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 property 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)

Supporting Documentation

Under 10-4-416, insurers must maintain documentation supporting how rates were developed and must provide it upon request by the Commissioner.

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