colorado statutes, rules, and regulations common to all lines
Terms in this set (26)
insurance commissioner - powers and duties
the commissioner of insurance is the head of the division of insurance, appointed by the governer, subject to confirmation of the appointmen by the senate. it is the duty of the commissioner to do any of the following:
- file and keep all books and papers required by law;
- issue certificates of authority to transact business;
- issue other certificates as required by law;
- examine all requests and applications for producer licences to be issued;
- make investigations and examinations if the commissioner believes there is a violation of the insurance laws in colorado;
- supervise the business of insurance in this state to assure that it is conducted in accordance with the state laws of this state and in such a manner as to protect policyholders and the general public;
- transmit all monies collected by the division of insurance to the department of the treasury's general fund;
- encourage the dissemination to the public of general information concerning insurance so as to work toward informed choices of insurance needs and options;
- evaluate insurance policies for long term care to determine their complience and to provide insurance companies with a written statement indicating the results;
-oversee the operation of electronic data interchange projects for purposes of uniform billing and electronic data exchange for health benefit coverages;
- adopt roles that set forth standards specefic to licensed provider networks or licensed individual providers concerning solvency and operation capacity or the performance of services consistent with the extent of risk being accepted by the licenced provider network or licenced individual providers;
- establish or amend reasonable rules that are neccessary to enable the commissioner to carry out his or her duties under the laws of the state;
- examine and investigate into the affairs of every person engaged in the business of insurance in this state in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or prohibited practice;
- generally perform with justice and impartially all the duties that are imposed on the commissioner by the laws in relation to the business of insurance in this state.
commissioner duties - examinations
the commissioner may conduct an examination or investigation of any company or person involved in insurance transactions as often as deemed appropriate, but at least once every five years.
commissioner duties - years
all reasonable expenses and charges associated with the examination must be paid directly by the examinee to the examiner. if the examinee contests the amount of fee or costs by filling an objection with the commissioner, the charges will not be due until the commissioner reviewed the objection and made a judgement. the costs of financial examination of foreign companies made outside colorado must be paid by the company examined and must include the expenses of the commissioner.
the commissioner and examiners have the power to issue subpeoenas, administer oaths, and examine under oath any person as to any matter pertinent to the examination. upon the failure or refusal of any person to obey a subpeona, the commissioner may petition a court of competent jurisdiction for an order, which can be enforcable through contempt proceedings, compelling the person to appear and testify or produce documentary evidence.
in conducting the examination, the examiners must observe those guidelines and proceedures set forth in the most recent available edition of the examiner's handbook adopted by the national association of insurance commissioners and the colorado insurance examiners handbook. the commissioner may also employ such other guidelines or procedures, as the commissioner may deem appropriate.
the refusal of any company or any of its officers, directors, employees, or producers to submit to examination or to comply with any reasonable written request of the examiners will be grounds for suspension, revocation, denial, or nonrenewal of any license held by the company and subject to the commissioners jurisdiction.
any person who knowingly or willingly testifies falsely in reference to any matter material to an investigation, examination, or inquiry is guilty of a misdeamenor and, upon conviction, can be punished by a fine of not more than $5,000, or imprisonment for not more than 3 months, or by both.
commissioner duties - financial statements
all insurance companies doing business in this state are required to make a statement under oath and file it with the commissioner annually (on or before the first of march) including the following:
- the amount of premiums collected during the year ending the last day of preceeding december;
- the amounts actually paid to policyholders;
- the amount of insurance reinsured in other companies authorized to do business in this state and the amount of premiums paid;
- the amount of insurance reinsured in other companies (naming them) not authorized to do business in this state and the amount of premiums paid;
- the amount of reinsurance accepted from admited companies and the amount of premiums recieved from such reinsurrance, with the names of the companies so reinsured
commissioners duties - hearings and penalties
in additon to or in lieu of any applicable denial, suspension, or revocation of an insurance producer license, any person who violates any provision of this article may, after hearing, be subject to a civil penalty of not more than $1,000 for each such violation.
