C.R.S. Section 10-4-116
Use of credit information

(1)

An insurer that offers personal lines of property and casualty insurance shall not:

(a)

Use an insurance score that is calculated using income, gender, address, United States postal zip code, ethnic group, religion, marital status, or nationality of the consumer;

(b)

Deny, cancel, or fail to renew a policy of personal lines of property and casualty insurance on the basis of credit information, without consideration of any other applicable underwriting factor that is independent of credit information prohibited pursuant to paragraph (a) of this subsection (1);

(c)

Base an insured’s renewal rates for personal lines of property and casualty insurance upon credit information, without consideration of any other applicable factor independent of credit information;

(d)

Take an adverse action against a consumer because he or she does not have a credit card account, without consideration of any other applicable factor independent of credit information;

(e)

Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal lines of property and casualty insurance issued in this state, unless the insurer does one of the following:

(I)

Treats the consumer in a manner otherwise approved by the commissioner, if the insurer presents information that such an absence or inability relates to the risk for the insurer;

(II)

Treats the consumer as if he or she had neutral credit information, as defined by the insurer; or

(III)

Excludes the use of credit information as a factor and uses only other underwriting criteria;

(f)

Take an adverse action against a consumer based on credit information, unless the insurer obtains and uses a credit report issued or an insurance score calculated within ninety days before the date the policy is first written or renewal is issued;

(g)

Use credit information unless, not later than every thirty-six months following the last time that the insurer obtained current information for the consumer, the insurer recalculates the consumer’s insurance score or obtains an updated credit report. Notwithstanding any provision of this section to the contrary, an insurer:

(I)

At annual renewal, upon the request of a consumer or the consumer’s agent, shall reunderwrite and rerate the policy based upon a current credit report or insurance score. An insurer may recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once during a twelve-month period.

(II)

May obtain current credit information upon a renewal before the thirty-sixth month of coverage, if obtaining current credit information is consistent with the insurer’s underwriting guidelines;

(III)

Notwithstanding subparagraph (I) of this paragraph (g), need not obtain current credit information for an insured if one of the following situations apply:

(A)

The insurer is treating the insured in a manner otherwise approved by the commissioner;

(B)

The insured is in the most-favorably-priced tier of the insurer, within a group of affiliated insurers; except that the insurer may order a credit report if ordering the credit report is consistent with its underwriting guidelines;

(C)

Credit was not used for underwriting or rating the insured when the insured’s initial policy of insurance was written; except that an insurer may use credit for underwriting or rating the insured upon renewal if the use of credit is consistent with its underwriting guidelines; or

(D)

The insurer reevaluates the insured beginning no later than thirty-six months after inception and thereafter based upon other underwriting or rating factors, excluding credit information.

(h)

Use the following as a negative factor in an insurance scoring methodology or in reviewing credit information for the purpose of underwriting or rating a policy of personal lines of property and casualty insurance:

(I)

Credit inquiries not initiated by the consumer or inquiries requested by the consumer for his or her own credit information;

(II)

Inquiries relating to insurance coverage, if so identified on a consumer’s credit report;

(III)

Collection accounts with a medical industry code, if so identified on the consumer’s credit report;

(IV)

Multiple lender inquiries, if coded by the consumer reporting agency on the consumer’s credit report as being from the motor vehicle lending industry and made within thirty days after one another, unless only one inquiry is considered;

(V)

Multiple lender inquiries, if coded by the consumer reporting agency on the consumer’s credit report as being from the home mortgage industry and made within thirty days of one another, unless only one inquiry is considered;

(VI)

Identity theft that may be sufficiently and independently corroborated;

(VII)

Credit information adversely impacted by a dissolution of marriage or by the credit information of a former spouse.

