The sale and administration of life insurance in Colorado are governed by state statutes and regulations. These rules are designed to protect consumers, promote ethical conduct, and ensure that insurance professionals act with integrity and competence.
In this chapter, you’ll study the Colorado laws specific to life insurance, including rules on policy replacement, disclosure, advertising, suitability, group life coverage, insurable interest, and lapse notifications.
The Colorado Division of Insurance (DOI), within the Department of Regulatory Agencies (DORA), enforces these requirements and monitors compliance to support a fair and trustworthy insurance marketplace. As a licensed producer, you’re expected to understand and follow these rules. This knowledge is essential for the state licensing exam and for serving clients responsibly while avoiding regulatory violations.
These laws ensure that:
Consumers receive transparent and truthful information before purchasing life insurance or annuities.
Producers act in the best interests of their clients, making recommendations that are suitable for each individual’s financial situation.
Insurers follow clear, timely, and ethical procedures for claims handling and policy replacement.
Throughout this chapter, you’ll find clear explanations, real-world examples, and references to statutes (e.g., C.R.S. §10-7-109) and DOI regulations (e.g., Reg. 4-1-4). This approach aligns with the Pearson VUE Colorado Licensing Exam Outline and helps you focus on both the rules and how to apply them.
After completing this chapter, you will be able to:
Explain the rules governing policy replacements in Colorado, including notification, recordkeeping, and disclosure requirements under Regulation 4-1-4.
Identify the statutory provisions related to group life insurance under C.R.S. §§10-7-201 through 207, including eligibility, conversion, and beneficiary protections.
Describe the limitations of the suicide clause under C.R.S. §10-7-109 and explain its implications for claim payment.
Summarize consumer rights regarding the free look period and interest on proceeds under C.R.S. §§10-7-302 and 10-7-112.
Recognize the ethical and regulatory standards governing the sales and marketing of life insurance and annuities, including advertising, disclosures, and suitability under Regulations 4-1-1, 4-1-2, 4-1-3, 4-1-8, and 4-1-11.
Define “insurable interest” and identify parties who possess a legitimate financial interest in another’s life under C.R.S. §§10-7-701 through 710.
Explain lapse notice requirements and the minimum timeframe insurers must provide before terminating coverage for nonpayment under C.R.S. §10-7-105.5.
Apply these laws and ethical guidelines to real-world sales and client service scenarios, ensuring compliant and consumer-focused practice.
In day-to-day practice, these statutes shape how you communicate with clients, make recommendations, and document your work. When you understand the purpose behind each rule - protecting the policyholder - you can apply the requirements more consistently and avoid common compliance problems.
These laws help you:
Avoid unfair trade practices or misleading sales tactics
Maintain accurate and ethical advertising
Protect clients’ rights during replacements or policy lapses
Handle claims and communications transparently
Mastering this chapter prepares you for the Colorado Life Insurance licensing exam and supports a professional practice grounded in regulatory compliance and ethical conduct.