Increase in Premium

An auto policy that has been in force for at least 60 days can only be cancelled for one or more of the following reasons: Nonpayment of premium. The driver's license or motor vehicle registration of the named insured (or any operator either residing in the insured's household or who customarily operates an automobile insured under the policy) has been suspended or revoked during the policy period or, if the policy is a renewal, during the policy period or the 180 days immediately preceding its effective date The applicant knowingly made a false statement on the application. An insured knowingly and willfully made a false material statement on a claim under the policy. An insurer authorized to transact business in this state cannot refuse to write or refuse to renew an auto policy based solely on: The insured's age, race, gender, national origin, residence, marital status, or lawful occupation, including military service. The fact that another insurer has cancelled a policy, or refused to write or renew a policy. One motor vehicle conviction or accident resulting in less than 8 points assessed under the Colorado Motor Vehicle Point Assessment system.

Claims Procedures

An employee must notify the employer in writing within 4 working days of the injury. Failure to notify the employer may result in the employee losing up to one day's compensation for each day's failure to report. An employer must notify the Division and the insurer within 10 days after an injury that qualifies for compensation and benefits. If an incident involves injury to 3 or more employees, notice must be provided immediately. To receive compensation, an employee or dependents must file a claim within 2 years after the employer notifies the Division, or within 3 years if providing a reasonable excuse for failing to file a claim within 2 years.

Licensing Requirements

An individual applicant for a resident insurance producer license must apply to the Commissioner and meet certain requirements. The Commissioner will issue a producer license to an individual who: Is at least 18 years of age. Is competent, trustworthy, and of good moral character and business reputation Is a resident of Colorado, or a state for which Colorado grants nonresident licenses. Completes the required prelicensing education requirements Passes the state insurance licensing examination as a resident licensee. Pays the required license fee Has not committed an act that is ground for license refusal, suspension, or revocation. If a nonresident, submits a Letter of Certification issued within the previous 90 days from their home state's insurance regulatory authority with the application of license

Licensing Requirements- 2

An insurance agency or business entity must submit an application to act as an insurance producer. The Commissioner will issue a license if the agency or business entity has: Disclosed to the Commissioner all officers, partners, and Directors and whether or not they are licensed as producers and are trustworthy, of good moral character, and of good business reputation Paid the required fees as established by the Commissioner. Designated a licensed producer responsible for the agency or entity's compliance with state laws. Registered with the Commissioner each natural person who is acting as and is licensed as an insurance producer. At least one licensed individual must hold a valid license for the lines of authority requested in the application. The Commissioner may require the filing of any documents necessary to verify information contained or required in the application. Each insurer transacting any form of limited line credit insurance must provide each individual selling, soliciting, or negotiating limited lines credit insurance with a program of instruction approved by the Commissioner.

Lines of Authority

An insurance producer may receive qualification for a single license for one or more of the following lines of authority: Life, Accident and Health, Variable Life and Variable Annuity Products, Property, Casualty, Personal Lines, Limited Lines Credit Insurance, Crop hail, Title, Surplus Lines, Travel Insurance

Consumer

An insured whose credit information is used in the process of underwriting or rating insurance.

Availability of Fire Insurance

An insurer cannot refuse to issue a fire policy for property in a federally designated disaster area prone to wildfire, if the refusal is based on zip code, county, or distance from any wildfire. This regulation does not apply to property that is located within an immediately threatened area. The insurer cannot refuse to renew a fire policy for property located in an area that has been declared a federally designated disaster area due to wildfire. Additionally, the insurer may not refuse to renew a fire policy for a property located within an immediately threatened area for any reason that is related to existing wildfires. However, an insurer can require a property owner to take reasonable actions to reduce the risk of fire as a condition for renewal. Reasonable actions include: Requiring the policyowner to provide a defensible space around the structure, Requiring the property owner to clean out debris and leaves from gutters, downspouts, under decks and porches, Adding or enhancing fire suppression systems

Prohibited Changes in Rates or Coverages

An insurer is not permitted to increase premiums or decrease coverage under a property or casualty policy during the policy period if the insured has prepaid the premium. Exceptions exist for material misrepresentation or for changes in risk caused by the insured.

Automobile Insurance- Grounds for Cancellation, Nonrenewal, and Increase in Premium- 2

An insurer may not cancel, fail to renew, refuse to write, reclassify an insured, reduce coverage or increase premiums for any complying policy based on: Not-at-fault accidents, A single accident resulting in a payment of less than $1,000, Claims paid under comprehensive coverage, unless a result of the insured's negligence Claims paid under medical payments or uninsured motorist coverage, Claims paid under towing and labor coverage, The previous producer no longer representing the company, Blindness, specific physical disability, or physical impairment, Motor vehicle citations without convictions, Payments made by insurers without a good faith effort to determine fault When considering an intended action, the insurer may only take into account incidents and claims that have occurred within the last 36 months.

Notification of Termination of Appointment

An insurer must notify the Commissioner within 30 days of terminating a producer's appointment for cause. The insurer must provide additional documents, records, or data requested by the Commissioner if they have knowledge of a producer engaging in unlawful activities. The producer must be given a copy of the termination notice within 15 days after the Commissioner is notified. The producer has 30 days to file comments about the termination with the Commissioner.

Notice of Nonrenewal

An insurer must provide at least 30 days' advanced written notice of intention not to renew. This requirement does not apply in cases of nonpayment, if the insured has failed to pay any required advance premium, or if the insurer has demonstrated its willingness to renew. If the insurer refuses to renew, the insured may, by written request, demand written notification of the reason for the nonrenewal. The reasons for nonrenewal must be provided within 20 days of such request.

