CO Code § 10-4-418 (2021)
2021 Colorado Code|Title 10 - Insurance|Article 4 - Property and Casualty Insurance|Part 4 - Rate Regulation|§ 10-4-418. Enforcement Procedures - Penalties

  Any person aggrieved by any rate charged, rating plan, rating system, underwriting rule, policy form, certificate, or contract of insurance or rider followed or adopted by an insurer, advisory organization, or rating organization may request the insurer, advisory organization, or rating organization to review the manner in which the rate, plan, system, rule, form, certificate, or contract or rider has been applied with respect to insurance afforded him. Such request may be made by his authorized representative and shall be written. If the request is not granted within thirty days after it is made, it may be treated as rejected. Any person aggrieved by the action of an insurer, advisory organization, or rating organization in refusing the review requested or in failing or refusing to grant all or part of the relief requested may file a written complaint and request for hearing with the commissioner, specifying the grounds relied upon. If the commissioner finds that probable cause for the complaint does not exist or that the complaint is not made in good faith, he shall deny the hearing; however, if he finds that the complaint charges a violation of this title and that the complainant would be aggrieved if the violation is proven, he shall proceed as provided in subsection (2) of this section.      If, after examination or inspection of an insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance, or upon the basis of other information, or upon sufficient complaint as provided in subsection (1) of this section, the commissioner has good cause to believe that such insurer, organization, group, or association, or any rate, rating plan, rating system, underwriting rule, policy form, certificate, contract of insurance or rider, made or used by any such insurer, advisory organization, or rating organization, or proposals thereof made by advisory or rating organizations does not comply with the applicable requirements and standards of this title, he shall, unless he has good cause to believe that such noncompliance is willful, give notice in writing to such insurer, organization, group, or association, stating therein in what manner and to what extent such noncompliance is alleged to exist and specifying therein a reasonable time, not less than ten days thereafter, in which such noncompliance shall be corrected. Notices and filings of underwriting rules required under this section shall be confidential as between the commissioner and the parties.    The commissioner shall not find that a policy form, certificate, or contract of insurance or rider does not comply with the applicable requirements and standards of this title on the ground that it excludes coverage of claims made by a member of a household against another member of the same household. Such exclusions are in conformity with the public policy of this state.    Repealed.         If the commissioner has good cause to believe that such noncompliance is willful or if, within the period prescribed by the commissioner in the notice required by subsection (2) of this section, the insurer, organization, group, or association does not 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 connection therewith. Within a reasonable period of time, not less than ten days before the date of such hearing, he shall mail a written notice of the hearing to such insurer, organization, group, or association. The notice given under this subsection (3) shall state in what manner and to what extent noncompliance is alleged to exist and the matters to be considered at such hearing. The hearing shall not include subjects not specified in the notice. The hearing shall be conducted in accordance with section 24-4-105, C.R.S., and the commissioner shall have all the powers granted in said section.    Any insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance aggrieved by an order or decision of the commissioner made without a hearing may, within thirty days after notice of the order or decision to the corporation, make written application to the commissioner for a hearing thereon. The commissioner shall hold a hearing as provided in the applicable provisions of article 4 of title 24, C.R.S. Within fourteen days after such hearing, the commissioner shall affirm, reverse, or modify his previous action, specifying his reasons therefor.       If, after a hearing pursuant to subsection (3) of this section, the commissioner finds:   That any rate, rating plan, or rating system violates the provisions of this title applicable to it, the commissioner may issue an order to the insurer or rating organization which has been the subject of the hearing, 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 thereafter shall be prohibited. In such order the commissioner may require the excess premium plus a maximum of eighteen percent interest to be refunded to the policyholder. 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.    