Colorado Casualty Insurance Statutes and Regulations

Rate Regulations

References: C.R.S. 10-4-401; 10-4-403; 10-4-416

Colorado regulates the way insurers set and file rates for casualty insurance. The major requirements include:

Rates Must Not Be Excessive, Inadequate, or Unfairly Discriminatory

• Rates cannot be too high (excessive)
• Rates cannot jeopardize solvency by being too low (inadequate)
• Rates cannot unfairly discriminate among individuals with the same risk characteristics

File-and-Use System

Colorado uses a file-and-use rating system:

• Insurers file their rates with the Commissioner
• They may begin using the rates immediately unless specifically disapproved

No Rating Based on Disallowed Factors

Disallowed discriminatory rating factors include:

• Race
• Religion
• National origin
• Marital status (except allowed cases tied to risk, e.g., auto policy structure)

No Mid-Term Rate Increases

Under 10-4-416, when an insured has prepaid the premium for a specified policy period, the insurer may not raise the rate or reduce the coverage during that period, unless the risk changed because of the insured’s own acts or the insured misrepresented the risk. The section does not bar a cancellation the policy or law otherwise permits during an initial policy period of up to 60 days.

Summary Disclosure Form

References: C.R.S. 10-4-111; 10-4-636; Bulletins B-5.15; Reg. 5-2-16; 5-1-25; 5-1-26

Colorado requires insurers to provide clear, written explanations of specific policy features.

Purpose of Summary Disclosure Forms

To ensure consumers understand:

• Coverage limits
• Deductibles
• Exclusions
• Key definitions
• Optional coverages
• Claims processes

Auto Insurance Summary Disclosure

Under 10-4-636, insurers must provide a standardized disclosure form when issuing or renewing an auto policy, summarizing:

• Liability requirements
• UM/UIM coverage
• MedPay
• Policyholder rights (e.g., repair choice)

Homeowners Summary Disclosure

Bulletin B-5.15 requires insurers to clearly outline:

• Coverage A–D
• Replacement cost vs ACV
• Catastrophic deductibles
• Limits on certain personal property
• Water, mold, or weather exclusions

The summary does not replace the policy contract.

Use of Credit Information

References: C.R.S. 10-4-116; Reg. 5-1-25; 5-1-26

Colorado allows insurers to use credit information in rating and underwriting with strict limitations.

Key Requirements

1. No cancellation or nonrenewal based solely on credit information.
2. Consumers must receive a notice of adverse action if credit negatively impacts the rate.
3. Insurers must re-rate the policyholder upon request if credit improves, but no more than once every 12 months.
4. Credit models must be filed with the Commissioner.
5. Prohibited credit factors include:
   • Number of credit inquiries not initiated by the consumer
   • Medical collections
   • Credit information affected by catastrophic events or identity theft