Homeowners Cancellation and Nonrenewal

An insurer offering Homeowners insurance cannot cancel or refuse to renew a policy without 30 days' advance written notice by 1st class mail stating the reason for the cancellation or nonrenewal. If the cancellation is for nonpayment of premium, the insurer need only give 10 days' advance written notice.

An insurance producer does not include the following and is not required to be licensed:

An insurer. Any officer, director, or employee who: Is salaried and devoted full time to clerical or administrative duties, including the incidental taking of applications and receipt of premiums as long as the person does not negotiate or solicit insurance and is not paid commission or compensation that varies based on the volume of application or premiums taken. Conducts activities that are executive, managerial, administrative, or clerical and not directly related to the sale, solicitation, or negotiation of insurance. Conducts activities related to underwriting, loss control, inspection, or claims handling. Is a special agent or supervisor providing technical aid and who neither sells nor negotiates insurance. An employer, association, or trustee administering its own employee benefit program that happens to use insurance. An employee inspecting, rating, or classifying risks if not selling or negotiating insurance. A management association, partnership, or corporation not publicly selling insurance. An auto rental company's officers and employees, for rental insurance transactions A person whose activities are limited to advertising A nonresident licensed to sell/negotiate commercial property and casualty policies in another state A salaried full-time employee whose job is to provide insurance advice to an employer, if not selling insurance or receiving commissions. A person who gathers/provides information for insurance purposes, if not receiving commissions. An agent, representative, or member of a fraternal benefit society who devotes substantially all of their time to activities other than solicitation and negotiation and does not receive a commission or compensation directly related to the number or amount of contracts. An agent, representative, or member of a fraternal benefit society who procured life insurance contracts in a face amount not exceeding $50,000, or any kind of insurance to not more than 25 individuals per year, and received no commission

Adverse Action

Any of the following actions taken by an insurer with respect to existing insurance or insurance that has been applied for: denial, cancellation, premium increase, or any unfavorable change in coverage or amount.

Variable Contracts

Applicants for a variable products license must obtain authority to write life insurance. They must also provide evidence that they have passed the appropriate FINRA registration exam and are currently registered with a FINRA-member broker or dealer firm. Nonresidents must meet the requirements of their resident state and be currently registered with a FINRA-member firm.

Use of Credit Information- 3

At the consumer's request, an insurer must re-underwrite or re-rate a policy at its annual renewal, based on the consumer's insurance score and an updated credit report. An insured can request a credit report be pulled no more frequently than every 12 months. The insurer can recalculate rates more often than every 12 months. If an insurer uses credit information in underwriting or rating a consumer, the insurer or producer must disclose in writing at the time of application that the insurer can obtain credit information in connection with the application. The disclosure must communicate the following: "In connection with this application for insurance, we may review your credit report or obtain or use a credit-based insurance score based on the information contained in that credit report. We may use a third party in connection with the development of your insurance score." An insurer taking an adverse action based on credit information must notify the consumer of the action and the specific reason for the action. The notification must include a description of up to 4 factors that were the primary influences of the adverse action. The use of generalized terms such as "poor credit history," "poor credit rating," or "poor insurance score" does not meet the explanation requirements.

The following are methods of unfair competition and unfair or deceptive acts and practices in the insurance business:

Coercion and Misrepresentation

Rate Regulations

Colorado laws relating to rate regulations were designed to protect the public and to: Prohibit price-fixing agreements and other anti-competitive behavior by insurers. Promote price competition among insurers Improve the availability and reliability of insurance. Provide rates that are responsive to competitive market conditions. Rates may not be excessive, inadequate, or unfairly discriminatory. Rates are excessive when profit is unreasonably high for the insurance provided, and expenses are unreasonably high in relation to services rendered. Rates are inadequate when they are insufficient to sustain projected losses and expenses, and when continued, are likely to create a monopoly in the market. Rates are unfairly discriminatory when the difference between one carrier's rates and those of the competition fail to reflect fairly the differences in expected losses and expenses. Past and prospective loss experience is considered when setting rates. An insurer is allowed a reasonable margin for profit.

Casualty- Lines of Authority

Coverage against legal liability, including death, injury, disability, or damage to real or personal property

Personal Lines- Lines of Authority

Coverage for noncommercial property and casualty losses sold to individuals and families

Accident and Health- Lines of Authority

Coverage for sickness, bodily injury, or accidental death and dismemberment that may include disability income

Property- Lines of Authority

Coverage for the direct or consequential loss or damage of property of any kind

Life- Lines of Authority

Coverage on human lives that may include benefits of endowment, annuities, accidental death or dismemberment and disability income

Variable Life and Variable Annuity Products- Lines of Authority

Coverage provided under such contracts

Death Benefits

Dependents of a deceased worker are entitled to receive 66 2/3% of the deceased employee's average weekly wage. If there are no dependents, compensation will be limited to the expenses provided for medical, hospital and funeral expense of the deceased. Reasonable funeral and burial expenses of an amount not to exceed $7,000 must be paid in a lump sum within 30 days after death.

Disability Benefits

Disability income compensation is computed based on the average weekly wage of the injured employee at the time of disability (the date of the accident). Benefits are payable at least once every 2 weeks. For an employee to receive disability benefits payable as wages, the disability period must exceed 3 days from when the employee leaves work as a result of the injury. If the disability lasts longer than 2 weeks, disability benefits are retroactive to the day the injured employee left work.