(2)

If it is determined through the dispute resolution process as set forth in the federal “Fair Credit Reporting Act”, 15 U.S.C. sec. 1681i (a)(5), that the credit information of a current insured was incorrect or incomplete and if the insurer receives notice of a determination from either the consumer reporting agency or from the insured, the insurer shall reunderwrite and rerate the consumer within thirty days after receiving the notice. After reunderwriting or rerating the insured, the insurer shall make any adjustments necessary, consistent with its underwriting and rating guidelines. If an insurer determines that the insured has overpaid a premium, the insurer shall refund to the insured the amount of overpayment calculated back to the shorter of either the last twelve months of coverage or the actual policy period.

(3)

Intentionally left blank —Ed.

(a)

If an insurer offering personal lines of property and casualty coverage uses credit information in underwriting or rating a consumer, the insurer or the producer shall disclose, either on the insurance application or at the time the insurance application is taken, that it may obtain credit information in connection with such application. The disclosure shall be either in writing or in the same medium as the application for insurance is taken. The insurer may provide the disclosure statement required pursuant to this subsection (3) to an insured on a renewal policy, if the consumer has previously been provided a copy of the disclosure statement.

(b)

Use of the following disclosure statement shall constitute compliance with the provisions of this subsection (3); except that an insurer may use different terms or phrases to communicate the same meaning:
In connection with this application for insurance, we may review your credit report or obtain or use a credit-based insurance score based on the information contained in that credit report. We may use a third party in connection with the development of your insurance score.

(4)

If an insurer takes an adverse action based upon credit information, the insurer shall meet the notice requirements of this subsection (4). Specifically, an insurer shall:

(a)

Provide notification to the consumer that an adverse action has been taken, in accordance with the requirements of the federal “Fair Credit Reporting Act”, 15 U.S.C. sec. 1681m (a); and

(b)

Provide notification to the consumer explaining the reason for the adverse action. The reasons shall be provided in sufficiently clear and specific language so that a person may identify the basis for the insurer’s decision to take adverse action. The notification shall include a description of up to four factors that were the primary influences of the adverse action. The use of generalized terms such as “poor credit history”, “poor credit rating”, or “poor insurance score” does not meet the explanation requirements of this subsection (4). Standardized credit explanations provided by consumer reporting agencies or other third-party vendors are deemed to comply with this subsection (4).

(5)

An insurer that uses insurance scores to underwrite and rate risk shall file its scoring models or other scoring processes with the commissioner. A third party may file scoring models on behalf of an insurer. A filing that includes insurance scoring may include loss experience justifying the use of credit information. The insurer may request that information requested pursuant to this subsection (5) not be open to public inspection or considered an open record pursuant to article 72 of title 24, C.R.S.

(6)

An insurer shall indemnify, defend, and hold a producer harmless against all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of the producer who obtains or uses credit information or insurance scores for an insurer, so long as the producer follows the instructions of or procedures established by the insurer and complies with any applicable law or rule. Nothing in this section shall be construed to provide a consumer or insured with a cause of action that does not exist in the absence of this section.

(7)

Intentionally left blank —Ed.

(a)

A consumer reporting agency shall not provide or sell data or lists that include information that, in whole or in part, was submitted in conjunction with an insurance inquiry about a consumer’s credit information or a request for a credit report or insurance score. Information that may not be provided or sold includes, but is not limited to, the expiration dates of an insurance policy or other information that may identify periods in which a consumer’s insurance may expire and the terms and conditions of the consumer’s insurance coverage.

(b)

The restrictions provided in paragraph (a) of this subsection (7) shall not apply to data or lists the consumer reporting agency supplies to the insurance producer from whom information was received, the insurer on behalf of whom the producer acted, or such insurer’s affiliates or holding companies.

(c)

Nothing in this subsection (7) shall be construed to restrict an insurer from being able to obtain a claims history report or a motor vehicle report.

(8)

For the purposes of this section, unless the context otherwise requires:

(a)

“Adverse action” means a denial or cancellation of, an increase in any charge for, or a reduction or other unfavorable change in the terms of coverage or amount of any insurance existing or applied for in connection with the underwriting of personal lines of property and casualty insurance coverages.

