C.R.S. § 10-10-101 Short title
10-10-101. Short title. This article shall be known and may be cited as the "Credit Insurance Act".
Credit Insurance
C.R.S. tit. 10, art. 10
in effectC.R.S. § 10-10-102 Legislative declaration
10-10-102. Legislative declaration. The purpose of this article is to promote the public welfare by regulating credit insurance. Nothing in this article is intended to prohibit or discourage reasonable competition. The provisions of this article shall be liberally construed.
C.R.S. § 10-10-103 Definitions
10-10-103. Definitions. As used in this article, unless the context otherwise requires:
(1) "Commissioner" means the commissioner of insurance of Colorado.
(2) "Credit insurance" means insurance on a debtor to provide indemnity for payments or loan balance, or any combination thereof, becoming due on a specific loan or other credit transaction upon the occurrence of a contingency for which insurance is obtained.
(3) (Deleted by amendment, L. 92, p. 1569, § 83, effective May 20, 1992.)
(4) "Creditor" means the lender of money or vendor or lessor of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction, or any successor to the right, title, or interest of any such lender, vendor, or lessor, and an affiliate, associate, or subsidiary of any of them, or any director, officer, or employee of any of them, or any other person in any way associated with any of them.
(5) "Debtor" means a borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges for which payment is arranged through a credit transaction.
(6) "Indebtedness" means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction.
(7) "Truncated coverage" means credit insurance that provides a term of insurance coverage for a period that is shorter than the full term of the indebtedness remaining at the time the insurance coverage is elected. The term does not include credit insurance coverage that terminates on attainment of a specific age.
C.R.S. § 10-10-104 Application of article
10-10-104. Application of article. All insurance in connection with loans or other credit transactions shall be subject to the provisions of this article. Insurance shall not be subject to the provisions of this article where the issuance of such insurance is an isolated transaction on the part of the insurer not related to an agreement or a plan for insuring debtors of the creditor.
C.R.S. § 10-10-105 Forms of credit life insurance and credit accident and health insurance
10-10-105. Forms of credit life insurance and credit accident and health insurance. (Repealed)
C.R.S. § 10-10-106 Amount of credit insurance
10-10-106. Amount of credit insurance. (1) The initial amount of credit insurance shall not exceed the total amount repayable under the contract of indebtedness and, where an indebtedness is repayable in substantially equal installments, the amount of insurance shall at no time exceed the scheduled or actual amount of unpaid indebtedness, whichever is greater.
(2) Notwithstanding the provisions of subsection (1) of this section, insurance on agricultural credit transaction commitments, not exceeding one year in duration, may be written up to the amount of the loan commitment on a nondecreasing or level term plan.
(3) Notwithstanding any other provision of this section, insurance on educational credit transaction commitments may be written for the amount of the portion of such commitment that has not been advanced by the creditor.
(4) The total amount of periodic indemnity payable by credit accident and health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness; and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments.
C.R.S. § 10-10-107 Term of credit insurance
10-10-107. Term of credit insurance. The term of any credit insurance shall, subject to acceptance by the insurer, commence on the date when the debtor becomes obligated to the creditor; except that, where a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to such indebtedness shall commence on the effective date of the policy. Where evidence of insurability is required and such evidence is furnished more than thirty days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for insurance. The term of such insurance shall not extend more than thirty days beyond the scheduled maturity date of the indebtedness except when extended without additional cost to the debtor, unless the debtor has agreed in writing. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance is issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in section 10-10-110.
C.R.S. § 10-10-108 Provisions of policies and certificates of insurance - disclosure to debtors
10-10-108. Provisions of policies and certificates of insurance - disclosure to debtors. (1) All credit insurance shall be evidenced by an individual policy or, in the case of group insurance, by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor.
(2) Each individual policy or group certificate of credit insurance shall, in addition to other requirements of law, set forth:
(a) The name and home office address of the insurer;
(b) The name of the debtor or, in the case of a certificate under a group policy, the identity by name, or otherwise, of the debtor;
(c) The premium or amount of payment, if any, by the debtor separately for credit insurance;
(d) A description of the coverage, including the amount and term thereof, and any exceptions, limitations, and restrictions, and it shall state that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance exceeds the unpaid indebtedness, that any such excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to his estate.
(3) Said individual policy or group certificate of insurance shall be delivered to the insured debtor at the time the indebtedness is incurred, except as provided in subsection (4) of this section.
(4) (a) If said individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for such policy or a notice of proposed insurance, signed by the debtor, shall be delivered to the debtor at the time such indebtedness is incurred, setting forth:
(I) The name and home office address of the insurer;
(II) The name of the debtor;
(III) The premium or amount of payment by the debtor, if any, separately for credit insurance;
(IV) The amount, term, and a brief description of the coverage provided.