Prelicensing Education

Each applicant for a life, health, or property and casualty license must provide evidence to the Commissioner of completion of an approved prelicensing educational program. Applicants must complete at least 50 hours of approved education in each line of authority in which they seek licensure. This includes 3 hours pertaining specifically to insurance industry ethics. The training requirements are as follows: 50 hours - Life only 50 hours - Health only 50 hours - Property and Casualty An individual seeking a producer license must pay, in addition to other fees and charges, an established fee for the operation of the prelicensing education program. A certificate of completion must be issued by the approved course provider to each person who completes the course. The certificate of completion must have been earned prior to sitting for the state license examination. Prelicensing certificates of completion are valid for a period of 1 year from the date of completion. Prelicensing certificates of completion that are more than 1 year old will not be accepted by the Division and students will be required to take an approved prelicensing course.

Sources of Coverages

Employers must secure compensation for all their employees in one or more of the following ways: By insuring and maintaining coverage for the payment of compensation in the Pinnacol Assurance fund (State of Colorado Workers' Compensation fund), By insuring and maintaining coverage for the payment of compensation with any stock or mutual insurer authorized to sell Workers' Compensation insurance in this state, By obtaining a self-insurance certificate of authority from the Commissioner of insurance. Public entities, as well as trade or professional associations, may cooperate with one another to form a self-insurance pool in order to provide Workers' Compensation coverage. Members must submit a written proposal to the Commissioner before forming the pool. The Commissioner will review the proposal, and either issue a certificate of authority to the pool or disapprove the pool. Employers may not require employees to pay for all or any part of the cost of Workers' Compensation insurance.

Coercion

Entering into action resulting in an unreasonable restraint of, or monopoly in, the insurance business Coercing a debtor into acquiring required insurance through a particular insurer, group, agent, or broker Unreasonably disapproving a policy that provides required coverage Requiring a borrower, mortgagor, purchaser, insurer, broker, or agent to pay a handling or replacement charge on a policy required to secure a loan on real property

Records and Requests for Information

Every entity and person must maintain its books, records, documents, and other business records, including internal and external communications, in a manner so that the following information may be readily understood: Operations and management, Policyholder services, Claims handling, Rating, Underwriting, Advertising, marketing, and sales, Complaint/grievance handling, Producer licensing; And, for Health insurers: Network adequacy, Utilization review, Quality assessment and improvement, Provider credentialing. Policy records must also be maintained, and entities should be able to produce them for each policy, plan, or contract issued. Records and data for this regulation must be maintained for the current calendar year plus 2 prior calendar years. In other words, they must be maintained for 3 years. Unless another time period is specified, every individual or business entity must provide a complete and accurate response to a written request for information within 10 calendar days from the date on the form. Except for responses to a written request for information, and unless another time period is specified, every individual or business entity must provide a complete and accurate response to any inquiry from the Division within 20 calendar days from the date of the inquiry.

Colorado Fraud Statute

Every licensed insurer doing business in Colorado must prepare, implement, and maintain an insurance anti-fraud plan outlining specific procedures to: Prevent, detect, and investigate fraud. Educate employees about fraud detection and the company's anti-fraud plan. Provide for hiring or contracting fraud investigator(s). Report fraud to law enforcement and regulatory entities. Each insurer must state, on all applications, policies, and claim forms, that it is illegal to knowingly make a material misstatement or material omission in order to commit fraud. Penalties can include imprisonment, fines, denial of coverage, and civil damages. Each insurer or person obtaining a judgment or settlement against a licensed insurance professional who is compensated from claim proceeds must notify the appropriate Colorado state licensing board of the judgment or settlement. Likewise, each person obtaining a judgment or settlement against an insurer can notify the Colorado Division of Insurance of the judgment or settlement.

Unauthorized Entities- 2

If a person fails to pay a penalty or make complete restitution, the Commissioner may refer the matter to the attorney general for enforcement, or cancel or revoke any permit, license, of certificate of authority. Failure to obtain a certificate of authority will not impair the validity of a contract. An unauthorized insurance entity is still liable for its contractual obligations. If an unauthorized insurer fails to pay its claims, any person who helped the insurer procure the contract is liable to an insured for the full value of any loss insured under the contract. All insurance advisers, counselors, or analysts must report every policy issued by an unauthorized insurer to the Commissioner. This requirement also applies to insurance investigators and adjusters.

Extension Requests

If additional time is required to respond to any Division inquiry, a written request for an extension of time must be submitted to the Division employee or examiner making the inquiry. The request for an extension of time must: Be made no later than 5:00 PM Mountain Time on the business day prior to the response due date Include a specific period of time for the extension State in detail the reasons necessitating the extension. An extension may be granted, at the discretion of the Division, for good cause shown. If an extension is not granted, or the person requesting the extension does not receive written confirmation from the Division that the extension is granted, the original response due date applies. A civil penalty of $500 for an initial violation, which may be increased up to $5,000 for each subsequent violation, may be imposed if an entity: Fails to provide a complete and accurate response to a Division inquiry. Fails to request an extension for a specified period. Fails to provide a complete and accurate response to a Division inquiry when an extension is not granted

Use of Credit Information-2

If an insurer uses credit information in its underwriting or rating processes, it must disclose to the consumer, in writing at the time of application for insurance, of its intention to obtain credit information. An insurer offering personal property and casualty insurance may not: Take adverse action against a consumer based on information contained in a credit report that was more than 90 days old on the date the policy was first written or renewed. Use credit information more than 36 months old, unless the insurer has obtained current information for the consumer, recalculates the insurance score, and obtains an updated credit report, at least every 3 years. Use the following as a negative factor in an insurance score or credit information to underwrite or rate a policy: Credit inquiries not initiated by the consumer. Credit inquiries for the consumer's own records. Inquiries relating to insurance. Medical accounts in collection. Multiple lender inquiries made by the auto or home lending industries within the same30-day period, unless only 1 is considered A verified case of identity theft. Credit information adversely affected by divorce or the credit information of a former spouse.

