Colorado life insurance statutes and regulations summary | Colorado life insurance statutes and regulations

In this chapter, you explored the Colorado statutes, rules, and regulations that govern the sale, marketing, and administration of life insurance products. These laws form the foundation of ethical and compliant insurance practice in the state and are designed to protect consumers while ensuring fair competition among producers and insurers.

You learned how the Colorado Division of Insurance (DOI) enforces these laws under the authority of Title 10 of the Colorado Revised Statutes (C.R.S.) and related DOI regulations. Understanding these provisions helps producers maintain compliance, build client trust, and avoid regulatory penalties.

We covered several key regulatory areas that directly affect everyday producer activities, including policy replacement procedures, consumer disclosure requirements, group life provisions, and lapse notifications. You also examined ethical and professional responsibilities related to marketing, advertising, suitability, and insurable interest, ensuring that sales practices align with the DOI’s consumer protection mission.

Key points

Policy replacements — Regulation 4-1-4

Replacements must include specific disclosures, client acknowledgments, and record retention for at least five years.

The purpose is to prevent consumers from being misled or harmed by unnecessary policy turnover.

Group life insurance — C.R.S. §§10-7-201 through 207

Regulates eligibility, coverage amounts, and conversion rights for group life policies.

Employers and associations must comply with state-approved plan structures.

Suicide clause — C.R.S. §10-7-109

Limits the insurer’s liability if the insured commits suicide within two years of policy issuance. * Ensures fairness by distinguishing early suicide risk from legitimate claims.

Free look and disclosure — C.R.S. §10-7-302; Reg. 4-1-4

Consumers have at least 15 days to review a new life insurance policy and receive a full refund if they cancel within that period.

Disclosure requirements help ensure transparency in all sales transactions.

Interest on proceeds — C.R.S. §10-7-112

Insurers must pay interest on death benefits from the date of death until the claim is settled.

This protects beneficiaries from undue payment delays.

Sales and marketing standards — Regs. 4-1-1 through 4-1-12

Producers must follow ethical advertising, suitability, and disclosure standards when selling life or annuity products. * Misleading statements, exaggerations, and omissions are prohibited under the state’s Unfair Trade Practices Act.

Insurable interest — C.R.S. §§10-7-701 through 710

A valid insurable interest must exist at policy inception.

Common examples include family relationships, business partnerships, and financial dependency.

Lapse notice requirements — C.R.S. §10-7-105.5

Insurers must provide a minimum 25-day written notice before terminating coverage due to nonpayment. * This ensures policyholders have a fair opportunity to maintain coverage.

Professional application

Applying these statutes in daily practice ensures producers maintain ethical standards, legal compliance, and client confidence.
Understanding disclosure, replacement, and suitability rules is essential for avoiding disciplinary actions and maintaining your professional license.
By practicing transparency and acting in clients’ best interests, you uphold the Colorado Division of Insurance’s mission to protect consumers and preserve market integrity.

End-of-chapter reflection

Before moving on, take a few moments to review:

Which regulations directly affect your role as a life insurance producer?
How will you incorporate disclosure, suitability, and ethical sales practices into your client interactions?
Can you confidently identify when a replacement is considered compliant under Colorado law?

Your understanding of these questions will prepare you not only for the state licensing exam but also for a career built on compliance, integrity, and trust.