3 CCR 702-5
DEPARTMENT OF REGULATORY AGENCIES Division of Insurance PROPERTY AND CASUALTY 3 CCR 702-5 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _______________________________________________________________________________ Regulation 5-1-1 MASS MERCHANDISING OF PROPERTY AND LIABILITY INSURANCE This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § 10-1-109, C.R.S.
The purpose of this regulation is to prescribe rules to prevent abuses in connection with the sale of property and liability insurance in this state pursuant to mass marketing plans, while preserving for consumers the potential benefits of this form of marketing. This regulation is in addition to, and not a substitution for, other applicable requirements of the Colorado insurance laws. It is not applicable to group life or group accident and health insurance or to marketing methods other than mass merchandising as defined herein. As used in this regulation:
A. "Mass merchandising" means the marketing of property and liability insurance through the sponsorship and assistance of an eligible group for the benefit of the eligible members thereof.
B. "Property and liability insurance" means all insurance to which the provisions of § 10-3-102(1)(a) and (c), C.R.S., apply.
C. "Group property and liability insurance" means all property and liability insurance issued to an eligible group for the benefit of the eligible members thereof, under a single insurance program, without individual underwriting, on a guaranteed issue basis, subject to the provisions of Section 5.
D. "Non-group property and liability insurance" means all property and liability insurance issued to individual members of an eligible group, with individual underwriting for determination of proper premium rates, on a guaranteed issue basis, subject to the provisions of Section 6.
E. "Eligible group" means any organization or association of persons which has not been organized principally for the purpose of obtaining insurance under a mass merchandising plan. An eligible group may consist of members of a union, employees of a common employer, members of an association, and the like, or any class or classes thereof, as determined by the conditions pertaining to employment or membership. Any such association must have been in existence for at least two (2) years prior to the purchase of insurance under a mass merchandising plan. Code of Colorado Regulations 1 F. "Eligible members" means all the employees and retirees of a common employer or members, in good standing, of an eligible group.
G. "Employees" means all active employees of a common employer, including proprietors, partners and directors, who are engaged in at least thirty (30) hours of employment per week. The term may apply to one or more subsidiaries or affiliates.
H. "Eligible member insured" means an eligible member of an eligible group who is provided insurance coverage under a mass merchandising plan.
Section 5 Mass Merchandising of Group Property and Liability Insurance Group property and liability insurance may be issued in Colorado under a mass merchandising plan provided the following conditions are complied with:
A. At the inception date of the group mass merchandising plan, the group must consist of at least 50 eligible members of which at least 50% said eligible members must agree in writing to participate in the mass merchandising plan at the expiration of existing insurance. At all times thereafter at least 50% of all eligible members must participate in the mass merchandising plan.
B. Insurance coverage must be provided to all eligible members of the eligible group desiring to participate in the mass merchandising plan, unless at least one of the reasons for cancellation or nonrenewal listed in paragraph A of Section 7 is known to exist.
C. Each eligible member insured must be issued the same form of policy, varying only as to the amounts of insurance coverage and limits of liability; except that, in the case of automobile insurance, uniform limits for bodily injury and property damage perils may be established and uniform comprehensive, collision and other supplemental coverages may be made optional.
D. Insurance must be provided either by individual policies, or individual certificates issued under a master policy and subject to the same terms and conditions as therein contained, to each subscribing member of the group.
Section 6 Mass Merchandising of Non-Group Property and Liability Insurance Non-group property and liability insurance may be issued in this state under a mass merchandising plan providing the following conditions are complied with:
A. All subscribing members must be eligible members of an eligible group, but the provisions of paragraph A of Section 5 regarding the minimum number of eligible members and percentage of participation shall not apply to mass merchandising of non-group property and liability insurance.
B. Insurance coverage must be provided to all eligible members of the eligible group desiring to participate in the mass merchandising plan at a premium rate based upon the applicant's proper classification unless at least one of the reasons for cancellation or nonrenewal listed in paragraph A of Section 7 is known to exist.
C. Insurance must be provided by individual policies to each subscribing member. Section 7 Cancellation and Non-Renewal A. Insurance coverage provided an eligible member insured under a mass merchandising plan for any line of business may be canceled or nonrenewed pursuant to Colorado insurance laws and regulation and the terms of the insurance contract.
Code of Colorado Regulations 2 B. All mass marketing plans shall provide the eligible member insured under such plan with an opportunity to purchase individual equivalent coverage from the same insurer or one of its affiliates upon termination of employment or membership or upon the discontinuance of the mass marketing plan. The failure of the eligible group to remit premiums when due shall not be regarded as non-payment of premium by an eligible member insured under any mass merchandising plan, unless such insured shall have been given written notice of such failure to remit and has not paid such premium by the later of: (a) thirty (30) days after such notice; or (b) the due date of such premium remittance under the mass merchandising plan.
C. Any notice of cancellation or non-renewal of any coverage of an eligible member insured under a non- group property and liability insurance plan shall be accompanied by a notice that, at his or her request, the insurer will afford a reasonable opportunity to the eligible member insured and/or the eligible group to present facts in opposition to cancellation or non-renewal. Section 8 Conversion A. Every policy of mass merchandised property and liability insurance shall contain a provision that if the eligible member insured's employment or membership in the eligible group is terminated or if the mass merchandising plan is terminated, the eligible member insured shall be entitled to:
B. The premium for any individual insurance policy issued by the insurer pursuant to this section shall be at the insurer's then customary rate applicable to the coverage provided and to the class of risk to which the insured belongs on an individual basis.
C. The failure of the eligible member insured to exercise his or her conversion privileges under this Section shall be treated as a voluntary termination of the coverage by the eligible member insured.
Section 9 Maintenance of Records Every insurer writing insurance under mass merchandising plans shall keep and maintain separate statistics for each classification of insurance within such plans, to include but not limited to complete records of premium income, losses and expenses, and adding thereto appropriate expense factors for acquisition, advertising, tax liabilities, legal, accounting, data processing and research and development expense. Said statistics from each of the above-listed factors shall be used to promulgate the premium rates and rating plans and to insure that the costs of the mass merchandising plans are in no way transferred to the rates of individuals who are not insured under such plans. Section 10 Premium Rates Code of Colorado Regulations 3 Premium rates under a mass merchandising plan must not be excessive, inadequate or unfairly discriminatory. Rates shall not be deemed to be unfairly discriminatory because different premiums result for policyholders with like exposures, but different expense factors, or like expense factors, but different loss exposures, so long as the rates reflect the difference with reasonable accuracy. Rates shall not be deemed to be unfairly discriminatory if they are averaged broadly among persons insured under a mass merchandising plan.
Section 11 Experience Rating Experience rating must be applied to any eligible group based on the experience of that group during the preceding insurance year or years.
Section 12 Producers No person shall act as an insurance producer in connection with any mass merchandising plan for any kind of insurance unless such person is duly licensed as a producer for such kind of insurance. For the purposes of this regulation, the following activities, if performed by the sponsoring eligible group, shall not require a producer’s license:
A. Collection and remittance of premium.
B. Distribution to eligible members of insurer prepared information pertaining to the mass merchandising plan.
C. Administrative services in connection with the mass merchandising plan. Section 13 Compulsory Participation Prohibited No employee or member shall be subject to any penalty, coercion, intimidation, or be discriminated against because of nonparticipation in any mass merchandising plan. Section 14 Tie-In Sales Prohibited No insurer shall sell insurance pursuant to a mass merchandising plan if the purchase of insurance available under such plan is contingent upon the purchase of any other insurance, product or service, or if the purchase or price of any other insurance, product or service is contingent upon the purchase of insurance available under such plan. This provision shall not be deemed to prohibit the reasonable requirement of safety devices, such as heat detectors, lightning rods, theft prevention equipment, and the like.
Section 15 Disclosure Required Every insurer or producer selling insurance, pursuant to a mass merchandising plan shall, prior to sale, provide full and fair disclosure to all prospective eligible member insureds, of all essential features of such plan, whether favorable or unfavorable, including, but not limited to, premium rates, benefits, duration of coverage, conversion privileges, and policyholder services. Section 16 Severability If any provisions of this regulation or its application to any person or circumstances are for any reason held to be invalid, the remainder of the regulation shall not be affected in any way. Section 17 Enforcement Code of Colorado Regulations 4 Non compliance with this Regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of insurance license. Section 18 Effective Date This regulation is effective on June 1, 2012.
Section 19 History Originally issued as Regulation 72-8, effective April 1,1972. Renumbered as Colorado Regulation 5-1-1 on June 1,1992. Amended Regulation effective January 1, 2002.
Amended Regulation effective April 1, 2002.
Sections 2, 3, 7, 18 and 19 amended effective February 1, 2004. Sections 7 and 18 amended effective January 1, 2005.
Amended regulation effective July 15, 2011.
Amended regulation effective June 1, 2012 Regulation 5-1-2 APPLICATION AND BINDER FORMS Section 5 Rules Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109 and 10-3-1110, C.R.S.
The purpose of this regulation is to implement rules that provide clear disclosure of the insurance company on the application form or on the binder. In addition, this regulation is designed to eliminate the Code of Colorado Regulations 5 unfair practice of providing false or misleading information by individuals who are not disclosing the name of the insurance company on an application form or a binder for insurance. This regulation shall apply to all property and casualty insurance coverage lawfully issued and delivered in the State of Colorado, except surplus line risks or insurance under the Colorado Motor Vehicle Insurance Plan under § 10-4-412, C.R.S.
A. “Binder” means a writing which describes the subject and amount of insurance and temporarily binds insurance coverage pending the issuance of an insurance policy.
B. “Application” shall include any application form or enrollment form for coverage under any policy. Section 5 Rules A producer shall clearly disclose the name of the insurance company on all applications, binders, and similar forms that will be used to insure the risk prior to the time the policy reaches the applicant. If any provision of this regulation or the application or it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation is effective on July 1, 2012.
Section 9 History Regulation 74-9, was effective 1974.
Regulation 74-9 was renumbered as Regulation 5-1-2, effective July 1, 1993. Regulation 5-1-2 was repealed and revised effective December 1, 2001. Amended regulation effective July 1, 2012.
Regulation 5-1-6 NATIONWIDE INLAND MARINE DEFINITION Code of Colorado Regulations 6 Section 4 Rules Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § 10-1-109, C.R.S.
The purpose of this regulation is to adopt a standard definition of “inland marine” insurance. This regulation shall apply to all property and casualty insurance coverage lawfully issued and delivered in the State of Colorado.
Section 4 Rules A. Marine or transportation policies may provide coverage under the following conditions:
Code of Colorado Regulations 7
Code of Colorado Regulations 8
Code of Colorado Regulations 10
B. Unless otherwise permitted, nothing above shall be construed to permit marine or transportation policies to cover:
Code of Colorado Regulations 11
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspension or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This regulation shall become effective on September 1, 2012. Section 8 History New regulation 78-14, effective 1978.
Amended regulation effective July 1, 1993.
Amended regulation effective March 1, 1994.
Amended regulation effective January 1, 2006.
Amended regulation effective September 1, 2012.
Regulation 5-1-8 CONCERNING CLAIMS-MADE INSURANCE POLICIES Section 5 Rules Code of Colorado Regulations 12 Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of §10-1-109, C.R.S.