Reduction in Benefits

If it is determined that periodic death benefits granted by Social Security, or Workers' Compensation of another state or the federal government are payable to an employee and the employee's dependents, the aggregate death benefits may be reduced by up to 50%. Permanent total and temporary disability benefits may also be reduced when an employee is eligible for employer-paid retirement benefits or unemployment compensation benefits.

Penalties

If, after a hearing, the Commissioner finds the person charged has engaged in an unfair method of competition, deceptive act or practice, or has violated any other rules or laws, the Commissioner will: Provide the findings in writing and issue a cease and desist order. Impose a civil fine up to $3,000 for each unintentional violation and up to a maximum of $30,000 for all unintentional violations. Fines for knowing violations are $30,000 per violation and have a maximum of $750,000. Suspend or revoke a license, if the licensee knew or should have known a violation was being committed. Order payment of a claim not paid because of the violation, unless a civil action concerning the claim is pending. Any order issued as a final action by the Commissioner may be appealed and subject to judicial review by the Court of Appeals.

Workers' Compensation-Who Must Be Covered

In Colorado, eligible employers must provide Workers' Compensation coverage as required for all employees. An employer is defined as: The state and its districts, public institutions, and administrative boards. Every person, association, firm, and private corporation engaging 1 or more persons in the same business or employment. An individual that is free from control and direction in the performance of the service and is engaged in an independent trade, occupation, profession, or business is not considered an employee. To prove independence, it must be shown that the person for whom services are performed does not: Require the individual to work exclusively for the person for whom services are performed. Establish a quality of standard for the individual. Pay a salary instead of a fixed or contract rate. Terminate the work during the contract period unless the provider violates the terms of the contract or fails to produce a result that meets the specifications of the contract. Provide more than minimal training, tools, or benefits for the individual (materials and equipment may be supplied) Dictate the time of performance, except for a completion schedule and mutually agreeable work hours. Pay the service provider personally instead of making checks payable to the trade or business name Combine the business operations of the service provider with the person for whom services are being provided. The definition of employee is not based on an individual's status as an alien, minor, or being lawfully employed. Performing services exclusively or primarily for an individual/business is not conclusive evidence that an individual is an employee. Workers' Compensation coverage is optional for working general partners, sole proprietors in their own businesses, executive officers of corporations, and members of limited liability companies. These individuals may elect to reject coverage for themselves, or be included by an endorsement.

Benefits

In Colorado, every employer must furnish applicable medical (unlimited), dental, hospital, surgical, disability and death benefits based on covered losses.

License Suspension and Revocation- 2

In addition to, or in lieu of, termination of a license, a civil penalty can be imposed not to exceed $3,000 per violation. If the person fails to pay a penalty or make restitution, the Commissioner may refer the matter to the Attorney General (or District Attorney) for enforcement of any criminal violations. The Commissioner can enforce these provisions and impose a penalty or remedy against any person who is under investigation or charged with a violation even if the license has already lapsed or been surrendered. If the Commissioner decides to not renew or deny application for a license, the Commissioner must notify the applicant or licensee, in writing, of the reasons for that decision. Producers and business entities must report to the Commissioner if they are the subject of: Any administrative action by another jurisdiction or another governmental agency, within 30 days after the final disposition of the matter. Criminal prosecution in any jurisdiction, within 30 days after the initial pretrial hearing date. A conviction of insurance fraud, within 30 days of the conviction

Exclusion of Named Driver

In lieu of cancellation, refusal to renew, or increase in premium, the insurer must offer to exclude any person in a household by name if a person's driving record and claim experience would justify the refusal to write a policy if such person were applying individually and not part of a household. The premiums charged on any policy excluding a named driver will not reflect the claims experience or driving record of the excluded named driver. The insurer will not be liable for damages, losses, or claims arising out of the operation of use of the insured vehicle by the excluded named driver, whether or not the driver had express or implied permission of the person insured. There is no coverage under the policy for a named excluded driver. A written notice must be provided at each policy renewal re-notifying the named insured of the party specifically excluded from coverage. Failure to re-notify the insured removes the exclusion.

Surplus Lines

In most cases, insurance must be sold through an admitted insurer that holds a certificate of authority. However, certain types of high-risk insurance may not be available for sale through an admitted insurer and therefore may need to be placed legally through a nonadmitted insurer. A nonadmitted insurer is not required to hold a certificate of authority and does not file rates or forms with the Commissioner. In order to place business through a nonadmitted insurer, a person must be licensed as a surplus lines producer. Producers must first be licensed as an insurance producer before applying for a surplus lines producer license. A resident producer can obtain a surplus lines producer license to represent nonadmitted insurers if the person: Is deemed to be trustworthy and competent by the Commissioner. Only transacts surplus lines business according to law Promptly remits taxes on surplus lines insurance transactions. Surplus lines producers must prepare documentation demonstrating the required coverage was not procurable after a diligent search was made from among a minimum of 3 admitted insurers. A written record documenting diligent search efforts must be maintained by the producer for at least 3 years from the effective date of coverage. Within 30 days of placing coverage with a nonadmitted insurer, a surplus lines producer must file with the Commissioner an affidavit describing the coverage.