That an insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance is in violation of the provisions of this title applicable to it, other than the provisions dealing with rates, rating plans, or rating systems, he may issue an order to such insurer, organization, group, or association which has been the subject of the hearing, specifying in what respects such violation exists and requiring compliance within a specified time thereafter;    That any policy form, policy, certificate, contract of insurance or rider, or any portion or any proposal thereof made by advisory or rating organizations contains any provision or style of presentation which is deceptive or misleading or renders its use hazardous to the public or the policyholders or otherwise does not comply with the requirements of law, he may issue an order to such insurer, organization, group, or association which has been the subject of the hearing, prohibiting the further use of any such form in this state;    That the violation of any of the provisions of this title applicable to it by any insurer or rating organization which has been the subject of hearing was willful, he may suspend or revoke, in whole or in part, the certificate of authority of such insurer or the license of such rating organization with respect to the class of insurance which has been the subject matter of the hearing;    That any rating organization has willfully engaged in any fraudulent or dishonest act or practice, he may suspend or revoke, in whole or in part, the license of such organization in addition to any other penalty provided in this title.       In addition to other remedies or penalties provided by law:   The commissioner may suspend or revoke, in whole or in part, the license of any rating organization or the certificate of authority of any insurer which fails to comply with an order of the commissioner within the time limited by 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 therefrom 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 license or certificate of authority shall become effective. An order of suspension shall remain in effect for the period fixed by the commissioner, unless he 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 upon a written order of the commissioner, stating his findings, made after a hearing held upon not less than ten days' written notice to such person or organization specifying the alleged violation.    If a failure to comply with an order of the commissioner within the time limited by such order is willful, the rating organization or insurer shall be liable to the state in an amount not exceeding five thousand dollars for such failure. The commissioner shall collect the amount so payable 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 paragraph (a) of this subsection (5). All moneys collected by the commissioner under this paragraph (b) shall be paid into the general fund of the state of Colorado.       Any findings, determination, rule, ruling, or order made by the commissioner shall be subject to judicial review by the court of appeals, and proceedings on review shall be in accordance with the provisions of section 24-4-106 (11), C.R.S.    This section shall apply to insurers providing coverage for exempt commercial policyholders, as defined pursuant to section 10-4-1402 and rules adopted by the commissioner pursuant to that section, that the commissioner determines to be anticompetitive, as described in section 10-4-415.     History. Source: L. 79: Entire part R&RE, p. 374, § 8, effective July 1. L. 86: (1), (2), and (4)(c) amended, p. 580, § 5, effective July 1. L. 91: (4)(a) amended, p. 1199, § 6, effective April 11. L. 92: (6) amended, p. 1558, § 58, effective May 20; (2)(c) added, p. 1758, § 2, effective June 5. L. 99: (7) added, p. 387, § 6, effective January 15, 2000. L. 2007: (2)(c) repealed, p. 1922, § 3, effective January 1, 2008.    Editor's note:   This section is similar to former §§ 10-4-317 and 10-4-406 as they existed prior to 1979.   ANNOTATION   Rational basis test applicable to equal protection challenge of household exclusion provision where no fundamental right or suspect class is at issue. Allstate v. Feghali, 814 P.2d 863 (Colo. 1991); Mayo v. Nat'l Farmers Union Prop. & Cas. Co., 833 P.2d 54 (Colo. 1992).   Household exclusions in automobile liability policies do not violate legislative purpose and the public policy underlying this section. Allstate v. Feghali, 814 P.2d 863 (Colo. 1991); Mayo v. Nat'l Farmers Union Prop. & Cas. Co., 833 P.2d 54 (Colo. 1992); Brna v. Farmers Ins. Exch., 897 P.2d 851 (Colo. App. 1994).   Nor do they violate policy holders' right to equal protection guaranteed by the Colorado and United States constitutions. Allstate v. Feghali, 814 P.2d 863 (Colo. 1991).   Nor do they transform automobile defined in insurance policy as an “insured automobile” into an “uninsured automobile” for purpose of allowing insured to receive uninsured motorist benefits. Allstate v. Feghali, 814 P.2d 863 (Colo. 1991); Mayo v. Nat'l Farmers Union Prop. & Cas. Co., 833 P.2d 54 (Colo. 1992).   Nor do they infringe upon fundamental right to travel. Mayo v. Nat'l Farmers Union, 833 P.2d 54 (Colo. 1992).   Household exclusion clause in automobile insurance policies issued before effective date of this section is unenforceable. The provision in this section stating that exclusion clauses are compatible with state public policy applies prospectively. People v. Dillings, 884 P.2d 275 (Colo. 1994).   Use of the phrase “claims made by a member of a household against another member of the same household” in subsection (2)(b) evidences a clear intent to permit “household exclusions”, but this language does not redeem a separate “named insured exclusion.” Dotson v. Pearson, 903 P.2d 19 (Colo. App. 1994), aff'd, 913 P.2d 27 (Colo. 1996).