The purpose of this regulation is to establish standards for the training of all persons engaged in the sale or consultation of claims-made policies in compliance with §10-4-419(2)(g) or in adjusting claims under such policies, and to provide minimum disclosure standards for claims-made insurance policies. This regulation applies to casualty insurers writing policies on a claims-made basis. This regulation does not apply to persons engaged in the sale or consultation of surplus lines claims-made insurance policies or in adjusting claims under such policies.
A. "Claims-made coverage" means an insurance policy that provides coverage only if a claim is made during the policy period or any applicable extended reporting period. A claim made during the policy period could be charged against a claims-made policy even if the injury or loss occurred many years prior to the policy period. If a claims-made policy has a retroactive date, an occurrence prior to that date is not covered.
B. "Extended reporting period" means a period allowing for making claims after expiration of a claims- made policy. This is also known as a "tail".
C. “Occurrence coverage" means an insurance policy that provides liability coverage only for injury or damage that occurs during the policy term, regardless of when the claim is actually made. A claim made in the current policy year could be charged against a prior policy year, or may not be covered, if it arises from an occurrence prior to the effective date.
D. "Retroactive date" means the date on a claims-made policy which denotes the commencement date of coverage under the policy.
Section 5 Rules A. Training/Education
7 The two-hour claims-made policy training may be counted toward the twenty-four hour continuing education requirement of insurance producers.
B. Disclosure Form At the time of commencement of coverage either the insurer or the insurance producer shall execute a proof of delivery and acceptance of the disclosure form. The proof of delivery and acceptance shall be maintained in the insurer or producer file for at least two years beyond the term of the policy. In connection with the sale of any claims-made policy, the insurer shall give to the insured a disclosure statement substantially in the following form:
If you make a claim under your claims-made policy, the claim must be a demand for damages by an injured party and does not have to be in writing. Under most circumstances, a claim is considered made when it is received and recorded by you or by us. Sometimes, a claim may be deemed made at an earlier time. This can happen when another claim for the same injury or damage has already been made, or when the claim is received and recorded during an extended reporting period.
PRINCIPAL BENEFITS This policy provides for ______________ (insert brief description of coverage) up to the maximum dollar limit specified in the policy.
CAREFULLY REVIEW YOUR POLICY REGARDING THE AVAILABLE EXTENDED REPORTING PERIOD COVERAGE, INCLUDING THE LENGTH OF COVERAGE, THE PRICE AND THE TIME PERIOD DURING WHICH YOU MUST PURCHASE OR ACCEPT ANY OFFER FOR EXTENDED REPORTING PERIOD COVERAGE.
If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation is effective July 1, 2012.
Section 9 History Originally issued as Regulation 86-4, effective November 1, 1986. Re-codified as Regulation 5-1-8, effective June 1, 1992. Amended, effective October 1, 1996.
Amended, effective September 1, 2003.
Amended Regulation 5-1-8 effective July 1, 2012.
Regulation 5-1-9 REGULATION TO REQUIRE REPORTING OF FINANCIAL AND STATISTICAL DATA BY PROPERTY AND CASUALTY INSURANCE COMPANIES Section 2 Purpose Section 5 Examination of Statistical Agents Section 6 Filing of Statistical Plans by Statistical Agents Section 7 Statistical Plans and Reporting by Insurers Section 8 Statistical Agents’ Compliance with Statistical Handbook Code of Colorado Regulations 16 Section 9 Multiple Statistical Agents for the Same Line of Business Section 10 Edit and Control Procedures for Statistical Agents Section 11 Insurer Edit and Audit Procedures Section 12 Adoption of Changes to Statistical Handbook Section 13 Disclosure of Complying and Non-Complying Insurers Section 14 Access to Data Section 15 Disclosure of Data Section 16 Exemption Section 17 Lines of Insurance without a Statistical Agent Section 18 Severability Section 19 Incorporated Materials Section 20 Enforcement Section 21 Effective Date Section 22 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109, and 10-4-404(1), C.R.S.
Section 2 Purpose The purpose of this regulation is to set forth the manner of reporting data by insurers to statistical agents, to prescribe reports to be submitted by statistical agents to the commissioner, and to prescribe certain conduct in connection therewith. This regulation does not apply to data reported directly by insurers to the commissioner.
This regulation applies to property and casualty insurers writing insurance in the State of Colorado. This regulation does not apply to title insurance, reinsurance and ocean marine insurance.
A. “NAIC Statistical Handbook or Handbook” is a publication of the National Association of Insurance Commissioners (NAIC) which explains insurance statistical data and contains reporting requirements and report formats to be regularly furnished by statistical agents.
B. “Statistical agent” is an entity that has been designated by the commissioner to collect statistics from insurers and provide reports developed from these statistics to the commissioner for the purpose of fulfilling the statistical reporting obligations of those insurers. Code of Colorado Regulations 17 C. “Statistical plan” is a statistical agent’s system for collecting information from reporting insurers, including exposure, coverage, classification, territory, premium, loss and other information. Section 5 Examination of Statistical Agents To be designated to collect statistics from insurers for purposes of fulfilling the statistical reporting requirements of this rule, an entity other than a licensed advisory organization shall be subject to the same examination provisions as licensed advisory organizations. Section 6 Filing of Statistical Plans by Statistical Agents Every statistical agent shall file with the commissioner every statistical plan and every modification that it proposes to use to collect statistics to meet the requirements of this regulation. Section 7 Statistical Plans and Reporting by Insurers Every insurance company licensed in this state shall report its insurance statistical experience for lines of insurance covered by this regulation to a statistical agent designated by the commissioner. This data shall be submitted in accordance with statistical plans approved in accordance with Section 6 of this rule. Section 8 Statistical Agents’ Compliance with Statistical Handbook For every line of insurance wherein statistics are collected in this state, every statistical agent shall, at a minimum, collect statistics and file reports and compilations in the form and detail provided in the NAIC Statistical Handbook, 2004 edition, unless otherwise specified by the commissioner. Section 9 Multiple Statistical Agents for the Same Line of Business For lines of insurance where more than one statistical agent has been designated and collects statistics in this state, the statistical agents shall, if so directed by the commissioner, arrange to file combined reports for all statistical agents collecting data for the specified lines of insurance. The statistical agents may make arrangements among themselves for the equitable sharing of the costs to produce such combined reports.
Section 10 Edit and Control Procedures for Statistical Agents Statistical agents shall adopt, edit and control procedures to screen and check data required by this regulation for reasonableness, accuracy and completeness. These procedures shall, at a minimum, conform to the specifications provided in the NAIC Statistical Handbook, 2004 edition, unless otherwise specified by the commissioner.
Section 11 Insurer Edit and Audit Procedures Insurers shall adopt , edit and audit procedures to screen and check data required by this regulation to be reported to determine that such data meets the standards for reasonableness , accuracy , and completeness provided in the NAIC Statistical Handbook, 2004 edition, unless otherwise specified by the commissioner.
Section 12 Adoption of Changes to the Statistical Handbook Revisions to the Statistical Handbook shall apply upon the commissioner’s notification to insurers or statistical agents of the adoption of the revisions and their effective dates. Statistical agents shall notify insurers that report to them of any changes that affect data collection or the reporting activities of insurers.
Code of Colorado Regulations 18 Section 13 Disclosure of Complying and Non-Complying Insurers Statistical reports shall each contain a listing of insurers whose data are included. In addition, if data from an insurer or insurers that had agreed to have data included are, in fact, not included, then a listing of these insurers shall also be made with the statistical report as specified in the NAIC Statistical Handbook. For any insurer that is listed as not included in a statistical report, the statistical agent shall, upon the request of the commissioner, provide reasons for the exclusion. Section 14 Access to Data The commissioner shall have access to all statistical data that have been collected by statistical agents for the purpose of fulfilling the requirements of this regulation. Upon request by the commissioner, the statistical agent shall provide a copy of any report that it produces from data that the commissioner has required to be collected.
Section 15 Disclosure of Data All data submitted to the Commissioner shall be considered public and shall be open to inspection by the public, unless the information may be considered confidential pursuant to § 24-72-204, C.R.S. If the statistical agent desires confidential treatment of any information submitted, as required in this regulation, a “Confidentiality Index” must be completed. The Division will evaluate the reasonableness of any request for confidentiality and will provide notice to the insurer or statistical agent if the request for confidentiality is rejected.
Section 16 Exemption Upon application by a statistical agent or an individual insurer, the commissioner may allow the submission of a report or statistical data at a specified later date if the submission of the report or data on the date required by this regulation would create a substantial hardship on the statistical agent or insurer. In considering whether to grant such an exemption, the commissioner shall consider whether the delay is necessitated by an unusual or a one-time situation, or whether the delay is necessitated by a situation that is likely to reoccur. When the delay is necessitated by a situation that is likely to reoccur, the commissioner may condition the granting of an exemption on whether the insurer or statistical agent has a plan of action to address the situation in the future. Section 17 Lines of Insurance without a Statistical Agent Any licensed insurer writing any line of insurance not exempted in Section 3 of this regulation that finds or believes to have found that it is writing a line or type of insurance for which no statistical agent will accept data shall notify the commissioner of this fact as soon as practicable. Section 18 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 19 Incorporated Materials The NAIC Statistical Handbook or Handbook published by National Association of Insurance Commissioners shall mean the Handbook as published on the effective date of this regulation and does not include later amendments to or editions of the Handbook. A copy of the Handbook may be examined at any state publications depository library.
Section 21 Enforcement Code of Colorado Regulations 19 Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 22 Effective Date This regulation shall become effective on August 1, 2012. Section 23 History Original regulation effective May 1, 1988.
Repromulgated regulation effective August 1, 2012.
Regulation 5-1-10 RATE AND RULE FILING SUBMISSION REQUIREMENTS PROPERTY AND CASUALTY INSURANCE Section 5 Rules Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109, 10-3-1110, 10-4-110.7, 10-4-404, 10-4-404.5, and 10-11-118 C.R.S. The purpose of this regulation is to ensure that property and casualty insurance rates are not excessive, inadequate or unfairly discriminatory by establishing the requirements for rate and rule filings. This regulation contains annual rate filing requirements for homeowners and private passenger automobile insurance. These lines of business are specifically included in this regulation because these products are widely purchased by consumers. Annual rate filings, rather than other methods the Division of Insurance (Division) may use, are preferred because of the prospective nature of the information contained in rate filings. Since a company’s rates filed with the Division must be used until replaced by another rate filing, the Commissioner of Insurance cannot determine if rates included in prior rate filings continue to be appropriate for current or future economic conditions, or adequately reflect recent Colorado loss experience. Rate filings are reasonable and necessary means to ensure that current rates are appropriate and compliant with Colorado statutes and regulations.
Code of Colorado Regulations 20 This regulation applies to all rate filings submitted by companies operating in the state of Colorado as defined in Section 4. The following lines of business, however, are specifically excluded from the requirements of this regulation: reinsurance, ocean marine, life, health, surplus lines, insurers negotiating and entering into insurance coverage agreements with an exempt commercial policyholder and credit insurance subject to the requirements of Colorado Insurance Regulation 4-9-2.