Permanent Total Disability

In the case of permanent total disability, the employee will receive 66 2/3% of the average weekly wages of the injured employee (not to exceed 91% of the state average weekly wage) and will continue for the life of the injured employee.

Temporary Partial Disability

In the case of temporary partial disability, the employee will receive 66 2/3% of the difference between the employee's average weekly wage at the time of injury and the weekly wage earned during the continuance of the temporary partial disability. The benefit may not exceed 91% of the state average weekly wage. Benefits will continue until the employee reaches maximum medical improvement or the employee fails to return to physician-approved modified employment.

License Contents

Insurance producer licenses are issued as perpetual to an applicant who has met the requirements. Each producer license remains in effect unless suspended or revoked, as long as the continuation fee is paid and CE requirements are completed on or before the due date. The license must include: Name, address, and personal identification number of the licensee, Date of issuance, General conditions relative to expiration or cancellation, Lines of insurance covered by the license, Trade name under which the licensee transacts business, Any other information deemed necessary by the Commissioner. Producers conducting business under an assumed name must register that name with the Commissioner prior to using the name. The Commissioner must also be notified prior to any change in or discontinuation of use of the name. The Commissioner will not accept registration of any name that is misleading to the public or is identical or similar to the name of any producer whose license has been revoked or suspended. A licensed producer who fails to meet the license continuation and renewal procedures due to military service, long-term medical disability, or any other condition deemed appropriate, may request a waiver of those procedures. A waiver may also be requested for examination requirements or other fines or sanctions imposed for failure to comply. All producer licensees must notify the Commissioner in writing of any change of address within 30 days after the change. Failure to provide notice will result in the assessment of a penalty.

Certificate of Authority

Insurers may transact insurance business in Colorado once they have received a certificate of authority from the Commissioner. This certificate states that the insurer has complied with Colorado laws and authorizes them to do business. Certificates of authority expire on June 30 each year, and so must be renewed annually. Certificates will be renewed as long as the insurer has continued to comply with state laws.

Summary Disclosure Form

Insurers must file a Summary Disclosure Form for personal lines coverage, dwelling, fire, homeowners, or auto coverage, and producers must provide the appropriate Summary Disclosure Form to: Applicants at initial purchase of coverage, Insureds at policy renewal, Homeowners policyowners at least annually. This form must be filed with the Insurance Division. The form must state in boldface letters that its contents do not replace any policy provisions and that the policyholder should read the policy for complete details of terms and coverage. It must contain the policy's major coverages, exclusions, cancellation and nonrenewal provisions, and the general factors considered when increasing premiums. The following disclosure requirements apply to personal auto policies: Every insurer or producer must: Provide a Summary Disclosure Form at the time of initial purchase and at renewal when there are changes in major coverages and exclusions. Have an insured's express consent to add optional and/or enhanced coverage that increases the premium, other than medical payments or uninsured or underinsured motorist coverage. Specify whether optional or enhanced coverage generating a premium increase was initiated by the insured, or recommended by the producer or insurer. Keep consent of the insured on file for a minimum of 3 years. An insurer must clearly explain to the insured the products and coverage amount purchased and how being at fault in a car accident affects coverage. Medical payments coverage must be explained in the form, and: $5,000 medical payments coverage must be provided by all policies unless an insured rejects coverage in writing. Rejection of coverage can be contained on the application; and The insurer can offer higher limits. It is an unfair trade practice to violate any law regulating a Summary Disclosure Form. If a coverage dispute arises after policy issue, failure of an insurer or producer to provide a Summary Disclosure Form will result in the presumption that the form was not initially provided.

Commercial Entities Hiring Risk Managers

Insurers negotiating with commercial entities and covering them with Type II insurance are exempt from rate filing and form certification requirements if such entities hire their own risk managers. Such an entity is referred to as an exempt commercial policyholder, and must meet the definition as determined by the Commissioner. The definition of an exempt commercial policyholder will be reviewed periodically by the Commissioner with the recommendation of risk-management professionals. If an exempt commercial policyholder operates in more than one state, the policy may include provisions to determine disputes arising from claim handling and procedures, cancellation of the policy, or nonrenewal of the policy. The state with the largest percentage of premiums charged under the policy will govern these disputes.

License Continuation

Licenses issued in Colorado are perpetual, but a continuation of authority must take place every 2 years. A continuation fee must be paid biennially by the last day of the producer's birth month. Producers will be notified of the procedures for renewing their license by mail or email 90 days before the renewal is due. If the producer does not meet the continuation requirements, their license will be cancelled. For up to one year, a license may be reinstated by applying for reinstatement and paying an initial application fee. After one year, licenses may only be reinstated by completing a new prelicensing education course and again passing the licensing exam.

Misrepresentation

Making a statement that is false/misleading: About a policy, its dividends, or its share of surplus receivable, or paid in the past About a person's financial condition or a life insurer's legal reserve system

Defamation

Making, publishing, or circulating any written or verbal statement that is false, maliciously critical, or derogatory to the financial condition of any insurance company with the intention to cause injury to that company.

Payment and Acceptance of Commissions/Fees

No individual or entity can pay commissions or other valuable consideration to any person not licensed as a producer. Only a licensed producer can accept commissions or other payment for services that must be performed by a licensed insurance professional. The individual or entity must be licensed when the service is performed, not necessarily when the consideration is received. Producers are prohibited from charging fees, in addition to commissions, for overhead expenses associated with soliciting, procuring, or servicing policies. However, producers can charge fees for specific services, such as retirement planning, estate planning, risk management, and financial planning, for which the producer does not receive a commission from an insurer. These fees can only be charged if, before service is provided, the client signs a statement that they are under no obligation to buy any insurance product through the producer in exchange for receiving the service. The producer must retain a copy of this document for at least 3 years after the services are rendered. A producer can split commissions only with a licensed partnership or corporation of which the producer is an employee, member, or agent, and a corporation of which the producer is an officer.