if after a hearing, the commissioner determines that the person charged has engaged in an unfair method of competition or in an unfair act or practice, the commissioner will reduce the findings to writing and issue and cause to be served on such person a copy of such findings and an order requiring such person to cease and desist from engaging in such method of competition, act, practice, or violation. the commissioner may also, at their discretion, impose one or more of the following penalties:
- a monetary fine up to $3,000 for each violation, not to exceed an aggregate of $30,000, unless a person knew or reasonably should have known they were in violation, in which case the penalty could be up to $30,000 for each violation but not exceeding a total of $750,000 annually
- suspension or revocation of the persons license who reasonably should have known he or she was in violation
- payment of a contractual claim to an insured or beneficiary pursuant to an insurance policy if the commissioner finds that the violation caused the failure to pay the victim.
commissioner duties - penalties
any person who violates a cease and desist order of the commissioner may, after notice and hearing and upon order of the commissioner, be subject to any one or more of the following:
- a monetary penalty of not more than $10,000 per violation by an insurer
- a monetary penalty of not more than $500 per violation by an individual
- licence suspension and revocation
persons required to be licensed
insurance producers- meaning persons who solicits, negotiates, effects, procures, delevers, renews, continues, or binds policies of insurance for risks residing or located in this state
at least 50 hours and at least 3 hours pertaining specifically to insurance industry ethics
the purpose of regulation 1-2-9 is to implement rules, which prohibit producers from charging insurance applicants and policyholders certain fees for which they are already compensated through commissions and to clarify which fees may be charged
maintenance of records
the insurance producer must retain a copy of the disclosure statement
the purpose of this regulation is to clarify the responsibility of insurance producers and brokers to treat each insurance policy and premiums handled as a seperate account of their insureds unless specefic authorization has been obtained from insureds to commingle multiple obligations and funds.
no insurance premium or refund recieved by an insurance producer, broker or agency by reason of the application for, issuance or termination of any particular policy may be credited to any other obligation owner by the insured to such producer, agency or other insurer unless specefic written authorization has been obtained from the insured to handle all policies and obligations from one account.
upon reciept, the insurance producer must treat all premiums and returned premiums in a fiduciary capacity, including but not limited to the following:
- upon receipt the insurance producer must treat all premiums and return premiums as trust funds and segregate them from his own funds;
- the insurance producer must keep an accurate record of all fiduciary funds;
- the insurance producer must not treat insurance premiums or returned premiums as a business or personal asset;
- the insurance producers financial statement should not reflect fiduciary funds as an assett or as income to the insurance producer;
- an insurance producer may not use fiduciary funds as collateral for personal or business loan, but the insurance producer may recieve interest on such funds and use as a compensation balance with the financial institution and;
- any deposit of such premium and returned premium funds into a bank or savings account must be into a seperate insurance trust account until actually remitted to the insurer or person entitled.
continuing education requirements
- up to 24 hours of instruction bt attending CE courses or programs of instruction approved by the commissioner.
- out of the 24 continuing education hours, 3 must be courses in ethics;
- the required hours must be completed within 24 months after the date of the producers licence is required to be renewed;
- up to 12 CE hours may be carried over to the next licencing period if completed within 120 days before the continuation date;
- if a producer has more than 1 license to sell insurance in this state, the required hours of instruction must be completed within 24 months after the date the first such licence is required to be renewed.
- the commissioner may grant an extension of time , up to 1 additional year, within which to comply with the requirements of this section
this regulation establishes education requirements for persons licensed to sell certain types of insurance. this regulation establishes the procedures for filing course completion information by the course providers and sets fourth the following:
- the basic requirements for such training and the standards for the courses and programs that qualify for approval y the commissioner;
- the proceedures and standards that the commissioner will use in approving the courses;
- the required record keeping and procedures for certification of satisfactory completion of the continuing education requirement;
- the sanctions for noncompliance with this regulation.