A. “Classification System" or "Classification" means the plan, system, or arrangement for recognizing differences in exposure.
B. “Company” means all licensed property and casualty insurance companies, including an entity created pursuant to § § 8-45-101 and 8-45-117, C.R.S. It does not include captive insurance companies licensed under Article 6 of Title 10 or self-insurance pools licensed under Article 44 of Title 8, Section 115.5 of Article 10 of Title 24, or Section 102 of Article 13 of Title 29.
C. “Exempt Commercial Policyholder” shall have the same meaning as defined in Colorado Regulation 5-1-13, 4, C.
D. “Expense Multiplier” means the portion of the rate that includes provisions for expenses, other than loss adjustment expenses, profit and investment income.
E. “On-Rate Level Premium” is the premium that would have been generated if the present rates had been in effect during the entire period under consideration.
F. "Premium" means the amount of money charged a policyholder for an insurance policy.
G. "Prior Approval" is a filing procedure that requires a rate, rule, or loss cost change to be affirmatively approved by the Commissioner prior to distribution, release to producers, collection of premium, advertising, or any other use of the rate, rule, or loss cost.
H. “Qualified Actuary” is a person who meets the requirements of Colorado Insurance Regulation 1-1-1.
I. "Rate" means the cost of insurance per exposure unit. Rates must include an adjustment to account for expenses, profit, and variations in loss experience, but are prior to any application of individual risk variations based on loss or expense considerations.
J. "Rating Manual" means the rates, schedule of rates, rating plans, rating classifications, territories, rating rules, and any other information which the company uses to determine the final dollar charge for insurance coverage.
K. “Trend” or “Trending” means any procedure for projecting losses to the average date of loss, or of projecting premium or exposures to the average date of writing. Section 5 Rules All rate, rule, and loss cost filings shall be submitted electronically by licensed companies, rating organizations and advisory organizations (except for conditions provided by regulation). Failure to supply the information required in Subsections 5(A)(4), 5(A)(5), 5(A)(7), and 5(B)(4) of this regulation would render the filing incomplete. Incomplete filings will be rejected on or before the 15th business day after receipt. Incomplete filings are not reviewed for substantive content. All filings that are not returned on or before the 15th day after receipt will be considered complete. Filings may be reviewed for substantive content, and if reviewed, any deficiency will be identified and communicated to the filing insurer on or Code of Colorado Regulations 21 before the 30th business day after receipt. Correction of any deficiency, after the 30th business day, will be required on a prospective basis, and no penalty will be applied to a non willful violation identified in this manner. Nothing in this Section 5 shall render a rate filing subject to prior approval by the Division unless otherwise subject to prior approval as provided by statute.
A. Rate Filings General Requirements
B. Additional Rate Filing Requirements by Line The following subsections set forth the requirements by separate lines of insurance that must be complied with in addition to the above general requirements.
The qualified actuary must state an opinion as to whether the rates are excessive, inadequate or unfairly discriminatory.
C. Rule Filing General Requirements
Code of Colorado Regulations 27
D. Prohibited Practices The Division has determined that certain rating practices lead to excessive, inadequate or unfairly discriminatory rates and are unfair methods of competition and/or unfair or deceptive acts or practices in the business of insurance. Therefore, in accordance with § 10-3-1110(1), C.R.S., it is considered an unfairly discriminatory practice for a company to include, in any component of a rate, any amount intended to recover losses or expenses incurred in another state or jurisdiction due to any referendum, law or regulation which requires a general reduction in rates. This subsection shall not prohibit the use of national, regional or other industry data as a necessary and actuarially supportable supplement to Colorado data that is not fully credible. If any provision of this regulation or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the regulation and the application for such provision to other persons or circumstances shall not be affected thereby. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation is effective October 1, 2012.
Section 9 History Regulation 91-1, effective March 1, 1991.
Re-codified as Regulation 5-1-10 on June 1, 1992.
Regulation repealed and re-promulgated, effective February 1, 1999. Amended regulation, effective January 1, 2000.
Amended regulation, effective March 2, 2002.
Amended regulation, effective August 1, 2009.
Amended regulation, effective October 1, 2012.
Regulation 5-1-11 RISK MODIFICATION PLANS This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109, 10-4-401, 10-4-403, 10-4-404, and 10-4-408, C.R.S. Code of Colorado Regulations 28 The purpose of this regulation is to provide criteria for the modification of commercial property and casualty manual rates and to establish workers' compensation disclosure requirements. This regulation applies to all insurers writing commercial property and casualty insurance policies, including workers' compensation insurers, licensed to conduct business in this state and Pinnacol Assurance.
A. "Anniversary date" means the annual anniversary of the date of issue of a policy as shown in the policy declaration.
B. "Certified workers' compensation risk management program" means a program which meets the minimum standards outlined in Colorado Insurance Regulation 5-3-1 and is certified with a Cost Containment Certificate by the Colorado Cost Containment Board.
C. "Designated medical provider" means any physician, hospital, clinic or physician of a preferred provider organization network who meets all of the qualifications of a designated medical provider outlined in Regulation 5-3-1, which defines minimum risk management standards for cost containment certification.
D. "Experience rating plan" means any rating plan or system wherein a manual rate for insurance is adjusted or modified based on the past loss experience of the insured.
E. "Improved workers’ compensation loss experience for experience or schedule rated insured business entities" means lower frequency and severity of losses for the last policy period as compared with frequency and severity of losses within the immediate prior policy period. If loss experience is not available for the complete last policy year, losses must be compared for equal periods of time (eight months vs. eight months, ten months vs. ten months, etc.). Whether the risk management program certification credit applies and whether the business entity’s loss experience has improved shall be determined by the insurer prior to granting the cost containment credit. The Colorado Cost Containment Board reviews the business entity’s loss record for the purpose of certification of the risk management program only.
F. "Initial certification date" means the date the risk management program of a business entity is initially certified by the Colorado Cost Containment Board. A risk management program that meets the risk management standards of Colorado Insurance Regulation 5-3-1 shall be initially certified one year after the implementation of the program by the business entity.
G. "Initial effective date of the premium dividend resulting from the implementation of a risk management program" means the annual anniversary date of a workers' compensation policy immediately after the risk management program has been certified by the Colorado Cost Containment Board. If the annual anniversary date is within thirty (30) days of the date a risk has been certified, a grace period for the application of a premium dividend is allowed. However, a grace period, when allowed, must be applied consistently.
H. "Manual rate" means a rate designed to apply on a generic basis to similar risks within the same class, filed by an insurer or rating/advisory organization with the Division of Insurance and made part of the rating manual used by an insurer or rating/advisory organization. Code of Colorado Regulations 29 I. "Payroll" means the remuneration paid or payable by the business entity for services of employees. Remuneration is money or substitutes for money including commissions, bonuses, extra pay for overtime, pay for vacations, holidays and sickness, statutory insurance or pension plans, payments for piece work, allowances for tools, the rental value of an apartment, and the value of lodging and meals.
J. "Premium Differential" means an adjustment to the workers' compensation premium when the insured business entity has selected a designated medical provider.
K. "Premium dividend resulting from the implementation of a risk management program" means the credits allowed for business entities which implement a risk management program and comply with the standards established by Colorado Insurance Regulation 5-3-1 and the business entity's loss experience under the risk management program indicates that such premium dividend is warranted.
L. "Premium dividend resulting from rehiring previously injured employees" means the credit arrived at for employers who rehire previously injured employees who sustained permanent partial disabilities.
M. "Rate modification plan" (commonly called Schedule Rating Plan or Individual Risk Premium Modification Plan) means a rating plan or procedure which provides a listing of various risk characteristics or conditions and a range of modification factors which may be applied for these characteristics or conditions to the manual rate of a particular insurance risk. The effect of the modification factor is to increase (debit) or decrease (credit) the manual rate. Rate modification plans exclude merit rating plans and retrospective rating plans.
N. "Rehired employee with permanent partial disabilities" means an employee who sustained permanent partial disabilities and is reemployed by the same employer, not a successor, at the pre-injury wages including any wage increases to which such employee would have been entitled had the employee not been injured.
O. "Renewal date of premium dividend" means each annual anniversary date of a workers' compensation insurance policy after the initial effective date of the premium dividend. Section 5 Rules A. Rate Modification Plans Rate modification plans, justified according to the standards herein, are permitted. However, the commissioner has determined that the use of unjustified rate modification plans is not reasonable, is not objective and is unfairly discriminatory. Therefore, the use of unjustified rate modification plans in rating of commercial property and casualty insurance risks located in Colorado is prohibited.
B. Experience Rating Plans Experience rating plans shall be calculated from at least three complete years of premium or payroll and loss data, except if a lesser time period has been approved by the Commissioner. Experience rating plans cannot be calculated with estimated premiums or payroll. Premium or payroll and loss figures used in the calculation must be verifiable and justifiable.
C. Workers' Compensation Cost Containment Certification and Selection of Designated Medical Provider disclosure Code of Colorado Regulations 31 All workers' compensation insurers, including Pinnacol Assurance, shall disclose the availability of cost containment certification by the Colorado Workers' Compensation Cost Containment Board and the potential premium savings on the face of the insurance policy or in a separate disclosure form attached as an addendum to the policy. Such disclosure applies regardless of whether or not a risk is experience or schedule rated. Insurers shall require that the insured business entity indicate on a form developed by the insurer, that the business entity is aware of the possible premium dividend if the business entity’s risk management program is certified by the Colorado Cost Containment Board. This form shall be made part of the insured business entity’s underwriting file.
D. Premium Dividend for Certified Risk Management Programs Insured Business Entities Qualifying for Experience and/or Schedule Rating: If an insured business entity qualifies for experience and/or schedule rating under its workers' compensation insurance and the insured business entity has implemented a certified workers' compensation risk management program, the insurer must allow a 5% premium dividend if the loss experience has improved since the last renewal date of workers' compensation insurance. The premium dividend shall be in addition to the maximum schedule rating deviation of 25%. The schedule rating and cost containment discounts shall be applied multiplicatively. Therefore, the maximum schedule rating credit (0.75) multiplied by the cost containment certification premium dividend (0.95) cannot exceed 28.75%.
Code of Colorado Regulations 32 0% If the insured business entity had more than three medical losses and one claim for loss of time in the last year immediately preceding the effective date of the premium dividend.
Individual underwriting files must contain a copy or electronic record of the insured business entity's Colorado Cost Containment Certificate and historical and current loss statistics, or credible evidence available from the Colorado Division of Workers’ Compensation that such entity qualifies and has received cost containment certification. Any other rating plan which incorporates the characteristics of the plan for "premium dividend" as defined in this regulation, may be substituted for the plan for premium dividend. However, under no circumstance, can such a substitute rating plan allow for credits already reflected in the rates.
E. Premium Differential for Selection of Designated Medical Provider All workers' compensation insurers, including Pinnacol Assurance, must allow a credit of 2.5% as a premium differential of the workers' compensation insurance premium if the insured business entity has selected a designated medical provider. If an insured business entity is eligible for schedule rating, the 2.5% credit must be included in the total schedule credit or debit, subject to the 25% maximum limitation.