(b)

“Affiliate” means a company that controls, is controlled by, or is under common control with another insurer.

(c)

“Applicant” means a person who has applied to be covered under a policy of personal lines of property and casualty insurance.

(d)

“Beneficiary or claimant” includes an insured person and a third-party claimant.

(e)

“Consumer” means an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of personal lines of property and casualty insurance or an application for personal lines of property and casualty insurance coverage.

(f)

“Consumer reporting agency” shall have the same meaning as in section 5-16-103 (6).

(g)

“Credit information” means credit-related information derived from a credit report itself or provided on an application for personal lines of property and casualty insurance. Information that is not credit-related shall not be considered “credit information” regardless of whether it is contained in a credit report or in an application or is used to calculate an insurance score.

(h)

“Credit report” means a written, oral, or other communication of information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, or credit capacity that is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal lines of property and casualty insurance premiums, eligibility for coverage, or tier placement.

(i)

“Insurance score” means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information for the purpose of predicting the future insurance loss exposure of an individual applicant or insured.

Source: Section 10-4-116 — Use of credit information, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-10.­pdf (accessed Oct. 20, 2023).

10‑4‑101
Legislative declaration 10‑4‑102
Federal “voluntary fair access to insurance required, property insurance program” - state qualification 10‑4‑103
Voluntary partial payment of liability claims without admission of liability 10‑4‑104
Competency of minor to contract for insurance - nonavoidance 10‑4‑105
Valuation of bonds and policies other than life 10‑4‑106
Assigned risks 10‑4‑106.5
Medical malpractice insurers - requirement to provide information to the department of public health and environment 10‑4‑107
Cancellation of medical malpractice policies 10‑4‑108
Notice 10‑4‑109
Nonrenewal of medical malpractice policies 10‑4‑109.5
Notice of intent prior to unilateral increase in premium or decrease in coverage previously provided in medical malpractice policies 10‑4‑109.6
Medical malpractice insurers - protections relating to reproductive health care - definition 10‑4‑109.7
Notice of intent prior to cancellation of certain policies of insurance 10‑4‑110
Notice of intent prior to nonrenewal of certain policies of insurance 10‑4‑110.3
Exclusions where claim involves sexual misconduct - void 10‑4‑110.4
Exclusion - claims involving loss in progress not known to insured 10‑4‑110.5
Notice of intent prior to unilateral increase in premium or decrease in coverage previously provided in certain policies of insurance 10‑4‑110.6
Homeowner’s insurance - definition 10‑4‑110.7
Cancellation or nonrenewal - homeowner’s insurance policies 10‑4‑110.8
Homeowner’s insurance - prohibited and required practices - estimates of replacement value - additional living expense coverage - copies of policies - personal property contents coverage - inventory of personal property - requirements concerning total loss scenarios resulting from wildlife disasters - definitions - rules 10‑4‑110.9
Fire insurance - issuance and renewal of policies within federally designated disaster areas 10‑4‑111
Summary disclosure forms required 10‑4‑112
Property damage - time of payment 10‑4‑113
Exemptions 10‑4‑114
Requirements on hazard insurance coverage for loans secured by real property 10‑4‑115
