CO Code § 10-4-110.5 (2021)
2021 Colorado Code|Title 10 - Insurance|Article 4 - Property and Casualty Insurance|Part 1 - General|§ 10-4-110.5. Notice of Intent Prior to Unilateral Increase in Premium or Decrease in Coverage Previously Provided in Certain Policies of Insurance

  No insurer shall increase the premium unilaterally or decrease the coverage benefits on renewal of a policy of insurance that provides coverages on commercial exposures such as general comprehensive liability, municipal liability, automobile liability and physical damage, fidelity and surety, fire and allied lines, inland marine, errors and omissions, excess liability, products liability, police liability, professional liability, or false arrest insurance unless the insurer mails by first-class mail to the named insured, at the last address shown in the insurer's records, at least forty-five days in advance a notice, accompanied by the reasons therefor, stating the renewal terms and the amount of premium due. If the insurer fails to furnish the renewal terms and the statement of the amount of premium due at least forty-five days prior to the expiration date of the policy, the insurer shall automatically extend the existing policy for a period of forty-five days and the premium for this extended period shall be prorated based on the premium applicable to the existing policy. If the insurer fails to meet the requirements of this section prior to the expiration date of the existing policy, the insurer shall be deemed to have renewed the insured's policy for an identical policy period at the same terms, conditions, and premium as the existing policy.    A notice of a decrease in coverage benefits during the term of a policy of insurance identified in subsection (1) of this section shall be valid only if it sets forth the reason for the decrease and is based on one or more of the following reasons:   Nonpayment of premium;    A false statement knowingly made by the insured on the application for insurance;    A substantial change in the exposure or risk other than that indicated in the application and underwritten as of the effective date of the policy unless the insured has notified the insurer of the change and the insurer accepts such change.       This section shall not apply to insurance companies authorized to write surplus line insurance in Colorado.     History. Source: L. 86: Entire section added, p. 574, § 6, effective July 1. L. 87: (1) amended and (3) added, p. 426, § 4, effective May 1.    ANNOTATION   Plain language of notice provision in subsection (1) reveals that purpose of statute is to provide 45 days' notice to insured of insurer's unilateral intent to increase premium or decrease coverage upon renewal of existing policy. Accordingly, subsection (1) either extends or renews the existing policy if insurer provides late or inadequate notice to insured. Granite State Ins. Co. v. Ken Caryl Ranch Master Ass'n, 183 P.3d 563 (Colo. 2008).   Under plain language of subsection (1), first sentence establishes notice requirements, and second and third sentences provide distinct remedies to insured if insurer fails to comply with notice requirements set forth in first sentence. If insurer fails to provide adequate notice at least 45 days before expiration of existing policy, second sentence automatically extends policy for 45 days at prorated premium. If insurer fails to meet “requirements” of notice statute before expiration of existing policy, third sentence imposes full-term renewal of policy under same terms, conditions, and premium as existing policy. Granite State Ins. Co. v. Ken Caryl Ranch Master Ass'n, 183 P.3d 563 (Colo. 2008).   First sentence of notice statute sets forth more than one requirement. First sentence requires notice to be: (1) Sent by first-class mail to insured's last known address; (2) sent at least 45 days before expiration of existing policy; (3) accompanied by reasons for change in policy premiums or coverage; and (4) accompanied by renewal terms and amount of premium due. Use of plural term “requirements” in third sentence refers to notice requirements in first sentence, imposing full-term renewal of existing policy if insurer fails to fulfill notice requirements before expiration of policy. Granite State Ins. Co. v. Ken Caryl Ranch Master Ass'n, 183 P.3d 563 (Colo. 2008).   Where insurer provided late but adequate notice, 5 days before expiration of policy, of reduced coverage under renewal policy, remedy in second sentence of subsection (1) applied to automatically extend existing policy for 45 days at prorated premium. Since insurer adequately notified insured of reduced coverage before expiration of policy, full-term renewal remedy in third sentence of subsection (1) was not triggered. Granite State Ins. Co. v. Ken Caryl Ranch Master Ass'n, 183 P.3d 536 (Colo. 2008).   The notice requirement of this section does not apply to a public entity self-insurance pool. Under the plain language of § 24-10-115.5 , public entity self-insurance pools, such as the Colorado intergovernmental risk sharing agency, are not to be construed to be insurance companies and are not otherwise subject to state laws regulating insurance companies except §§ 10-1-203 , 10-1-204 (1) to (5) and (10). City of Arvada v. Colo. Intergovernmental Risk Sharing Agency, 988 P.2d 184 (Colo. App. 1999), aff'd, 19 P.3d 10 (Colo. 2001).   This section does not apply to personal automobile insurance policies; by its plain terms, it applies to policies that cover commercial exposures. Progressive Cas. Ins. Co. v. Moore, 2012 COA 145 , 292 P.3d 1124.   Insurer's letter to insured that merely notified insured of a change in policy number and did not inform insured of a change in insurance coverage was deficient under this section because it failed to notify insured of the decrease in coverage and to identify the reasons for the decrease. Gustafson v. Am. Family Mut. Ins. Co., 901 F. Supp. 2d 1289 (D. Colo. 2012 ).