Ref: C.R.S. 10-1-104; 10-1-105; 10-1-108; 10-1-109; 10-1-201 through 204; 10-3-105; 10-3-208; 10-3-1106
The Commissioner of Insurance, appointed by the Governor, serves as the chief regulator of insurance in Colorado. The Commissioner’s duties include:
In practice, the Commissioner ensures that the insurance marketplace operates fairly and that consumers are treated honestly and transparently.
Ref: 10-2-801; 10-2-804; 10-3-1104; 10-3-1107 through 1109; 10-3-1111
When a violation of Colorado insurance law occurs, the Commissioner has authority to:
Common reasons for hearings include:
If the Commissioner believes that a producer has (or is about to) violate any insurance regulation in Colorado, the Commissioner may issue a cease and desist order. The recipient of a cease and desist order has not had their registration suspended or revoked, but is required to stop or limit the activity addressed in the order.
Although the recipient of a cease and desist order must comply immediately, actions taken by the Commissioner are not “final and binding.” Any Colorado resident producer who is subject to disciplinary action has the right to request a hearing to discuss the merits of the situation.
The Commissioner also has the authority to investigate any producer doing business in Colorado to determine whether a hearing is required. If sufficient evidence is found, the Commissioner will issue a notice with the date and time of the hearing. This notice will be sent to interested parties at least 20 days before the hearing.
If a hearing results in a finding of a known violation of Colorado insurance law, the Commissioner may, in addition to issuing a cease and desist order, impose a civil penalty of up to $15,000 per violation.
Ref: 10-2-401; 10-2-801 through 804; 10-3-904.6; 10-3-904.7; 10-3-1108
Suspend, revoke or non-renewal
The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:
Ref: 1-1-7; 1-1-8
Complete and accurate records must be kept at the producer’s place of business for a minimum of 3 years. The records must show every contract placed, the named insured, changes or amendments, and premiums received with each transaction.
Records may be inspected at any time by the Division of Insurance or any representative appointed on their behalf.
The Commissioner maintains public records of insurance companies, producer licenses, and disciplinary actions. Insurance professionals must respond promptly to requests for information from the Division of Insurance. For purpose of the exam, “promptly” is within 30 days. Failure to comply may result in administrative penalties or disciplinary action.
Policy forms
Colorado is a “file and use” state. A file and use filing is a submission that must be filed with the Department, but the insurer can begin using it as soon as it is filed. The insurer does not have to wait for Department approval before using it.
A file and use filing does not mean the company can submit anything it wants. The submission must still comply with the Law, Regulations, and Bulletins.
If the wording on an insurance policy conflicts with Colorado state law, the policy will be amended to minimum conformity with state statutes.
The amount of interest that may be charged on a life insurance policy loan is also regulated by state law, and policy provisions must comply with these statutory limits.
Ref: 10-2-103(6); 10-2-105; 10-2-201; 10-2-401; 10-2-404; 10-2-407; 10-2-408; 10-2-412; 10-2-416; 10-2-701; 10-2-702; 10-2-801; Reg. 1-2-10
Any person who sells, solicits, or negotiates insurance in Colorado must hold a valid producer license. Key points:
Notice of change of name or address
Any change of name or address (residential or business) must be reported by the licensee to the Colorado Division of Insurance within 30 days of relocation. Failure to do so may result in monetary fines and/or suspension of a license.
Company regulations
An insurance company must be authorized by the Division of Insurance to conduct business in Colorado. To receive authorization, the insurance company must present:
Place of business
Every resident insurance producer authorized to conduct business in Colorado must maintain a place of business (with public access) within the state.
Capital and surplus requirement
A company authorized to conduct insurance business in Colorado must meet minimum corporate standards. The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required.
Ref: 10-2-401; 10-2-702; Reg. 1-2-9
Only licensed producers may receive commissions or fees for the sale of insurance.
Unlicensed individuals cannot legally share in commissions.
Producers must disclose any service fees charged directly to clients and may not charge unauthorized or hidden fees.
Ref: 10-2-704; Reg. 1-2-1
Producers hold all premiums and return premiums in a fiduciary capacity.
They must:
Commingling client funds with personal funds is grounds for disciplinary action or license revocation.
Ref: 10-2-301; Reg. 1-2-4; 1-2-5
Any individual applying for a Colorado resident producer’s license must:
Required pre-licensing course and exam
Before you can sit for the pre-licensing exam, Colorado requires you to successfully complete a pre-licensing course approved by the Division of Insurance.
Fingerprints/background check
As part of the application process, you must submit fingerprints to the Colorado Division of Insurance. Plan to get fingerprinted after you pass the state exam and at least one day before you apply for the license.
Non-resident license
A licensed producer must meet the following requirements to obtain a nonresident license:
Temporary license
A temporary producer license is valid only if the temporary producer is sponsored and appointed by an insurance company. A temporary producer license is a once-in-a-lifetime license per line of authority and is valid for a maximum of 6 months from the date the license is issued.
Inactive status
A Colorado resident producer who is ordered to active military duty may place their license on inactive status until discharge. While a license is inactive, the producer may continue to receive residual (“trailing”) commissions, but may not solicit or transact any new business.
Renewal maintenance
You must renew your Colorado insurance license every two years.
You can renew your license online at the Colorado Department of Insurance website, as long as you’ve completed all mandatory continuing education requirements.
Continuing education
All states, including Colorado, have continuing education (CE) requirements that must be met to renew any major lines (life, health, property, liability) insurance license.
Individuals licensed in Colorado must complete 24 hours of CE before renewing their license. This must include:
Ref: 10-3-903 through 10-3-904.5; 10-3-906; 10-3-908
Selling insurance for an unauthorized or nonadmitted insurer is prohibited unless conducted through a licensed surplus lines broker.
Fraudulent producer representation
An insurance producer who represents to the public that they are licensed to conduct insurance business in Colorado, but has not passed the appropriate licensing examination, is in violation of the regulation.
Any means of public communication are included in the definition of impersonating a licensed producer, including advertisements, letterheads, circulars, business cards, and other methods of representation.
Producers must ensure that the insurer is properly authorized to conduct business in Colorado. A producer found guilty of conducting business in Colorado in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.