(b) The copy of the application for, or notice of, proposed insurance shall also refer exclusively to insurance coverage and shall be separate and apart from the loan, sale, or other credit statement of account, instrument, or agreement unless the information required by this subsection (4) is prominently set forth therein. Upon acceptance of the insurance by the insurer and within thirty days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor. Said application or notice of proposed insurance shall state that upon acceptance by the insurer, the insurance shall become effective as provided in section 10-10-107.
(c) If the named insurer does not accept the risk, the debtor shall receive a policy or certificate of insurance setting forth the name and home office address of the substituted insurer and the amount of the premium to be charged, and, if the amount of premium is less than that set forth in the notice of proposed insurance, an appropriate refund shall be made.
C.R.S. § 10-10-109 Filing form certification - filing of rating data - withdrawal of forms
10-10-109. Filing form certification - filing of rating data - withdrawal of forms. (1) All policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders delivered or issued for delivery in this state shall be certified, and the schedules of premium rates pertaining thereto shall be filed with the commissioner pursuant to subsections (3), (3.5), and (4) of this section.
(2) Repealed.
(2.5) (a) For credit insurance directly written by a state or national bank, an insurer may, by form number, elect to be subject to and have its premium rate or schedule of premium rates determined pursuant to paragraph (b) or paragraph (c) of this subsection (2.5). For credit insurance not directly written by a state or national bank, an insurer shall have its premium rate or schedule of premium rates determined by paragraph (c) of this subsection (2.5).
(b) A premium rate or schedule of premium rates shall be deemed reasonable for all purposes under this article if the rate or schedule produces, or reasonably may be expected to produce, a ratio of incurred claims to earned premium of not less than forty percent.
(c) (I) Except for credit insurance directly written by a state or national bank where the insurer has elected to be subject to paragraph (b) of this subsection (2.5), an insurer's premium rate or schedule of premium rates shall be reasonable in relation to the benefits provided and shall not be excessive, inadequate, nor unfairly discriminatory. The commissioner may establish rates that may be used by any insurer without filing. In establishing such rates, the commissioner shall consider and provide for the following component rating elements:
(A) Actual and expected loss experience;
(B) General and administrative expenses;
(C) Loss settlement and adjustment expenses;
(D) Reasonable creditor compensation;
(E) Investment income;
(F) The manner in which premiums are charged;
(G) Other acquisition costs;
(H) Reserves;
(I) Taxes;
(J) Regulatory license fees and fund assessments;
(K) Reasonable insurer profit; and
(L) Other relevant data consistent with generally accepted actuarial standards.
(II) The commissioner has the authority to promulgate rules to assure that the premium rates are reasonable in relation to the benefits provided, including the authority to regulate the compensation component of the premium rates and to limit the type and kind of benefits to which the rates shall apply. The commissioner shall work with the regulated community in the development of the component rating elements. Each credit insurer that receives combined direct credit insurance premiums in this state in the amount of one hundred thousand dollars or more shall be subject to an administrative assessment of not more than one thousand five hundred dollars per insurer annually to provide the division of insurance with funds to perform duties required by this paragraph (c).
(3) All insurers providing credit insurance that are authorized by the commissioner to conduct business in Colorado shall submit to the commissioner:
(a) An annual report listing any policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders issued or delivered in this state. Such listing shall be submitted on or before July 15, 2000, and on or before July 1 of each subsequent year. Each annual report shall include a certification by an officer of the organization that, to the best of the officer's knowledge, each policy form, certificate of insurance, notice of proposed insurance, application for insurance, endorsement, or rider in use complies with Colorado law.
ate. Such listing shall be submitted on or before July 15, 2000, and on or before July 1 of each subsequent year. Each annual report shall include a certification by an officer of the organization that, to the best of the officer's knowledge, each policy form, certificate of insurance, notice of proposed insurance, application for insurance, endorsement, or rider in use complies with Colorado law.
(b) A list of new policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders. Such list shall also include a certification by an officer of the organization that, to the best of the officer's knowledge, each policy form, certificate of insurance, notice of proposed insurance, application for insurance, endorsement, or rider in use complies with Colorado law.
(3.5) If an insurer elects to file pursuant to paragraph (c) of subsection (2.5) of this section, commencing July 1, 2002, the insurer shall offer only component rating for credit insurance premiums pursuant to subsection (2.5) of this section for all new policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders delivered or issued for delivery and phase in all existing creditor accounts to component rating accounts by no later than July 1, 2003.