HIV Testing and Disclosure Requirements

No person may request or require that an applicant submit to an HIV related test without: Obtaining the applicant's prior written informed consent. Explaining the use of test results and to whom the test results may be disclosed. Providing the applicant with printed factual information the causes, symptoms and transmission of AIDS and what a person should do if the results of the HIV related test is positive. On the basis of the applicant's written informed consent prior to testing, the test results may be disclosed to reinsurers and medical personnel, but not agents or brokers. A separate written informed consent must be obtained from the applicant to disclose HIV related test results which identify the individual applicant. The applicant must be notified in writing of an adverse underwriting decision based on the results of the blood test, but the specific results of the test will not be disclosed to the applicant. The applicant must be informed that the results of the blood test will be sent to the physician designated by the applicant at the time of application.

Do Not Call List

Numbers on Colorado's No Call List must be removed from insurers' telemarketing lists at least once every 30 days.

Rebates

Offering or giving any premium discount, credit, service, advantage, favor, or anything of value that is not specified in the policy.

Unfair Discrimination-2

Permitting any classification solely on the basis of blindness, partial blindness, or a specific physical disability unless based on an unequal life expectancy or an expected risk of loss that is different than that of other individuals. Denying health care coverage based solely on an individual's casual or nonprofessional participation of motorcycling, snowmobiling, off-highway vehicle riding, skiing, or snowboarding. Reducing benefits under a health insurance policy by adding an exclusionary impairment rider unless the rider only excludes conditions which have been documented in the original application, underwriting medical exam, or insured's medical history. Refusing to insure a person solely because another insurer has refused to issue a policy, has canceled, or refused to renew an existing policy. Inquiring about sexual orientation; using information about gender, marital status, medical history, occupation, residential living arrangements, zip codes, or other territorial designations to determine sexual orientation; or using sexual orientation to determine insurability. Refusing to write insurance or charging a higher premium because a person sought counseling for concerns related to HIV/AIDS or based on nonspecific blood code information from the Medical Information Bureau (MIB); investigation in response to the existence of nonspecific blood code is allowed as long as it is conducted in accordance with the provisions of the law.

Unfair Discrimination

Permitting individuals of the same class and life expectancy to be charged different rates for any life insurance or annuity contract with the same coverage, or in dividends or other benefits payable. Permitting individuals of the same class between neighborhoods within a municipality and essentially of the same hazard to be charged different rates, policy fees, or benefits payable for any policy or contract of insurance. Refusing to insure or renew, canceling, or limiting the amount of coverage on a property and casualty risk solely because of the geographic location of the risk (known as redlining), unless based on sound underwriting and actuarial principles related to anticipated loss experience. Refusing to insure or renew, canceling, or limiting the amount of coverage on the residential property risk or personal property solely because of the age of the residential property. Terminating or modifying coverage, refusing to issue or renew any property or casualty policy solely because the applicant or insured is mentally or physically impaired. Permitting any classification solely on the basis of martial status or gender unless such classification is for the purpose of insuring family units or is justified by actuarial statistics.

Continuing Education

Producers must complete up to 24 hours of approved continuing education courses biennially. At least 3 of the CE hours must cover ethics, and at least 18 hours must be in the line(s) for which the producer is licensed. Producers licensed to sell property or personal lines insurance must complete 3 hours of continuing education on homeowner's insurance coverage. Written certification of completion of the course must be executed by the sponsoring organization. CE hours must be completed within 24 months of their license continuation date. Course cannot be repeated within 2 years after completion. Course instructors may earn the same number of credit hours as attendees, but may not count instruction hours for any course more than once in 2 years. A maximum of 12 hours of CE can carry over to the next renewal period; any carryover hours must have been earned in the 120 days prior to the license continuation date. CE requirements apply to any person licensed in Colorado to sell any line of insurance for which the state requires a licensing exam (i.e., life and annuity contracts, property and casualty, etc.). However, CE requirements do not apply to a person holding a limited or restricted license. The required number of hours applies regardless of the number of lines of authority for which a producer is licensed. Producers must retain documentation of course completion for 5 years following license continuation. The license of any person failing to comply with CE requirements, or who falsifies a Certificate of Completion, will be suspended until CE requirements are met. Noncompliance is subject to any of the sanctions that may be imposed for violating insurance or other laws, including civil penalties, issuance of cease and desist orders, and/or suspensions or revocations of licenses.

Rate regulations do not apply to:

Reinsurance (other than joint reinsurance) Life insurance and annuities Sickness and accident insurance Nonprofit hospital and health services Health Maintenance Organizations Surplus lines insurance

Surplus Lines- 3

Surplus lines contracts issued for delivery in this state must include the following required disclosures and statements: "This policy is issued by an insurance company that is not regulated by the Colorado Division of Insurance. The insurance company may not provide claims service and may not be subject to service of process in Colorado. If the insurance company becomes insolvent, insureds or claimants will not be eligible for protection under Colorado law." The Colorado Insurance Guaranty Association does not provide protection for such policies issued by nonadmitted insurers. For policies written on a claims-made basis: "This policy is a claims-made policy that provides liability coverage only if a claim is made during the policy period or any applicable extended reporting period". If an auto policy does not provide the basic complying policy coverages: "This policy does not meet the statutory requirements of this state's financial responsibility laws. It does not provide liability coverage for bodily injury and property damage".