F. Workers' Compensation Premium Dividend for Employing Previously Injured Employees with Permanent Partial Disabilities The workers' compensation premium dividend applies to all workers' compensation policies with large or small premiums, except policies subject to minimum premiums. The dividend shall be calculated annually after a policy has expired and shall apply to the premium developed from the payroll of the rehired injured employees who sustained permanent partial disabilities (payroll of rehired employees x manual rates x ratio of rehired employees with permanent partial disabilities to injured employees with permanent partial disabilities). This premium shall be subject to all risk modification credits or debits otherwise applicable under the policy. If any employee is rehired during a policy period or was not rehired for the total policy term, the rehired employee shall be considered as being rehired for the total annual policy period or term. The workers' compensation premium dividend applies to all policies which expire on or after March 1, 1993 and all renewal policies thereafter as long as an injured employee who sustained permanent partial disabilities remains with the same employer. In calculating the premium dividend, insurers shall use the following formula:
Code of Colorado Regulations 33 (R / I) (P) = D If (R / I) is greater than 10%, (R / I) = 10% Assumptions:
P = The actual payroll of reemployed injured employees who sustained permanent partial disabilities multiplied by the manual rate for the classification of the reemployed injured employees. If employees fall into different manual rate classifications, payroll of each employee should be multiplied by the appropriate manual rate. The sum of these would equal P.
D = Amount of premium dividend subject to a maximum of 10% annually. The premium dividend shall be adjusted annually based on the number of injured employees who sustained permanent partial disabilities rehired within the given policy period.
G. Reporting of Pertinent Information Upon the request of the commissioner, an insurer to which this regulation applies, shall submit data to the commissioner establishing the relationship of the aggregate premiums actually charged policyholders by the insurer for each line of commercial insurance to the aggregate premium that would have been produced by the insurer's filed unmodified rates for that line of commercial insurance. A rating/advisory organization may file the data on behalf of the insurer.
H. Rate Compliance Examinations To determine compliance with this regulation the commissioner may order a compliance examination be made of any insurer to which this regulation applies.
I. Filing of Rate Modification Plans Each insurer to which this regulation applies, shall file its rate modification plan (Schedule Rating Plan), its plan for premium dividend or its substitute plan, and the premium differential for the selection of a designated medical provider prior to implementation with the Division of Insurance. If any provisions of this regulation or its application to any person or circumstances are for any reason held to be invalid, the remainder of the regulation shall not be affected in any way. Noncompliance with this Regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of insurance licenses. Code of Colorado Regulations 34 This amended regulation is effective on June 1, 2012.
Section 9 History New regulation 88-3, effective 1988 Amended regulation 91-4, effective May 1, 1991.
Re-codified as regulation 5-1-11, effective January 1, 1992. Amended as regulation 5-1-11, effective March 1, 1993.
Amended as regulation 5-1-11, effective April 1, 1997.
Amended as regulation 5-1-11, effective May 1, 2003.
Amended regulation effective June 1, 2012.
Regulation 5-1-12 CONCERNING WARRANTIES AND SERVICE CONTRACTS Section 5 Rules Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-108(8) and 10-1-109, C.R.S.
The purpose of this regulation is to establish a distinction between a written agreement that is an insurance contract pursuant to § 10-1-102(12), C.R.S. and a written agreement that meets the definition of a written warranty or service contract and is not subject to regulation by the Division of Insurance (Division).
The Division has received numerous inquiries regarding contracts which may be insurance and are sold as warranties or service contracts. The definitions and rules contained herein set forth certain conditions which will cause a contract to be considered a contract of insurance, and thereby regulated by the Division, and warranty contracts and service contracts which may not be regulated unless specifically addressed in the Colorado statutes, rules and regulations. Code of Colorado Regulations 35 This regulation applies to written agreements in which services are promised to be rendered or the purchaser of property, personal or real, is guaranteed repair, replacement or indemnification for such repair or replacement of the property on the discovery of defects, loss, or damage to the property during a specified or unlimited period of time after purchase.
This regulation applies to written agreements which provide a benefit including but not limited to, prepaid legal, accounting, or other services.
This regulation shall not apply to contracts issued as warranties and/or service contracts regulated by § § 42-10-103, et. seq., 42-11-101, et. seq. and 12-61-602, et. seq., C.R.S. This regulation shall not apply to written agreements providing health benefits or health service plans. For the purposes of this regulation:
A. "Closed panel" means an individual or a group of providers which are linked by ownership or contract arrangements to the issuer of the contracts.
B. "Contract" means a written agreement for consideration.
C. "Indemnify" means to make compensation for damage, loss, or injury suffered.
D. "Service contract" means a contract whereby specified or designated services are obligated to be performed over a fixed period of time or for a specified duration.
E. "Supplier" means the manufacturer, wholesaler or retailer of a product or thing being sold and warranted or guaranteed.
F. "Written warranty" means
A. Has a closed panel of providers who agree to provide all the services promised to any contract holder of the plan;
Code of Colorado Regulations 36 B. The closed panel must be responsible for providing services whether or not the issuer, which collects the dues and pays the providers, becomes bankrupt or otherwise ceases to function in the anticipated manner;
C. The closed panel of providers must have a factual and realistic capability to provide all the services obligated to the contract holder; and D. There must be no indemnification contracted for by either the administrative unit or the providers of the plan for services or risk contingencies performed by any other entity outside the closed panel. The issuer of these contracts may be the supplier, an individual, entity or association. Associations may issue service contracts only if the association is solely comprised of members who will provide the services.
A written agreement issued by the supplier of a product which meets the definition of a written warranty under this regulation is not a contract of insurance. Any other person who issues a written warranty, promise or contract to a product buyer for consideration is engaged in the business of insurance. A contract which agrees or promises to indemnify the purchaser directly or promises to indemnify others for providing such agreed upon services and meets the definition of insurance as set forth in § 10-1- 102(12), C.R.S., is a contract of insurance.
If a written agreement is such that any part of the agreement is considered to be a contract of insurance, then the entire agreement shall be considered to be a contract of insurance. A written agreement which would otherwise be considered a contract of insurance with the exception of not having charged an explicit consideration, is a contract of insurance if there is any consideration received through other provisions or related agreements. If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Non compliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation is effective April 1, 2013.
Section 9 History Regulation 91-9 was effective August 1, 1991.
Regulation 91-9 was repealed and replaced by Regulation 5-1-2, effective July 1, 1993. Regulation 5-1-12 was amended, effective January 1, 2002. Regulation 5-1-12 was amended, effective June 1, 2012.
Code of Colorado Regulations 37 Regulation 5-1-12 was amended, effective April 1, 2013. Regulation 5-1-13 EXEMPTIONS FROM RATE AND FORM FILING REQUIREMENTS FOR INSURERS PROVIDING COVERAGE TO EXEMPT COMMERCIAL POLICYHOLDERS Section 5 Rules Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109 and 10-4-1402, C.R.S.
The purpose of this regulation is to establish and implement rules concerning the definition and qualifications of an exempt commercial policyholder, the definition and qualifications of a risk manager, disclosure requirements for persons claiming status as exempt commercial policyholders, disclosure requirements for policies of Type II insurance issued to exempt commercial policyholders, and the data, documents, reports and other information to be maintained by insurers who are authorized to issue Type II insurance to exempt commercial policyholders. This regulation is made necessary by enactment into law of Colorado House Bill 99-1310, which requires the Commissioner to promulgate rules necessary to implement and administer § 10-4-1401 et. seq., C.R.S.
This regulation shall apply to all insurers authorized to issue Type II insurance (as defined below in Section 4.G.) to exempt commercial policyholders.
A. "Affiliated group" means two or more persons who are owned or controlled, directly or indirectly, by one of the constituent members of the group. As used in this definition, the term "controlled" means possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, or otherwise.
B. "Anti-competitive conduct" means engaging in, attempting to engage in, or threatening to engage in any conduct to monopolize or attempt to monopolize or to unreasonably restrain trade or commerce, or to combine or conspire with any other person to monopolize or attempt to Code of Colorado Regulations 38 monopolize or to unreasonably restrain trade or commerce in any part of the business of insurance.
C. "Exempt commercial policyholder" means any person who applies for or procures any kind of Type II insurance, except any purchaser of title insurance, through the use of a risk manager employed or retained by such person, and who meets at least one of the following qualifications:
D. "Person" has the same meaning set forth in § 2-4-401(8), C.R.S.
E. "Policyholder" means an exempt commercial policyholder.
F. "Risk manager" means an employee of the exempt commercial policyholder, or a third-party consultant retained by the policyholder who provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and the purchase of insurance, and who possesses at least one of the following credentials:
Code of Colorado Regulations 39
G. "Type II insurance" means insurance regulated by open competition between insurers, including fire, casualty, inland marine, and all other kinds of insurance subject to Part 4, Article 4, Title 10, C.R.S., but excluding insurance classified as Type I insurance by § 10-4-401(3)(a), C.R.S. Section 5 Rules A. Disclosure Requirements
B. Requirements for Maintaining Data, Documents, Reports, and Other Information
This regulation shall become effective on November 1, 2012. Section 9 History New Regulation effective January 15, 2000.
Amended Regulation effective August 1, 2006.
Amended Regulation effective November 1, 2012.
Regulation 5-1-14 PENALTIES FOR FAILURE TO PROMPTLY ADDRESS PROPERTY AND CASUALTY FIRST PARTY CLAIMS Code of Colorado Regulations 41 Section 4 Rules Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History This regulation is promulgated and adopted by the Commissioner of Insurance pursuant to § § 10-1-109 and 10-3-1110, C.R.S.
The purpose of this regulation is to describe the procedure and circumstances under which penalties will be imposed for failure to make timely decisions and/or payment on first party claims. This rule shall apply to all insurers authorized to write property and casualty insurance in the state of Colorado.
Section 4 Rules A. Timely Decisions and Payment of Benefits
B. Reasonable Investigation
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This regulation shall become effective on September 1, 2012. Section 8 History New regulation 5-1-14 effective May 1, 2001.
Amended regulation effective December 1, 2001.
Amended regulation effective February 1, 2004.
Amended regulation effective September 1, 2012.
Regulation 5-1-15 NOTIFICATION TO ADDITIONAL INSUREDS WHOSE INTERESTS ARE AFFECTED BY A CLAIM UNDER A GENERAL LIABILITY POLICY Code of Colorado Regulations 45 Section 5 Rules Section 9 History This regulation is promulgated pursuant to § § 10-1-109 and 10-1-131, C.R.S. The purpose of this regulation is to implement rules concerning notification to additional insureds whose interests are affected by a claim on a general liability policy. This regulation shall apply to all insurers authorized to issue general liability policies in the state of Colorado.
A. “General liability policy” means any insurance policy that provides insurance against negligent acts or omissions related to any contractor or completed operations activity.
B. “Additional insured by endorsement” means a person or entity that is named on an endorsement to the general liability policy.
C. “Reasonable period of time” means within ninety (90) calendar days after a liability claim is received, provided the insurer is able to identify the additional insured by endorsement based on a review of the records of the insurance company or information obtained from the named insured. Section 5 Rules Notice Requirements A. An insurer shall notify any additional insured by endorsement on a general liability policy, whose interests are affected by a liability claim, of the results of the insurer's investigation of such claim and the status of the claim within a reasonable period of time.