Private utilization review 10‑4‑116
Use of credit information 10‑4‑117
Loss history information report - notice to insured - definition 10‑4‑118
Severability 10‑4‑119
Monthly and electronic payment of premiums 10‑4‑120
Unfair or discriminatory trade practices - legislative declaration 10‑4‑121
Authority of insurer to protect policyholders’ property - emergency 10‑4‑301
Bond executed by surety company 10‑4‑302
Release of surety - other security 10‑4‑303
Application for release of surety - refund 10‑4‑304
Place of deposit 10‑4‑305
Bond part of expense 10‑4‑401
Purpose - applicability 10‑4‑402
Definitions 10‑4‑403
Standards for rates - competition - procedure - requirement for independent actuarial opinions regarding 1991 legislation 10‑4‑404
Rate administration 10‑4‑404.5
Rating plans - property and casualty type II insurers - rules 10‑4‑405
Filing of rating information - certain coverages 10‑4‑406
Review of filings - certain coverages 10‑4‑407
Hearings 10‑4‑408
Rating organization - study of workers’ compensation rates - premium reductions - adoption of rules 10‑4‑409
Rates furnished - cooperation among organizations 10‑4‑410
Advisory organizations 10‑4‑411
Joint underwriting 10‑4‑412
Assigned risk motor vehicle insurance 10‑4‑413
Records required to be maintained 10‑4‑414
Examinations 10‑4‑415
Prohibition against anticompetitive behavior 10‑4‑416
Prohibiting changes in rates or coverages 10‑4‑417
False or misleading information 10‑4‑418
Enforcement procedures - penalties 10‑4‑419
Claims-made policy forms 10‑4‑419.5
Workers’ compensation form certification 10‑4‑420
Risk management procedures 10‑4‑421
Notice of rate increases and decreases 10‑4‑501
Short title 10‑4‑502
Legislative declaration 10‑4‑503
Definitions 10‑4‑504
Scope 10‑4‑505
Construction 10‑4‑506
Colorado insurance guaranty association 10‑4‑507
Board of directors 10‑4‑508
Powers and duties of association 10‑4‑508.5
Aggregate liability of association 10‑4‑509
Plan of operation 10‑4‑510
Duties and powers of commissioner 10‑4‑511
Effect of paid claims 10‑4‑512
Nonduplication of recovery 10‑4‑513
Prevention of insolvencies 10‑4‑514
Examination of association 10‑4‑515
Tax exemption 10‑4‑516
Recognition of assessments in rates 10‑4‑517
Immunity 10‑4‑518
Stay of proceedings 10‑4‑519
Termination - distribution of funds 10‑4‑520
Advertising 10‑4‑601
Definitions 10‑4‑601.5
Administrative authority 10‑4‑602
Basis for cancellation 10‑4‑603
Notice 10‑4‑604
Nonrenewal 10‑4‑604.5
Issuance or renewal of insurance policies - proof of insurance provided by certificate, card, or other media 10‑4‑605
Proof of notice 10‑4‑606
Further notice 10‑4‑607
Immunity 10‑4‑608
Exemptions 10‑4‑609
Insurance protection against uninsured motorists - applicability 10‑4‑610
Property damage protection against uninsured motorists 10‑4‑611
Elimination of discounts - damage by uninsured motorist 10‑4‑613
Glass repair and replacement 10‑4‑614
Inflatable restraint systems - replacement - verification of claims - definition 10‑4‑615
Motorist insurance identification database program - reporting required - fine 10‑4‑616
Disclosure of credit reports 10‑4‑617
Insurers - biannual fee - auto theft prevention authority 10‑4‑619
Coverage compulsory 10‑4‑620
Required coverage 10‑4‑621
Required coverages are minimum 10‑4‑622
Required provision for intrastate and interstate operation 10‑4‑623
Conditions and exclusions 10‑4‑624
Self-insurers 10‑4‑625
Premium payments 10‑4‑626
Prohibited reasons for nonrenewal or refusal to write policy of automobile insurance applicable to this part 6 10‑4‑627
Discriminatory standards - premiums - surcharges - proof of financial responsibility requirements 10‑4‑628
Refusal to write - changes in - cancellation - nonrenewal of policies prohibited 10‑4‑629