(4) The commissioner shall have the power to examine and investigate insurers authorized to conduct business within Colorado to determine whether credit insurance policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders comply with the certification made by the insurer's officer and with Colorado law. The commissioner may promulgate rules regarding the elements necessary in an insurer's certification of compliance with Colorado law.
(5) and (6) (Deleted by amendment, L. 2000, p. 467, § 7, effective August 2, 2000.)
(7) Any order or final determination of the commissioner under the provisions of this section shall be subject to judicial review.
(8) (a) If, after an examination or investigation of an insurer, the commissioner has cause to believe that such insurer or any rate, rating schedule, rating plan, or rating system made or used by the insurer does not comply with applicable requirements, the commissioner shall give notice in writing to such insurer, stating in the notice in what manner and to what extent such noncompliance is alleged to exist and specifying a reasonable time, not less than ten days after the date of receipt of such notice, by which such noncompliance shall be corrected.
(b) If the commissioner has good cause to believe that an insurer's noncompliance is willful or, if within the period prescribed by the commissioner in the notice issued in accordance with paragraph (a) of this subsection (8), the insurer does not either make such changes as may be necessary to correct the noncompliance specified by the commissioner or establish to the satisfaction of the commissioner that such specified noncompliance does not exist, the commissioner may hold a public hearing in accordance with section 24-4-105, C.R.S., on the subject of the noncompliance.
ance with paragraph (a) of this subsection (8), the insurer does not either make such changes as may be necessary to correct the noncompliance specified by the commissioner or establish to the satisfaction of the commissioner that such specified noncompliance does not exist, the commissioner may hold a public hearing in accordance with section 24-4-105, C.R.S., on the subject of the noncompliance.
(c) (I) If, after a public hearing, the commissioner finds that any rate violates the applicable provisions of this title, the commissioner may issue an order to the insurer specifying in what respects such violation exists and stating when, within a reasonable period of time, the further use of such rate or rating system by such insurer or rating organization in contracts of insurance made after such time shall be prohibited. In such order, the commissioner may require a refund to the policyholder in an amount equal to the excess premium plus a maximum of eighteen percent interest. The amount of the refund, plus interest, shall be computed from the effective date of the rate used on the individual policyholder contract to the commencement date of the hearing on the rate. Interest shall be computed as simple interest per annum.
(II) In addition to any other remedies or penalties provided by law, the commissioner may suspend or revoke, in whole or in part, the certificate of authority of any insurer that fails to comply with an order of the commissioner within the time specified in such order. The commissioner shall not suspend or revoke the license or certificate of authority for failure to comply with an order until the time prescribed for an appeal of the order has expired, or, if an appeal has been taken, until such order has been affirmed. The commissioner may determine when a suspension or revocation of a certificate of authority shall become effective. An order of suspension shall remain in effect for the period fixed by the commissioner unless the commissioner modifies or rescinds such suspension or until the order upon which such suspension is based is modified, rescinded, or reversed. No license shall be suspended or revoked except pursuant to a written order of the commissioner, stating the commissioner's findings, made after a hearing held upon not less than ten days' written notice to such insurer specifying the alleged violation.
(d) (I) If, after a public hearing, the commissioner finds that the violation of any of the applicable provisions of this title was willful, the commissioner may suspend or revoke, in whole or in part, the certificate of authority of such insurer.
(II) If a failure to comply with an order of the commissioner within the time specified in such order is willful, the insurer shall be liable to the state in an amount not to exceed five thousand dollars for such failure. The commissioner shall collect such amount and may bring a civil action in the name of the people of the state of Colorado to enforce collection. Such penalty may be in addition to the remedy provided in subparagraph (I) of this paragraph (d). All moneys collected by the commissioner shall be paid into the general fund.
(e) Any finding, determination, rule, ruling, or order made by the commissioner pursuant to this subsection (8) is subject to judicial review by the court of appeals. Such review shall be performed in accordance with the provisions of section 24-4-106 (11), C.R.S.
C.R.S. § 10-10-110 Premiums and refunds
10-10-110. Premiums and refunds. (1) (a) If an insurer has elected to file pursuant to section 10-10-109 (2.5)(b), the insurer may revise its schedules of premium rates from time to time and shall file such revised schedules with the commissioner. No insurer shall issue any credit insurance policy for which the premium rate exceeds that determined by the schedules of such insurer as then on file with the commissioner.
(b) If an insurer has elected to file pursuant to section 10-10-109 (2.5)(c), the insurer may file with the commissioner and use any premium rate or schedule of premium rates that is less than or equal to the premium rate established by the commissioner. Insurers shall not use premium rates higher than the premium rates established by the commissioner.
(2) (a) Upon prepayment in full of the indebtedness, all credit insurance issued on such indebtedness shall terminate.