B. Notice to the additional insured of the results of the insurer's investigation of the claim and the status of the claim shall be satisfied by providing:
Code of Colorado Regulations 46
C. A statement of the applicable policy language shall be a sufficient statement of an insurer's reason for denial of coverage.
D. In the event a copy of the reservation of rights letter has been sent to the additional insured by endorsement pursuant to subparagraph 3, and coverage is subsequently confirmed or denied, notice pursuant to subparagraphs 1 or 2 shall be given within ninety (90) days after such coverage determination.
E. This regulation shall not apply to claims under a general liability policy upon which a lawsuit has been filed.
If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation is effective August 1, 2012.
Section 9 History New Regulation, effective May 1, 2001.
Amended Regulation, effective January 1, 2007.
Amended Regulation, effective August 1, 2012.
Regulation 5-1-16 Repealed effective 02/01/2005 Repealed effective 02/01/2005 Regulation 5-1-17 AVAILABILITY OF FIRE INSURANCE DURING WILDFIRES Section 5 Rules Code of Colorado Regulations 47 Section 9 History This regulation is promulgated under the authority of § § 10-1-109 and 10-4-110.9(4), C.R.S. The purpose of this regulation is to provide a rule to implement standards concerning the availability of fire insurance during wildfires within a federally designated disaster area in Colorado. This rule shall apply to all insurers a uthorized to write property insurance in the state of Colorado.
A. “Fire insurance policy” means a policy of insurance on real or personal property, which includes non- commercial dwelling fire, homeowners, tenant homeowners, or mobile homeowners.
B. “Immediately threatened area” means an area located within a federally designated disaster area, because of wildfires, based on such property’s zip code, county location, or distance from any wildfire. Absent a written determination by a government official, or a determination otherwise published by a government official, of the area defined as an immediately threatened area, such term shall mean the area under a lawful order to evacuate or an area under a lawful pre- evacuation order.
C. “Reasonable actions to reduce the risk of fire” means underwriting requirements, which may include, but are not limited to:
Section 5 Rules A. Insurers shall not refuse to issue a fire insurance policy for a property based on the property’s zip code, county location, or distance from any wildfire, unless the property is located in an immediately threatened area.
B. Insurers shall not refuse to renew a fire insurance policy for a property located within an immediately threatened area for any reason that is related to existing wildfires.
C. Insurers, as a condition of renewal, may require a property owner to take reasonable actions to reduce the risk of fire to such property. Such reasonable actions to reduce the risk of fire shall be specified in the insurer’s written underwriting guidelines. Code of Colorado Regulations 48 If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
New regulation effective March 2, 2003.
Amended regulation effective September 1, 2012.
Section 9 History New regulation effective March 2, 2003.
Amended regulation effective September 1, 2012.
Regulation 5-1-18 CONCERNING THE ELEMENTS OF CERTIFICATION FOR CERTAIN PROPERTY AND CASUALTY, CREDIT, AND EXCESS LOSS FORMS AND CONTRACTS Section 5 Rules Section 6 Readability Section 7 Severability Section 8 Enforcement Section 9 Effective Date Section 10 History This regulation is promulgated pursuant to § § 10-1-109, 10-3-1110, 10-4-419, 10-4-633, 10-4-633.5, 10- 10-109, and 10-16-119, C.R.S.
Code of Colorado Regulations 49 The purpose of this regulation is to promulgate rules applicable to the filing of property and casualty and credit forms and contracts that include, but are not limited to, the Family Medical Leave Act (FMLA), unemployment, credit property, excess loss insurance new policy forms, new policy form listings, annual reports of policy forms, and certifications of policy forms. This regulation applies to all insurers and other entities authorized to conduct business in Colorado who are required to fully execute and file a certification form and complete the Form Schedule Tab in the System for Electronic Rate and Form Filings (SERFF). This includes insurers and authorized entities which provide one or more of the following products: private passenger automobile insurance; commercial automobile insurance with the "individually-owned private passenger automobile-type" endorsement; claims-made liability insurance; credit insurance; and excess loss insurance used in conjunction with self-insured employer benefit plans under the federal "Employee Retirement Income Security Act" (ERISA). This regulation replaces Emergency Regulation 13-E-04 in its entirety.
A. "Annual Report for claims-made liability insurance" means, for the purposes of this regulation, the completion of the Form Schedule Tab in SERFF, including the documents and information listed in section 5.K. of this regulation.
B. "Annual Report for commercial automobile with individually-owned private passenger automobile-type" endorsement means, for the purposes of this regulation, the completion of the Form Schedule Tab in SERFF, including the documents and information listed in section 5.L. of this regulation.
C. "Annual Report for credit insurance" means, for the purposes of this regulation, the completion of the Form Schedule Tab in SERFF, including the documents and information listed in section 5.M. of this regulation.
D. "Annual Report for private passenger automobile insurance" means, for purposes of this regulation, the completion of the Form Schedule Tab in SERFF, including the documents and information listed in section 5.N. of this regulation.
E. "Certification of compliance" means, for the purposes of this regulation, the form that contains the necessary elements of certification, as determined by the commissioner, which has been signed by the designated officer of the insurer.
F. "Certification of compliance for excess loss insurance" means, for the purposes of this regulation, a certification form, which contains the elements of certification as determined by the commissioner, signed by a designated officer of the insurer, and used in conjunction with self- insured employer benefit plans under ERISA.
G. "Credit insurance" for the purposes of this regulation shall have the same meaning set forth in § 10- 10-103(2), C.R.S.
H. "Effective date" means, for the purposes of this regulation, the effective date listed in the General Information Tab of SERFF.
I. "Excess loss insurance" means, for the purposes of this regulation, the excess loss insurance provided in conjunction with self-insured employer benefit plans under ERISA, and that complies with the requirements set forth in § 10-16-119, C.R.S.
J. "Licensed insurer" means, for the purposes of this regulation, any authorized organization that provides private passenger automobile insurance, commercial automobile insurance with the Code of Colorado Regulations 50 "individually-owned private passenger automobile-type" endorsement, claims-made liability insurance, credit insurance, and excess loss insurance.
K. "Listing of New Policy Forms for claims-made liability insurance" shall mean completing the Form Schedule Tab in SERFF, including the documents and information listed in section 5.O. of this regulation.
L. "Listing of New Policy Forms for commercial automobile with individually-owned private passenger automobile-type" endorsement shall mean completing the Form Schedule Tab in SERFF, including the documents and information listed in section 5.P. of this regulation.
M. "Listing of New Policy Forms for credit insurance" shall mean completing the Form Schedule Tab in SERFF, including the documents and information listed in section 5.Q. of this regulation.
N. "Listing of New Policy Forms for excess loss insurance" shall mean completing the Form Schedule Tab in SERFF, including the documents and information listed in section 5.R. of this regulation.
O. "Listing of New Policy Forms for private passenger automobile insurance" shall mean completing the Form Schedule Tab in SERFF, including the documents and information listed in section 5.S. of this regulation.
P. "Officer of an insurer" means, for the purposes of this regulation, the president, vice president, assistant vice president, corporate secretary, assistant corporate secretary, chief executive officer (CEO), chief financial officer (CFO), general counsel, or actuary who is also a corporate officer, or any officer appointed by the board of directors.
Q. "Signature" includes an electronic signature as defined in § 24-71.3-102, C.R.S. Section 5 Rules A. At least thirty-one (31) days prior to using any new form (except excess loss insurance forms, which may be filed concurrently), each insurer subject to the provisions of this regulation must file a certification of compliance form in a format prescribed by the commissioner, and complete the Form Schedule Tab in SERFF.
B. Excess loss insurance form certifications are to be filed prior to, or concurrently with, the use of the form by each insurer subject to the provisions of this regulation. This filing must include a certification of compliance form in a format prescribed by the commissioner and a completed Form Schedule Tab in SERFF. Excess loss insurance form filings require the actual forms to be submitted in the Form Schedule Tab.
C. An annual report of policy forms must be filed no later than July 1 of each year. These annual reports will consist of a completed Form Schedule Tab in SERFF, and must include a certification of compliance. The filing will include the readability score where required by law. The following entities must complete and submit this report:
Code of Colorado Regulations 51 D. Excess loss insurance used in conjunction with ERISA does not require the filing of an annual report of policy forms.
E. Certification requirements.
F. If the individual signing the certification is not an officer of an insurer as defined in Section 4.P, documentation must be included that shows that this individual has been appointed as an officer of the organization by the board of directors. This documentation is to be submitted with every filing.
G. If an insurer uses the optional method of electronic dissemination of newly issued or renewed policy forms or endorsements, the insurer must comply with Colorado’s Uniform Electronic Transaction Act (UETA) § 24-71.3-101 et seq., C.R.S. UETA guidance is provided by the Colorado Office of Information Technology and the Colorado Division of Insurance.
H. All filings submitted in SERFF, which is the format prescribed by the commissioner, must have the Form Schedule Tab completed with the form name, unique form number for new policies, edition date, form type, action, action specific data, and the readability score, where required by law. Only the Colorado Private Passenger Automobile Insurance Summary Disclosure Form and the excess loss forms must be attached to filings.
I. If an "individually-owned private passenger automobile-type" endorsement is attached to a commercial automobile insurance policy, the filing and certification requirements of Part 6 of Article 4, Title 10, C.R.S., apply to the policy forms, endorsements, and cancellation notices. The certification requirements also apply to renewal notices, disclosure forms, notices of proposed premium increases, notices of reductions in coverage, and any other such forms as requested by the commissioner, that are currently in use and issued or delivered, or intended to be used and issued or delivered, to any policyholder in Colorado, and that are used, or intended to be used, with any commercial automobile insurance policy.
J. If an "individually-owned private passenger automobile-type" endorsement is attached to a commercial automobile insurance policy, the insurer must comply with all of the private passenger automobile certification requirements.
K. In order to file an "Annual Report for claims-made liability insurance" the insurer must complete the Form Schedule Tab in SERFF. The report must also include all claims-made liability insurance policy forms, endorsements, disclosure forms, and evidence of coverage currently in use and issued or delivered to any policyholder in Colorado. Attaching the actual forms is not required.
L. In order to file an "Annual Report for commercial automobile insurance with individually-owned private passenger automobile-type" endorsement, the insurer must complete the Form Schedule Tab in SERFF. The report must include all commercial automobile policy forms, endorsements, cancellation notices, renewal notices, disclosure forms, notices of proposed premium increases, notices of reductions in coverage, and any other such forms as requested by the commissioner currently in use, and issued or delivered to any policyholder in Colorado. Attaching the actual forms is not required.
Code of Colorado Regulations 53 M. In order to file an "Annual Report for credit insurance" the insurer must complete the Form Schedule Tab in SERFF. The report must also include all credit insurance policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders issued or delivered to any policyholder in Colorado. Attaching the actual forms is not required.
N. In order to file an "Annual Report for private passenger automobile insurance" the insurer must complete the Form Schedule Tab in SERFF. The report must include all private passenger automobile policy forms, endorsements, cancellation notices, renewal notices, disclosure forms, notices of proposed premium increases, notices of reductions in coverage, and any other such forms as requested by the commissioner currently in use, and issued or delivered to any policyholder in Colorado. The readability score must be included where required by law. Only the Colorado Private Passenger Automobile Insurance Summary Disclosure Form must be attached in SERFF.