Examinations

The Commissioner conducts formal financial examinations of every insurer licensed in this state to determine compliance with Colorado law and solvency standards. The Commissioner may conduct an examination as often as they deem appropriate, but most insurers must be examined at least once every 5 years. An examination is not limited to the financial condition of a company, and also can include all other activities and affairs of the company. Every person from whom information is requested must provide timely, convenient, and free access during reasonable hours at its offices of all books, records, accounts, papers, tapes, computer records, and other documents relating to the property, assets, business, and affairs of the company being examined. The Commissioner and all examiners have the power to issue subpoenas, administer oaths, and examine under oath any person regarding any matter pertinent to the examination. The refusal to submit to examination or comply with any reasonable written request of the examiners is grounds for suspension, revocation, denial, or nonrenewal of any license or authority.

Broad Power and Duties

The Commissioner has the power to administer and enforce the insurance laws of the state. The Commissioner does not make the law. The Commissioner may establish and amend reasonable rules as necessary to carry out duties. The Commissioner's duties include: Filing and safeguarding all books and papers required by law. Issuing certificates of authority to insurance companies that have complied with Colorado's laws: Requiring all authorized insurers to keep books, records, accounts, and vouchers to verify annual statements and financial solvency. Issuing, denying, revoking, or suspending licenses or certificates of authority as required by Colorado's law. Supervise the business of insurance in a manner that is in the best interest of the general public and that protects policyholders Conducting investigations and hearings to determine if anyone involved in the insurance business has engaged in any unfair method of competition, unfair or deceptive act or trade practice, or has violated the insurance laws in Colorado. Establishing effective procedures for examining the activities, operations, financial conditions and affairs of anyone transacting insurance, as determined by the general assembly. Ensuring that rates are adequate, as opposed to being excessive, inadequate, or unfairly discriminatory; the Commissioner does not set the rates

Confidentiality

The Commissioner is authorized to use these documents, materials, or other information to aid in the investigation and further any legal action taken against a producer. In general, all information received must be kept confidential, and no parties with access to this information can be required to testify in any private civil action concerning the confidential information.

Insurance Commissioner

The Commissioner is the head of the Division of Insurance and is appointed by the governor and confirmed by the state Senate. The Commissioner must be well versed in insurance and have no financial interest in any insurance agency or company other than as a policyholder. The Commissioner will hire employees to help carry out the duties of the office.

Hearings

The Commissioner may examine and investigate the business affairs and conduct of every person applying or holding a license to determine whether a person has been or is engaged in the violation of state insurance laws or an unfair or deceptive act, practice, or method of competition. Upon receiving information regarding a possible violation, the Commissioner may issue a statement of charges and hold a hearing. The person may be required to appear and show cause as to why the Commissioner should not refuse, suspend, revoke, or continue such person's license. The Commissioner can refuse, suspend, revoke, or non-renew the license of an agency or business entity if, after a hearing, it is found the agency or business knew or should have known of its partner's, officer's, or manager's violation of state law and neither reported it nor took corrective action.

Workers' Compensation-Who Must Be Covered-2

The Workers' Compensation Act of Colorado was not intended to apply to the following: Employees of charitable, fraternal, religious, or social employers who are elected or serve in an advisory capacity and receive an annual salary of less than $750. Employers of casual farm and ranch laborers, or persons who, at a place of business or domestically, do casual maintenance, repair, remodeling, yard, lawn, or shrub trimming as long as wages do not exceed $2,000 per calendar year. Employers of incidental casual laborers and domestic workers who work fewer than 40 hours per week and fewer than 5 days per week. An employer providing a student internship sponsored by an education institution for the purpose of providing on-the-job training without pay, as coverage will be provided by the educational institution

Unfair Claims Practices- 2

The acts in this section constitute unfair claims practices and the resulting penalties if committed in Colorado. The following acts cannot be committed willfully or so frequently that it indicates a general business practice: Adjusting a third-party claim based on comparative negligence without a reasonable investigation supporting the offset. Excluding medical benefits under health coverage solely because the individual uses a motorcycle, snowmobile, off-highway vehicle, skis, or a snowboard. Failure to acknowledge pertinent claim communications reasonably quickly. Failing to adopt and use standards for promptly investigating and settling claims. Failing to attempt, in good faith, to promptly, fairly and equitably settle a claim in which the insurer's liability has become reasonably clear. Failing to affirm or deny coverage within a reasonable period after receiving proof of loss. Failure to promptly give a reasonable explanation for the denial of a claim, based on policy provisions, applicable law, or both. Failure to promptly settle claims where liability is clear under a section of the policy, in order to influence settlements under other section(s)

Unfair Claims Practices

The acts in this section constitute unfair claims practices and the resulting penalties if committed in Colorado. The following acts cannot be committed willfully or so frequently that it indicates a general business practice: Misrepresenting pertinent policy facts or provisions relating to a claim. Compelling insureds to sue by offering substantially less than what a lawsuit would award. Refusing to pay claims without first conducting a reasonable investigation. Attempting to settle a claim for less than an amount a reasonable person would believe they are entitled by reference to written or printed advertising material. Attempting to settle a claim based on an application altered by the agent or company without notifying the insured or getting the insured's consent. Paying a claim without stating the coverage under which payment is made. Delaying investigation or payment by requiring the claimant to submit subsequent verification of a proof of loss when both the verification and the proof of loss require the same information. Making known to insureds or claimants a policy of appealing arbitration awards in order to compel settlements for less than the awarded amount

Surplus Lines- 4

The disclosures must be affixed to the Declarations page of the contract given to the insured and on a binder, if issued prior to the policy delivery. A copy of the disclosures must be maintained by the broker. A surplus lines producer licensed in another state will be issued a nonresident surplus lines producer license in this state as long as all qualifications are met.

