Opinion ID: 171597
Heading Depth: 4
Heading Rank: 2

Heading: Complying Policy

Text: Section 10-4-703(2) defined a complying policy as: a policy of insurance which provides the coverages and is subject to the terms and conditions required by this part 7, and is certified by the insurer and the insurer has filed a certification with the commissioner that such policy, contract, or endorsement conforms to Colorado law and any rules or regulations promulgated by the commissioner. Part 7 required coverages for liability, and PIP medical expenses, rehabilitation, wage loss, essential services, and death benefits. Zahner v. Am. Family Mut. Ins. Co., 179 P.3d 98, 102 (Colo.Ct.App. 2007). If a policy provides these coverages, it is a complying policy. Id. Here, plaintiffs contend that portions of their policies do not provide the coverages required by Part 7. They point to provisions that: (1) prevent excess rehabilitation benefits from covering medical expenses; and (2) reduce the maximum of payable benefits by the amount of deductibles and co-insurance. Even if we were to assume that plaintiffs are correct in their reading of the policies, this argument alone does not change the aggregate limits set forth in the policies. If a policy does not provide these minimum coverages required by the CAARA, the policies would be reformed to provide those minimum coverages. Colby v. Progressive Cas. Ins. Co., 928 P.2d 1298, 1300 n. 1 (Colo.1996) (also noting that the CAARA is incorporated into every automobile insurance policy). Reformation of the policy only alters the defective portion to comply with the CAARA, leaving the remainder unchanged. Stickley v. State Farm Mut. Auto. Ins. Co., 505 F.3d 1070, 1080 (10th Cir.2007) ([W]hen an insurance policy is found to violate CAARA, only the defective portion of the policy is reformed to comply with CAARA. It does not wipe the slate clean and give the insured the fullest amount of benefits available for every category possible.). As a result, a policy that initially contained aggregate limits, but is later reformed, continues to contain aggregate limits after reformation. See Clark v. State Farm Mut. Auto. Ins. Co., 433 F.3d 703, 711 (10th Cir.2005) (Thus, we agree with the district court that the ... policy's $200,000 aggregate limit applies to benefits under the reformed policy.).