O. In order to file a "Listing of New Policy Forms for claims-made liability insurance" the insurer must complete the Form Schedule Tab in SERFF. The listing must include any new claims-made liability insurance policy forms, certificates, contracts of insurance, or any portion thereof which provides coverage on a claims-made basis that is issued or delivered to any policyholder in Colorado. Attaching the actual forms is not required, but the information required in H. of this section must be included.
P. In order to file a "Listing of New Policy Forms for commercial automobile insurance with individually- owned private passenger automobile-type" endorsement, the insurer must complete the Form Schedule Tab in SERFF. The listing must include any new commercial automobile policy forms, endorsements, cancellation notices, renewal notices, disclosure forms, notices of proposed premium increases, notices of reductions in coverage, and any other such forms as requested by the commissioner issued or delivered to any policyholder in Colorado. Attaching the actual forms is not required, but the information required in H. of this section must be included.
Q. In order to file a "Listing of New Policy forms for credit insurance" the insurer must complete the Form Schedule Tab in SERFF. The listing must include all policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders delivered or issued for delivery to any policyholder in Colorado. Attaching the actual forms is not required, but the information required in H. of this section must be included.
R. In order to file a "Listing of New Policy forms for excess loss insurance," the insurer must complete the Form Schedule Tab in SERFF. The listing must include, and have attached, all new policy forms issued or delivered to any policyholder in Colorado, including the actual excess loss forms. The information required in H. of this section must also be included.
S. In order to file a "Listing of New Policy Forms for private passenger automobile insurance" the insurer must complete the Form Schedule Tab in SERFF. The listing must include any new private passenger automobile policy forms, endorsements, cancellation notices, renewal notices, disclosure forms, notices of proposed premium increases, notices of reductions in coverage, and any other such forms as requested by the commissioner, issued or delivered to any policyholder in Colorado. The readability score must be included where required by law. Only the Colorado Private Passenger Automobile Insurance Summary Disclosure Form must be attached in SERFF, but the information required in H. of this section must be included for all listed forms. Section 6 Readability A. Effective January 1, 2012, insurers writing private passenger automobile insurance policies must include the Flesch-Kincaid grade level or the Flesch Read Ease score in each electronic filing. The Flesch-Kincaid grade level must not exceed the tenth grade level. The Flesch Read Ease score must not be less than 50.
Code of Colorado Regulations 54 B. Insurers may choose either the Flesch-Kincaid grade level formula or the Flesch Read Ease formula to generate a readability score. However, once a formula has been selected from these two (2) formulas, the selected formula must be used consistently for all text being scored for that particular policy.
C. At the option of the insurers, riders, endorsements, applications, and other forms made a part of the policy, may be scored either as a separate form or as part of the policy with which they will be used.
D. For the purposes of the readability score, only forms that are made part of the policy are required to comply with the readability score. Cancellation notices, renewal notices, disclosure forms, and notices of reductions in coverage do not require a readability score.
E. Readability scores are not required for commercial automobile insurance coverage.
F. Readability scores are not required for claims-made insurance coverage. Section 7 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 8 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 9 Effective Date This regulation shall become effective on October 1, 2013. Section 10 History Originally issued as Emergency Regulation 92-1, effective July 22, 1992. Final Regulation 1-1-6 effective June 1, 1994.
Amended Regulation 1-1-6 effective February 1, 2002.
Amended Regulation 1-1-6 effective June 1, 2003.
Sections 1, 2, 3, 8 and 9 amended effective February 1, 2004. Amended Regulation effective January 1, 2012.
Regulation 5-1-18 effective October 1, 2013.
Regulation 5-2-1 [Repealed eff. 06/01/2012.] Regulation 5-2-2 CONCERNING RENEWAL OF AUTOMOBILE INSURANCE POLICIES – EXCLUDED NAMED DRIVERS Code of Colorado Regulations 55 Section 4 Rules Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109(1) and 10-4-601.5, C.R.S.
The purpose of this regulation is to require each renewal policy of automobile insurance to disclose excluded named drivers as applicable.
This regulation applies to all complying policies of automobile insurance. Section 4 Rules Each insurer renewing a complying policy of automobile insurance as defined in § 10-4-601(2), C.R.S., which policy excludes a named driver under the provisions of § 10-4-630, C.R.S., shall by conspicuous printed notice re-notify the named insured at the time of each policy renewal. Failure to so re-notify the named insured of an excluded driver at the time of policy renewal shall make such exclusion void for all policy coverage.
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This regulation shall become effective on July 1, 2012. Section 8 History Originally issued as Regulation 78-9, effective June 11, 1979. Code of Colorado Regulations 56 Re-codified as Regulation 5-2-2, effective June 1, 1992. Regulation Amended, effective May 1, 2003.
Regulation Amended, effective February 4, 2004.
Regulation Amended, effective February 1, 2006.
Amended Regulation 5-2-2, effective July 1, 2012.
Regulation 5-2-3 Repealed Effective 06/01/2012 Regulation 5-2-5 Repealed Effective 06/01/2012 Regulation 5-2-6 Repealed Effective 06/01/2012 Regulation 5-2-7 Repealed Effective 06/01/2012 Regulation 5-2-8 TIMELY PAYMENT OF PERSONAL INJURY PROTECTION BENEFITS Section 4 Rules Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History This regulation was originally promulgated by the Commissioner of Insurance pursuant to § § 10-1-109, 10-4-704, 10-4-708 (1.3) (effective until July 1, 2003 except for claims incurred under policies lawfully in effect as described in this regulation), and 10-3-1110(1), C.R.S. This Regulation is being amended under the authority of § 10-1-109, C.R.S.
The purpose of this amended regulation is to update the regulation to include only those provisions that govern the continued handling of claims under § § 10-4-701, C.R.S., et seq., as in effect on June 30, 2003. Additionally, the regulation sets forth the requirements for establishing proof of the fact and amount of expenses incurred, provides for notices by insurers, and makes certain acts of insurers presumptive unfair or deceptive acts or practices.
The Colorado Reparations (No-Fault) Act was repealed effective July 1, 2003. Automobile insurance policies with personal injury protection (PIP) benefits issued or renewed prior to July 1, 2003 will continue Code of Colorado Regulations 57 to incur PIP claims until such benefits do not apply any longer. This regulation applies to claims occurring under No-Fault policies issued prior to July 1, 2003.
Section 4 Rules A. Prompt Investigation of PIP Claims.
B. Prompt Payment of PIP Benefits.
C. Requirements Establishing Proof of the Fact and Amount of Expenses Incurred.
D. Notice Requirements.
E. Unfair Method of Competition and Unfair or Deceptive Acts of Practices in the Business of Insurance.
Code of Colorado Regulations 59
F. Records of Health Care Providers and Policy Contract Compliance. Nothing herein shall preclude an insurer from requesting or obtaining medical records from a health care provider or to negate a contractual requirement that an injured party comply with a valid condition in the policy regarding eligibility for receipt of benefits.
G. Documentation The claim file documentation required by this regulation will be reviewed by the Division of Insurance during an investigation of a complaint or during a market conduct examination to determine if the requirements of § §10-4-708(1) and 10-3-1104 (1) (h), C.R.S. have been met. Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This amended regulation shall become effective on September 1, 2012. Section 8 History Code of Colorado Regulations 60 New regulation effective November 1, 1997.
Amended regulation effective September 1, 2000.
Amended regulation effective February 1, 2004.
Amended regulation effective September 1, 2012.
Amended Regulation 5-2-9 - Personal Injury Protection Examination Program Section 2 Background and Purpose Section 3 Applicability and Scope Section 4 Rule Section 5 Enforcement Section 6 Severability and Scope Section 7 Effective Date Section 8 History This regulation is promulgated by the Commissioner under the authority granted in § § 10-1-109, and 10- 4-706(6)(a), C.R.S.2002 (effective until July 1, 2003 except for claims incurred under policies lawfully in effect as described in this regulation).
Section 2 Background and Purpose The purpose of this regulation is to provide rules for the PIP examination program whenever disputes arise on PIP claims.
Section 3 Applicability and Scope The Colorado Reparations (No-Fault) Act was repealed effective July 1, 2003. Automobile insurance policies with personal injury protection (PIP) benefits issued or renewed prior to July 1, 2003 will continue to incur PIP claims and disputes on such claims until PIP benefits do not apply any longer. Section 4 Rule All statutory cites contained in this section reflecting § § 10-4-701 through 10-4-726, C.R.S. 2002, shall refer to the statutes in effect as of June 30, 2003.
A. DEFINITIONS
B. STANDARDS AND CONDITIONS FOR MEMBERSHIP ON THE PIP EXAMINATION REVIEW PANEL An applicant for panel membership shall complete the PIP IME registration form as required by the IME Program Administrator. By submitting a completed registration form for panel membership to the IME Program Administrator, a health care practitioner certifies he/she:
Code of Colorado Regulations 62 Failure to comply with these provisions may result in removal of the panel member from membership on the PIP Examination Review Panel by the IME Program Administrator.
C. REQUESTING A PIP EXAMINATION
D. SELECTION OF THE PANEL MEMBER AND PREPARATION OF RECORDS
E. SCHEDULING THE PIP EXAMINATION AND SUBMISSION OF RECORDS
F. REPORT BY PIP EXAMINER
Section 7 Effective Date This regulation is effective January 1, 2007.
Section 8 History Originally issued as Emergency Regulation 96-E-5, effective January 1, 1997. Emergency Regulation 97-E-2, effective April 1, 1997.
Emergency Regulation 97-E-3, effective June 30, 1997.
Regulation 5-2-9, effective September 1, 1997.
Amended Regulation 5-2-9, effective January 1, 1999.
Amended Regulation 5-2-9, effective September 1, 2000.
Amended Regulation 5-2-9, effective February 1, 2004.
Amended Regulation 5-2-9, effective January 1, 2007.
Regulation 5-2-11 Repealed Effective 06/01/2012 Regulation 5-2-12 CONCERNING AUTOMOBILE INSURANCE CONSUMER PROTECTIONS Section 5 Rules Code of Colorado Regulations 67 Section 9 History This Regulation is promulgated by the Commissioner of Insurance under the authority of § § 10-1-109, 10-4-601.5, 10-4-625 and 10-4-628(4), C.R.S.
The purpose of this regulation is to interpret and implement the provisions of Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes. In addition, this regulation provides rules governing the rejection of coverage, cancellation, nonrenewal, increase in premium, and reduction in coverage on complying policies of automobile insurance.
This regulation shall apply to all insurers that issue or renew automobile coverage on or after November 1, 2012 pursuant to Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes.
A. "Complying policy" shall have the same meaning as in § 10-4-601(2), C.R.S.
B. "Incident" shall mean an event or occurrence that results in an at-fault accident or motor vehicle conviction. An accident resulting in a motor vehicle conviction shall be treated as a single incident.
C. "Motor vehicle conviction" shall mean an adjudication of guilt to a traffic offense, whether based upon a trial resulting in conviction or a plea of guilty or no contest to the original charge or to a reduced charge.