a course offered for continuing education credit that is approved by the colorado division of insurance
is a value assigned to a course approved by the division of insurance
carry over credit hour
is a credit hour earned over and above the 24 required hours during 120 days before the licencing continuation date, which may be applied to the next continuing education period. if a producer chooses to complete continuing education curses in the period prior to their first continuation, these credits are not eligible for carry over.
at least 60 minutes of participation in an approved course. not more then ten minutes in a 60 minute period may be ised for breaks, roll taking, or administrative instruction
must have demonstrated competency in the subject matter with one of the following ways:
- a college degree from an acreedited institution with a major in insurance
- a professional designation of CLU or CPCU or similar designation from an industry association
- 3 or more years of practical experience in the subject matter being taught or monitered
after the first continuation cycle, every producer who is licenced in colorado and not otherwise specifically exempted in this regulation must complete 24 credit hours of approved courses biennially. at least 18 of the 24 credit hours must be in approved courses in the authorities for which the producer is licensed. a maximum of 6 of the 24 credit hours must be in approved courses on subjects designated by the commissioner whenever the commissioner determines that continuing education in such subjects is needed to protect insurance consumers.
those individuals licensed as reinsurance intermediary brokers must complete the required continuing education through professional seminars or curriculum within the reinsurance field. producers may accumulate no more than 12 carry ofer credits hours during the 120 days before the licencing continuation period
in meeting requirements, producers must comply with the following:
- a qualified instructor may receive credit for courses taught at the rate of 1 hour for 1 hour. but may not count instruction hours for the same course more than once in a 24 month period.
- a producer may not get credit for the same course in a 24 month period except for courses that deal with statutory updates.
all courses approved during january through june will expire on march 31 of the 3rd year of the approval date
all courses approved during july through december will expire on september 30 of the 3rd year after the approval date.
the course approval must be renewed with a payment of 20 dollars
course approval - record keeping
records of producers who completed the course must be kept for a 5 year period
unfair claims practices
unfair claims practices means committing or performing, either in willfull violation or with such frequency as to indicate a tendancy to engage in a general business practice, any of the following:
- misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue
- failing to acknowledge and act reeasonably promptly upon communications with respect to claims arising under insurance policies
- failing to adopt and implement reasonable standards for the prompt investigation of claims arising insurance policies
- refusing to pay claims without conducting a reasonable investigation based upon all available information
- failing to affirm or deny coverage claims within a reasonable time after proof of loss statements have been completed
- not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has been completely clear.
- compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recoverd in actions brought by such insureds
- attempting to settle a claim for less than the amount to which a reasonable man whould have believed he was entitled to by reference to written or printed advertising material accompanying or made part of the application
- attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured
- making claims payments to insureds or beneficiaries not accompinied by statement setting forth the coverage under which the payments are being made
- making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration
Numbers, dollars, and days - department of insurance regulations
- 5 years - examination of insurers
- annually - march 1 due date for insurers financial statements
- 60 days - to hold a requested hearing regarding financial statements
Numbers, dollars, and days - licencing and appointment regulations
- 18 - age to apply for a licence
- 50 hours - required prelicencing education
- 30 days - to notify commissioner of termination of producer apointment
- 15 days - insurer must mail a copy of termination notification to the producer
- 15 days - to return suspended, revoked or terminated licence to the commissioner
numbers dollars and days - misc producer regulations
- 30 days to report change of address
- 30 days to report administrative actions against producers or business entities
- 24 hours required every 2 years
- 3 hours required in CE ethics
- 15 days to provide CE completion documents
- 5 years to maintain records of CE completion
- 45 days producers must remit all recieved premiums (minus commissions) to the insurer
- 3 years producers must retain a copy of disclosure statement
- 3 months imprisonment for knowingly and willfully testifying falsly in an investigation
numbers dollars and days - important dollar amounts
$1,000 fine for violation of insurance code
$5,000 maximum fine for false testimoney material to investigation or examination
$10,000 maximum fine per violation of cease and desist order by insurer
$500 maximum fine per violation of cease and desist order by an individual