(b) An insurer, upon receiving notice pursuant to section 5-4-108 (2), C.R.S., that a refund or credit of unearned premiums on insurance issued under this article is required by section 5-4-108 (1), C.R.S., shall make the appropriate refund or credit to the person entitled thereto within thirty days of receipt of such notice. The formula to be used in computing the refund or credit shall be filed with and approved by the commissioner. No refund of less than one dollar need be made.
(3) If a creditor requires a debtor to make any payment for credit insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to such debtor and shall promptly make an appropriate credit to the account.
(4) The amount charged to a debtor for any credit insurance shall not exceed the premiums charged by the insurer, as computed at the time the charge to the debtor is determined.
(5) Nothing in this article shall be construed to authorize any payments for insurance now prohibited under any statute, or rule thereunder, governing credit transactions.
C.R.S. § 10-10-111 Issuance of policies
10-10-111. Issuance of policies. All policies of credit insurance shall be delivered or issued for delivery in this state only by an insurer authorized to do an insurance business therein and shall be issued only through holders of licenses or authorizations issued by the commissioner.
C.R.S. § 10-10-112 Claims
10-10-112. Claims. (1) All claims shall be promptly reported to the insurer or its designated claim representative, and the insurer shall maintain adequate claim files. All claims shall be settled as soon as possible and in accordance with the terms of the insurance contract.
(2) All claims shall be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions or upon direction of such claimant to one specified.
(3) No plan or arrangement shall be used whereby any person, firm, or corporation, other than the insurer or its designated claim representative, is authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims, but a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer.
C.R.S. § 10-10-113 Existing insurance - choice of insurer
10-10-113. Existing insurance - choice of insurer. When credit insurance is required as additional security for any indebtedness, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or of procuring and furnishing the required coverage through any insurer authorized to transact an insurance business within this state.
C.R.S. § 10-10-114 Enforcement
10-10-114. Enforcement. The commissioner may, after notice and hearing, issue such rules and regulations as he deems appropriate for the supervision of this article. If the commissioner finds that there has been a violation of this article or any rules or regulations issued pursuant thereto, and after written notice thereof and hearing given to the insurer or other person authorized or licensed by the commissioner, he shall set forth the details of his findings, together with an order for compliance by a specified date. Such order is binding on the insurer or other person authorized or licensed by the commissioner on the date specified, unless sooner withdrawn by the commissioner or a stay thereof has been ordered by a court of competent jurisdiction.
C.R.S. § 10-10-115 Judicial review
10-10-115. Judicial review. Any party to the proceeding affected by an order of the commissioner shall be entitled to judicial review by the court of appeals by following the procedure set forth in section 24-4-106 (11), C.R.S.
C.R.S. § 10-10-116 Penalties
10-10-116. Penalties. In addition to any other penalty provided by law, any person, firm, or corporation which violates an order of the commissioner after it has become final, and while such order is in effect, shall, upon proof thereof to the satisfaction of the court, forfeit and pay to the division of insurance a sum not to exceed two hundred fifty dollars which may be recovered in a civil action; except that, if such violation is found to be willful, the amount of such penalty shall be a sum not to exceed one thousand dollars. The commissioner, in his discretion, may revoke or suspend the insurance license or certificate of authority of the person, firm, or corporation guilty of such violation. Such order for suspension or revocation shall be upon notice and hearing and shall be subject to judicial review as provided in section 10-10-115.
C.R.S. § 10-10-117 Insurance expense not computed as cost of loan
10-10-117. Insurance expense not computed as cost of loan. In connection with insurance which is permitted under this article, the premium and any gain or advantage to the creditor, or to any employee, affiliate, or associate of the creditor, from such insurance or its sale shall not be deemed to be an additional or further interest, discount, or charge, and the creditor may receive commissions on the premium paid for such insurance if the creditor or an employee of the creditor is a duly licensed insurance broker or agent under the insurance laws of the state of Colorado.
C.R.S. § 10-10-118 Charge accounts
10-10-118. Charge accounts. Nothing in this article shall be construed to permit credit insurance to be required by any creditor for revolving charge accounts or any other charge accounts for the purchase of goods or services.
C.R.S. § 10-10-119 Truncated coverage
10-10-119. Truncated coverage. (1) If the debtor elects truncated coverage, at the time of election the creditor shall inform the debtor in writing of the term of the insurance coverage and that the coverage will terminate prior to the scheduled maturity date of the indebtedness.
(2) A group certificate or individual policy providing truncated credit insurance coverage shall disclose the term of the truncated insurance coverage and specify that the term of insurance coverage will terminate prior to the scheduled maturity date of the indebtedness. The termination disclosure shall appear in prominent type on the first page of the group certificate or individual policy.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-10.docxFetched: 10/6/2026