D. "Prominently display" shall mean using bold characters, underlining, italicizing or using some other means of ensuring the information is distinct and easily recognized by the recipient of the document.
E. "Quarterly premium payment" shall mean one fourth (1/4) of the gross annual premium plus additional service charges, if any, for policies written for a term of one year or longer, or one half (1/2) of the gross six months premium, plus additional service charges, if any, for policies written for a six- month term.
F. "Usage based insurance" shall mean a rating structure that is based, in whole or in part, on the electronic accumulation of data through a device installed in a motor vehicle in which an individual’s daily driving habits are used to determine a premium rate in accordance with a rating plan that has been filed with the Division.
G. "Week" shall mean any seven (7) consecutive calendar days. Section 5 Rules A. Installment Premium Payments.
B. Rules Limiting Insurers’ Action to Refuse to Write, Cancel, Nonrenew, Increase Premium, Surcharge or Reduce Coverages.
As used in this subsection, a conviction, accident, or payment made for the same occurrence shall be considered as one incident.
This regulation is effective November 1, 2012.
Section 9 History Originally issued effective February 1, 2004.
Amended regulation effective December 1, 2004.
Amended regulation effective January 1, 2007.
Amended regulation effective August 1, 2007.
Amended regulation effective September 1, 2009.
Amended regulation effective January 1, 2011.
Repealed and repromulgated effective November 1, 2012.
Regulation 5-2-13 Repealed Effective 06/01/2012 Regulation 5-2-14 [Reserved] Regulation 5-2-15 CONCERNING CONSUMER PROTECTION FOR VEHICLE VALUATION AND RENTAL REIMBURSEMENT Section 5 Rules Code of Colorado Regulations 72 Section 9 History This regulation is promulgated under the authority of § § 10-1-109, 10-3-1110 (2), 10-4-601.5 and 10-4- 639 (3) (4), C.R.S.
The purpose of this regulation is to establish standards for payment of claims for vehicle rental and collision damage waivers, and for valuation of total loss claims under private passenger auto insurance policies.
This regulation shall apply to all insurers that provide automobile insurance policies.
A. “Total Loss” means the condition of a motor vehicle when it is damaged or destroyed to such an extent that the insurer determines it cannot be rebuilt or repaired to its condition prior to the loss; or the cost of the loss (including, but not limited to, rental expenses, specialized labor and part availability) make the repairs of the vehicle uneconomical.
B. “Valuation” means the method of determining the worth of property that has been lost or damaged.
C. “Third-Party Claimant” means the individual other than the insured or the insurer who has incurred a loss or is entitled to receive a benefit payment as a result of the negligent acts or omissions of the insured.
D. “Collision Damage Waiver” means the special property damage coverage purchased by an individual renting an automobile under which the rental company waives any right to recover property damage to the automobile from that individual regardless who is at fault. Section 5 Rules A. Total Loss Claims
B. Payment For Temporary Replacement of Damaged Motor Vehicles
C. Failure to comply with this regulation constitutes an unfair or deceptive act or practice in the business of insurance.
If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation shall become effective on August 1, 2012. Section 9 History New regulation issued effective December 1, 2004.
Amended regulation effective August 1, 2012.
Code of Colorado Regulations 74 Regulation 5-2-16 DISCLOSURE REQUIREMENTS FOR PRIVATE PASSENGER AUTOMOBILE POLICIES Section 5 Rules Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10 1 109, 10-4-111(5), 10-4-601.5, 10-4-636, and 10-4-641(1) C.R.S. The purpose of this regulation is to interpret and implement the provisions of § § 10 4 111 (1) and (5) and 10-4-636, of the Colorado Revised Statutes, to provide summary disclosure requirements and the summary disclosure form for private passenger automobile insurance. This regulation shall apply to all licensed insurers or producers in Colorado issuing private passenger automobile policies pursuant to Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes.
A. "Adequate Evidence" shall have the same meaning as set forth in § 10-4-636(3)(b), C.R.S.
B. "Automobile" for the purposes of this regulation and summary disclosure shall include motor vehicles, low-power scooters, and motorcycles as defined in § § 10-4-601 (6) and 42-1-102 (48.5) and (55), C.R.S.
C. "Commercial Automobile Insurance Policy" means any policy issued pursuant to the requirements of § § 10-4-1401 et seq., C.R.S., where the organization or entity qualifies as an exempt commercial policyholder and the requirements outlined in the foregoing statute and Division Regulation 5-1- 13 have been met.
D. "Initial Insurance Purchase" means when the application for insurance is submitted and payment is made to the insurer or producer.
Code of Colorado Regulations 75 E. "Optional or Enhanced Coverages" means those coverages that will result in an increased premium to an insured’s policy, and for which the express consent of the insured is required, but does not include uninsured or underinsured motorist coverage or medical payments coverage.
F. "Summary Disclosure Form" means the form that contains an explanation of the major coverages and exclusions of an insurer’s automobile insurance policy, together with a recitation of general factors considered in cancellation, nonrenewal and increase-in-premium situations. Section 5 Rules A. Summary Disclosure Form
B. Disclosure Requirements
Code of Colorado Regulations 76
C. Additional Disclosure Requirements
D. Optional and Enhanced Coverages
If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Noncompliance with this Regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of license. Among others, the penalties provided for in §10-3-1101 et seq., C.R.S. may be applied.
This regulation shall become effective January 1, 2012. Code of Colorado Regulations 77 Section 9 History New regulation effective January 1, 2007.
Amended regulation effective January 1, 2008.
Amended regulation effective January 1, 2009.
Amended regulation effective January 1, 2012 COLORADO PRIVATE PASSENGER AUTOMOBILE INSURANCE - SUMMARY DISCLOSURE FORM This summary disclosure form is a basic guide to the major coverages and exclusions in your policy. It is a general description. It is not a policy of any kind. All coverage is subject to the terms, conditions, and exclusions of your policy and all applicable endorsements. PLEASE READ YOUR POLICY FOR COMPLETE DETAILS. THIS SUMMARY DISCLOSURE FORM SHALL NOT BE CONSTRUED TO REPLACE ANY PROVISION OF THE POLICY ITSELF. Complete details include, but are not limited to, information on the method we use to calculate your unearned premium (e.g., pro rata or short rate), if you should cancel your policy before the next renewal. This summary disclosure form also provides some of the factors considered for cancellation, nonrenewal and increase-in-premium. These factors are general in nature. They do not represent the only reasons a policy may be cancelled or changed. Please contact us or your agent for further information.
I. REQUIRED COVERAGE - Liability Colorado law requires you to have liability coverage on your automobile. This coverage pays bodily injury to another person and property damage to another’s property that are the result of an accident in which you are found to be at fault.
Coverage is not provided for any automobile owned by you or a resident relative that is not insured for liability under your policy. There is no coverage for intentional acts. Please read your policy for other conditions and exclusions.
II. OTHER COVERAGES A. Uninsured and Underinsured Motorist Coverage Uninsured and underinsured motorist coverage will be included in your policy unless you reject it in writing.
Please read your policy for other conditions and exclusions.
B. Physical Damage Coverage – Collision and Comprehensive Code of Colorado Regulations 78 You must be offered collision coverage.
Collision and comprehensive coverage may be written with a deductible. A deductible is that part of a loss you will pay. We will pay the balance of covered repairs subject to your policy provisions. A lender may require you purchase both collision and comprehensive coverage. Coverage does not apply to losses that occur while your automobile is rented or leased to others. There is no coverage for wear, tear, freezing, mechanical failure or breakdown, or road damage to tires.
Please read your policy for other conditions and exclusions.
C. Medical Payments Coverage Medical payments coverage of $5,000 will be included in your policy unless you reject it. You may reject the coverage in writing or in the same method in which you applied for the policy. Medical payments coverage is not required to be offered on motorcycles, low-power scooters, off- road vehicles or other miscellaneous vehicles.
Medical payments coverage will apply toward health coverage coinsurance or deductible amounts.
We must prioritize the payment of your benefits in a manner consistent with Colorado insurance law.
Injuries to you that are the result of an at-fault accident will not be paid, under an automobile insurance policy, unless medical payments coverage is purchased. Please read your policy for other conditions and exclusions.
D. Uninsured Motorist Property Damage Coverage This coverage pays for damages to your automobile caused by an at-fault owner of an uninsured automobile.
This coverage will not apply if the automobiles do not make physical contact. This coverage only pays actual cash value of your automobile or cost of repair or replacement, whichever is less.
Code of Colorado Regulations 79 Please read your policy for other conditions and exclusions.
III. CANCELLATION, NONRENEWAL AND INCREASE IN PREMIUM A. Cancellation During the first 59 days we may cancel your policy for any reason not prohibited by law. After your policy has been in effect for more than 59 days, we may cancel your policy for any of the following reasons:
B. Nonrenewal We may choose to non-renew your policy. Some examples of reasons for nonrenewal include, but are not limited to:
C. Increase in Premium We may increase your premiums for the following reasons:
The above list of reasons is not all inclusive. There may be other changes that result in an increased premium.
We may add a surcharge or remove an accident free discount because of an at-fault accident or traffic conviction. Under this circumstance you will receive a statutory right to protest this action. Regulation 5-3-1 WORKERS COMPENSATION RISK MANAGEMENT REGULATION Code of Colorado Regulations 80 This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of Sections 10-1-109 and 10-4-408, C.R.S.
The purpose of this regulation is to provide standards for risk management programs and services required to be offered by workers compensation insurers, licensed to conduct business in this state, including Pinnacol Assurance.
This regulation shall apply to all insurers authorized to issue worker’s compensation insurance policies in Colorado including Pinnacol Assurance.
A. "Anniversary date" means the annual anniversary of the date of issue of a workers compensation insurance policy as shown in the policy declaration.
B. "Certified workers compensation risk management program or service" means a program or service which meets the minimum standards of this regulation and is certified by the Colorado Cost Containment Board located at the Colorado Division of Labor and Employment.
C. "Initial certification date" means the date the risk management program of a business entity is initially certified by the Colorado Cost Containment Board. A risk management program that meets the risk management standards of this regulation will be initially certified one year after the implementation of the program by the business entity.
D. "Re-certification date" means each annual anniversary date of the initial certification.
E. "Risk management" means the process that uses physical and human resources to prevent or reduce losses.
F. "Risk management service" means such activities as loss exposure identification, determination of the size of exposure and the degree of hazard, loss control services, and management services. Section 5 Rules A. Minimum Risk Management Standards A risk management program must comply with the following standards:
Code of Colorado Regulations 81
Code of Colorado Regulations 82
B. Risk Management Services All workers compensation insurers and Pinnacol Assurance are required to provide risk management services which include identifying loss exposures, measuring the size of the exposures and in determining varying degrees in hazards. Furthermore, insurers are to assist insured business entities in selecting techniques to handle exposures, and in establishing and implementing a risk management program which meets the minimum standards of this Regulation. If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Non compliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines and/or suspension or revocation of license.
This regulation is effective June 1, 2012.
Section 9 History Issued as new regulation 91-5, effective May 1, 1991 Re-codified as regulation 5-3-1, effective June 1, 1992 Amended regulation 5-3-1, effective March 2, 2003 Amended regulation 5-3-1, effective June 1, 2012 Regulation 5-3-2 Repealed Effective 12/01/2012.