Use of Credit Information

The following definitions only apply to property and casualty insurance used in personal lines: Adverse Action, Consumer, Credit Report, Insurance Score. If an insurer uses credit information in its underwriting or rating processes, it must disclose to the consumer, in writing at the time of application for insurance, of its intention to obtain credit information. An insurer offering personal property and casualty insurance may not: Use an insurance score that is based on the consumer's income, gender, address, postal zip code, ethnic group, religion, marital status, or nationality. Deny, cancel, or fail to renew a policy of personal lines property and casualty insurance based on credit information, without consideration of any other applicable underwriting factor that is independent of credit information. Establish a policy's renewal premiums based on credit information without consideration of any other applicable underwriting factor that is independent of credit information. Take adverse action against a consumer because they do not have a credit card, without consideration of any applicable underwriting factor that is independent of credit information. Use the absence of credit information or the inability to calculate an insurance score when underwriting or rating insurance, unless the insurer: Treats the consumer in a manner otherwise approved by the Commissioner, if the insurer presents information that the absence or inability relates to the risk for the insurer. Treats the risk as credit-neutral as defined by the insurer, or Excludes the use of credit as a component of the underwriting or rating processes.

Exemption from Prelicensing Education

The following individuals are exempt from the prelicensing education requirement: A nonresident applying for a license in this state for the same lines of authority, if the person is currently licensed in their home state and the license is in good standing. A person licensed in another state who moves to this state and applies to become a resident licensee in the same line of authority. This person must either be currently licensed in the other state or have submitted an application for resident licensure within 90 days of their previous home state license being cancelled

Rate Regulations-2

The kinds of insurance that are regulated are separated into two types: Type I coverages are regulated by prior filing and approval with the Division of Insurance and include: Workers' Compensation and Employer's Liability (if filed by a rating organization)Assigned risk motor vehicle insurance. Any other insurance classified as Type I by the Commissioner. Type II coverages are regulated by open competition and include all other types of property and casualty insurance, such as: Fire, Inland marine, Title, Medical malpractice, Credit Workers' Compensation and Employer's Liability (if filed by insurers), Any other kind of insurance not considered Type I.

Examinations- 3

The reasonable expenses and charges for the cost of the examination will be paid by the insurer. The cost of financial examinations outside of the state will be paid by the examinee and will include the expenses of the Commissioner and staff. In the course of legal or regulatory action, the Commissioner is able to use and make public any final or preliminary examination report. The Commissioner may also use any documents or other information discovered during the course of the examination.

Cancellation

To cancel a policy insuring commercial exposures that has been in force for 60 or more days, an insurer must provide the named insured with at least 10 days' advance written notice if cancelling for nonpayment of premium. For all other reasons, 45 days' advance written notice by 1st class mail to the last known address must be provided. A commercial policy can only be cancelled for one or more of the following reasons: Nonpayment of premium, A willful material misstatement on the application by the insured, Any substantial change in the exposure or risk as of the policy's effective date that was not included on the original application, unless the insured notifies the insurer of the change and the insurer accepts the change. If the insurer fails to provide the renewal terms and invoice at least 45 days prior to the expiration date of the policy, the insurer shows an indication of willingness to renew.

Premium Increase, Benefit Decrease

To increase premiums or decrease benefits when renewing a policy covering commercial exposures, an insurer must provide the named insured with at least 45 days' advance written notice stating the reason for such action, renewal terms, and premium due. A notice of a decrease in benefits during the policy's term is valid only if the notice states the reason and is based on one or more valid reasons for doing so, as previously stated: nonpayment of premium, material misstatement on the application, or substantial change in risk. These regulations do not apply to surplus lines or personal lines insurance.

Nonrenewal

To nonrenew a policy covering commercial exposures once the policy has been in effect for 60 or more days, the insurer must give the named insured at least 45 days' advance written notice. If the insurer fails to provide notice of nonrenewal at least 45 days prior to the expiration date, the insurer must renew the policy for an identical policy period at the same terms, conditions, and premium as the existing policy.

License Suspension and Revocation-3

When a license is revoked or surrendered to avoid discipline, the producer is not eligible to apply for a new license for 2 years after the date the license is revoked or surrendered. An insurance producer license is at all times considered property of the state of Colorado. If a license is suspended, revoked, terminated, discontinued, or nonrenewed, the Commissioner will require surrender of the license and order it to be returned promptly to the Commissioner by personal delivery or by certified or registered mail within 15 days of such action. If a license is lost, stolen, or destroyed while in possession of the licensee, an affidavit providing the facts of such loss must be provided to the Commissioner. In addition to notifying a resident insurance producer licensee of any penalties, suspension, revocation, or termination, the Commissioner must also notify the central office of the National Association of Insurance Commissioners (NAIC).

Rate Considerations

When setting rates, insurers can consider: Past and prospective loss and expense experience Catastrophic hazards and contingencies Events or trends Charges included to level premium rates over time Dividends or savings to be allowed or returned by insurers

An immediately threatened area

is an area under lawful order to evacuate or a pre-evacuation order.

An employee

is defined as any individual who performs services for pay under a contract of hire, expressed or implied (written or verbal).

Violating a cease and desist order

is punishable by a fine of up to $500 per violation of an individual or up to $10,000 per violation of an insurer, and/or license suspension or revocation.