Cancellation - renewal - reclassification 10‑4‑630
Exclusion of named driver 10‑4‑632
Reduction in rates for drivers aged fifty-five years or older who complete driver’s education course - legislative declaration 10‑4‑633
Certification of policy and notice forms 10‑4‑633.5
Automobile insurance policies - plain language required - rules 10‑4‑634
Assignment of payment for covered benefits 10‑4‑635
Medical payments coverage - exceptions - definitions 10‑4‑636
Disclosure requirements for automobile insurance products offered - rules 10‑4‑637
No discrimination by profession 10‑4‑638
Retroactive adjustment of health-care service claims 10‑4‑639
Claims practices for property damage 10‑4‑640
Operator’s policy of insurance 10‑4‑641
Rules - medical payments coverage 10‑4‑642
Prompt payment of direct benefits - legislative declaration - definitions 10‑4‑643
Electronic claim forms - rules 10‑4‑1001
Short title 10‑4‑1002
Definitions 10‑4‑1003
Disclosure of information 10‑4‑1004
Evidence - confidential 10‑4‑1005
Immunity 10‑4‑1006
Enforcement 10‑4‑1007
Penalty 10‑4‑1008
Municipal ordinances - concurrent jurisdiction - common law 10‑4‑1009
Continuing duties of insurers - unfair claim settlement practices 10‑4‑1201
Definitions 10‑4‑1202
Minimum standards 10‑4‑1203
Disclosure 10‑4‑1204
Penalties 10‑4‑1205
Applicability 10‑4‑1206
Effective date 10‑4‑1301
Legislative declaration 10‑4‑1302
Definitions 10‑4‑1303
Temporary joint underwriting association 10‑4‑1304
Board of directors - authority 10‑4‑1305
Plan of operation - annual certification 10‑4‑1306
Deficits - assessment - rebate of surplus 10‑4‑1307
Annual statements 10‑4‑1308
Examinations 10‑4‑1309
Legislative declaration - authority of commissioner - emergency rules - judicial review 10‑4‑1310
Privileged communications 10‑4‑1311
Tax exemption 10‑4‑1401
Legislative declaration 10‑4‑1402
Rules 10‑4‑1403
Exemption from rate filing, approval, and form certification requirements 10‑4‑1404
Multistate insurance risks - choice of law 10‑4‑1501
Definitions 10‑4‑1502
Licensure of vendors 10‑4‑1503
Requirements for sale of portable electronics insurance 10‑4‑1504
Authority of vendors of portable electronics 10‑4‑1505
Suspension or revocation of license 10‑4‑1506
Termination of portable electronics insurance 10‑4‑1507
Application for license - fees 10‑4‑1601
Definitions 10‑4‑1602
Exemptions 10‑4‑1603
Requirements for sale of consumer goods service contracts - definitions 10‑4‑1604
Obligations of reimbursement insurance companies 10‑4‑1605
Required disclosures - reimbursement insurance policy 10‑4‑1606
Required disclosures - service contracts 10‑4‑1607
Prohibited acts 10‑4‑1608
Required record keeping 10‑4‑1609
Enforcement provisions - rules 10‑4‑1701
Definitions 10‑4‑1702
Authority to issue license 10‑4‑1703
License - application - restrictions 10‑4‑1704
Disclosures to occupant 10‑4‑1705
Supervision of issuance - training 10‑4‑1706
Compensation 10‑4‑1707
Exemption from requirements 10‑4‑1708
Notification 10‑4‑1709
Enforcement 10‑4‑1801
Short title 10‑4‑1802
Legislative declaration 10‑4‑1803
Definitions 10‑4‑1804
Fair access to insurance requirements plan association - creation - participation required 10‑4‑1805
Fair access to insurance requirements plan association - board of directors - membership - duties 10‑4‑1806
FAIR plan - plan requirements - insurer requirements 10‑4‑1807
Plan of operation - mandatory components - amendments - revocation by commissioner - rules 10‑4‑1808
FAIR plans - requirements for licensed producers 10‑4‑1809
Assessment of fees 10‑4‑1810
Enforcement - suspension or revocation of certificate of authority - fines 10‑4‑1811
Appeals - judicial review 10‑4‑1812
Rules
Green check means up to date. Up to date

Current through Fall 2024

§ 10-4-116’s source at colorado​.gov