Regulation 5-3-3 CONCERNING WORKERS’ COMPENSATION LARGE DEDUCTIBLE POLICIES Code of Colorado Regulations 83 Section 5 Rules Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § 10-1-109(1) and (2), C.R.S.
The purpose of this regulation is to promulgate rules for payments to the Major Medical Insurance Fund created in § 8-46-202, C.R.S., the Subsequent Injury Fund created in § 8-46-101, C.R.S., the Workers’ Compensation Cash Fund created in § 8-44-112 (7), C.R.S., and the Cost Containment Fund created in § 8-14.5-108, C.R.S., on workers' compensation insurance deductible policies in excess of the limit set forth in § 8-44-111(1), C.R.S., and to clarify the liability of insurers to employees under insurance contracts.
This regulation shall apply to all insurers authorized to issue worker’s compensation insurance policies in Colorado including Pinnacol Assurance.
"Large deductible policy" means a policy subject to a deductible in excess of the "split point" filed by a rating organization and approved by the Commissioner of Insurance. "Split point" shall have the same meaning as defined in § 8-44-111 (1) (b), C.R.S. Section 5 Rules A. Pursuant to § 8-44-105, C.R.S., every large deductible policy shall contain a provision stating that the insurer is liable to pay workers’ compensation benefits directly to the employee or the employee’s dependents, in the event of death. All other provisions in § 8-44-105, C.R.S., are applicable to large deductible policies.
B. The premium reported to the Colorado Division of Workers' Compensation is subject to assessment by the Major Medical Insurance Fund, the Subsequent Injury Fund, the Workers’ Compensation Cash Fund and the Cost Containment Fund.
Code of Colorado Regulations 84 C. The premium for large deductible policies shall be subject to the same reporting requirements as other workers' compensation premiums subject to assessment as stated in 5.B. Every workers' compensation insurer authorized to conduct business in Colorado, including Pinnacol Assurance, shall report large deductible policy premiums to the Colorado Division of Workers' Compensation as: if the policy had no deductible, and after application of any credits or debits for experience rating, schedule rating, premium size, risk management, or employer designated medical provider.
D. The requirements of this regulation apply to all large deductible policies issued or renewed after the effective date of this regulation.
If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation is effective January 1, 2014.
Section 9 History New Regulation 5-3-3, effective January 1, 1995 Emergency Regulation 98-E-1, effective July 1, 1998 Amended regulation 5-3-3, effective September 28, 1998 Amended regulation 5-3-3, effective March 2, 2003 Amended regulation 5-3-3, effective June 1, 2012 Amended regulation 5-3-3, effective October 1, 2013 Amended regulation 5-3-3, effective January 1, 2014 Regulation 5-3-4 CONCERNING STANDARDS FOR NOT AT-FAULT MOTOR VEHICLE ACCIDENTS UNDER WORKERS' COMPENSATION, LOSS LIMITATION IN CALCULATING EXPERIENCE MODIFICATIONS AND DISTRIBUTION OF LOSSES IN EXCESS OF THE LOSS LIMITATION Section 4 Rules Code of Colorado Regulations 85 Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109 and 10-4-408(5)(e), C.R.S.
The purpose of this regulation is to establish and implement final rules that provide standards for determining when a motor vehicle accident is not at fault, a loss limitation to be included in the calculation of workers' compensation insurance experience modifications, the loss distribution among workers' compensation classifications of any loss in excess of the loss limitation, when the use of a motor vehicle is an integral part of an employer's business.
This regulation shall apply to all insurers authorized to issue worker’s compensation insurance policies in Colorado including Pinnacol Assurance.
Section 4 Rules A. Not At-Fault Motor Vehicle Accidents Not at-fault motor vehicle accidents shall be accidents occurring under the following circumstances:
B. Loss Limitation If an employer qualifies for an experience modification, the calculation of such experience modification shall not include any loss in excess of $2,000 per accident as a result of a motor vehicle accident in which the employee or the employer of the employee was not at fault and the use of the motor vehicle is not an integral part of the employers business.
C. Distribution of Loss in Excess of Loss Limitation Code of Colorado Regulations 86
D. Employers Affected by Loss Limitation Experience modifications of employers who use motor vehicles as an integral part of their business should not be affected by the $2,000 loss limitation. Motor vehicle use should be considered an integral part of the business when the use of a motor vehicle is the primary means of the employer's operations to transport goods and people.
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This regulation is effective July 1, 2012.
Section 8 History New Regulation 5-3-4, effective February 1, 1995.
Amended regulation, effective March 2, 2003.
Amended regulation 5-3-4, effective July 1, 2012.
Regulation 5-3-5 WORKERS' COMPENSATION DEDUCTIBLE REIMBURSEMENT Section 4 Definition Section 5 Rule Code of Colorado Regulations 87 Section 9 History This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 8-44-111 and 10-1-109, C.R.S.
Pursuant to § 8-44-111(3), C.R.S., Colorado is a net reporting state for workers’ compensation insurance. This means that an employer’s deductible up to the split point is subtracted from the amount of the loss per claim for the purpose of calculating the employer’s experience modification factor. Many employers have not received the intended benefit of the deductible exclusion. Due to reporting requirements, insurers reported the full loss to the statistical agent because they had not actually received the deductible reimbursement from the employer. Frequently, insurers fail to correct their unit statistical reports to show the paid deductible amount, thereby depriving the employer of the benefit of the deduction. This rule eliminates the requirement of actual receipt of the deductible by insurers prior to reporting such deductible to the statistical agent for the purpose of calculating the experience modification factor.
This regulation shall apply to all insurers authorized to issue workers’ compensation insurance policies in Colorado including the Colorado Compensation Insurance Authority also known as Pinnacol Assurance who issue policies with a deductible.
Section 4 Definition "Split point" shall have the same meaning as defined in § 8-44-111 (1) (b), C.R.S. Section 5 Rule Workers’ Compensation insurers writing deductible insurance policies in Colorado are required to deduct the full amount of the policy deductible from any claim reported, up to the "split point" filed by a rating organization and approved by the Commissioner of Insurance for each claim. This shall be applicable for large and small deductible programs, without regard to the actual receipt of the deductible when initially reporting a loss to any statistical agent for the calculation of the employers experience modification factor. Elimination of the actual receipt requirement will ensure that more employers receive accurate experience modification factors.
However, insurers shall also report the total or full amount of the loss (without regard to the split point exclusion above). This is to ensure that the full amount of the loss is reported properly for purposes other than calculating the experience modification factor.
If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Code of Colorado Regulations 88 Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This regulation is effective January 1, 2014.
Section 9 History New Regulation 5-3-5, effective July 1, 2002.
Amended Regulation 5-3-5, effective July 1, 2012.
Amended Regulation 5-3-5, effective October 1, 2013.
Amended Regulation 5-3-5, effective January 1, 2014.
Rule 13-E-14 PROHIBITED ADVERSE ACTIONS APPLICABLE TO VICTIMS OF THE 2013 COLORADO FLOOD Section 5 Rules Section 9 History This Regulation is promulgated under the authority of § §10-1-109 and 10-3-1110, C.R.S. The 2013 floods that affected seventeen Colorado counties caused significant losses and damages to Colorado consumers. The Division is aware that property may be inaccessible and unoccupied while roads, bridges, utilities and other infrastructure in Colorado communities was or is being repaired. The purpose of this Regulation is to provide a rule to protect the affected consumers by prohibiting certain adverse actions during the recovery period. The Division of Insurance (Division) finds, pursuant to § 24- 4-103(6)(a), C.R.S., that immediate adoption of this regulation is imperatively necessary to ensure that Colorado consumers are protected from adverse actions for subsequent claim occurrences related to property that was or is inaccessible because of the 2013 flooding in Colorado . Therefore, compliance with the requirements of § 24-4-103, C.R.S., would be contrary to the public interest. Code of Colorado Regulations 89 This rule shall apply to all insurers licensed to conduct business in Colorado. "Subsequent Claim Occurrence" shall mean any claim that occurs after the flood waters have receded. Section 5 Rules A. An insurer shall not cancel or non-renew a property insurance policy if the property has not been damaged but is otherwise unoccupied because the property owner, business owner or renter is unable to return to the property for reasons beyond their control, including but not limited to:
B. If FEMA requires coverage denial to provide the consumer financial assistance, the insurer shall not take an adverse action because of this requirement.
C. An insurer shall not consider a subsequent claim occurrence a result of flood if the claim occurred after the floodwaters receded.
D. In the event of a subsequent claim occurrence, an insurer must consider the factors outlined in Subsection A. above when determining whether an insured took reasonable actions to protect the property.
E. Personal property removed from the insured premises because of flooding must be covered at the same amount as if the property were located at the insured premises until the real property is occupied.
If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected. Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
This Emergency Regulation will be effective October 25, 2013. _________________________________________________________________________ Editor’s Notes History Code of Colorado Regulations 90 Regulation 5-2-3, Regulation 5-2-12 eff. 07/30/2007.
Regulation 5-2-16 eff. 07/01/2008.
Regulations 5-2-11 and 5-2-16 eff. 01/01/2009.
Regulation 5-1-10 eff. 08/01/2009.
Regulation 5-2-12 eff. 09/01/2009.
Regulation 5-2-12 eff. 01/01/2011.
Regulation 5-1-1 eff. 07/15/2011.
Regulation 5.2.16 eff. 01/01/2012.
Regulations 5-1-1, 5-1-11, 5-1-12, 5-3-1, 5-3-3 eff. 06/01/2012; Repealed 5-2-1, 5-2-3, 5-2-5, 5-2-6, 5-2- 7, 5-2-11, 5-2-13 eff. 06/01/2012.
Regulations 5-1-2, 5-1-8, 5-2-2, 5-3-4, 5-3-5 eff. 07/01/2012. Regulations 5-1-9, 5-1-15, 5-2-15 eff. 08/01/2012.
Regulation 12-E-12 emer. rule eff. 08/08/2012.
Regulations 5-1-6, 5-1-14, 5-1-17, 5-2-8 eff. 09/01/2012. Regulation 5-1-10 eff. 10/01/2012.
Regulations 5-1-13, 5-2-12 eff. 11/01/2012.
Regulation 5-3-2 repealed eff. 12/01/2012.
Regulation 5-1-12 eff. 04/01/2013.
Regulation E-13-04 emer. rule eff. 06/18/2013.
Regulations 5-1-18, 5-3-3, 5-3-5 eff. 10/01/2013.
Regulation 13-E-14 emer. rule eff. 10/25/2013.
Regulations 5-3-3, 5-3-5 eff. 01/01/2014.
Annotations Unless modified, corrected or vacated, the decision of the arbitrators shall be final. The final award may be confirmed and converted to a judgment. Dale v. Guaranty Nat. Ins. Co., 948 P.2d 545 (1997).
Trial court improperly relied on 3 C.C.R. § 702-5 in summary judgment that found that plaintiff could not prevail on their claim as a matter of law. Reyer v. State Farm Mut. Auto. Ins. Co. , Colo. App. 06CA 0239 (2007).
Code of Colorado Regulations 91