§ 10-3-1004 — Defense of action by unauthorized insurer

(1) Before any
unauthorized foreign or alien insurer files or causes to be filed any pleading in any
action, suit, or proceeding instituted against it, the unauthorized insurer shall either
deposit cash or securities with the clerk of the court in which such action, suit, or
proceeding is pending or file with the clerk a bond with good and sufficient sureties,
to be approved by the court, in an amount to be fixed by the court sufficient to
secure the payment of any final judgment that may be rendered in such action, or
procure a certificate of authority to transact the business of insurance in this state,
unless one or more of the following is applicable:

(a) The insurer makes a showing satisfactory to the court and the
commissioner that there are, in this state or in another state, cash, securities, bond,
or other assets sufficient and available to secure the payment of any final judgment
which may be rendered in the action, suit, or proceeding or that the insurance was
placed lawfully in the jurisdiction in which the transaction took place and which was
not an unlawful placement under the laws of this state;

(b) At the time the insurer files any pleading in any action, suit, or proceeding
instituted against it, the insurer is listed on the eligible nonadmitted insurers list
prepared by the commissioner pursuant to subsection (1) of section 10-5-108;

(c) With respect to a contract of reinsurance, the reinsurer has complied with
the provisions of this title necessary to permit the ceding insurer to take credit on
its financial statement for the reinsurance pursuant to part 7 of this article.

(1.5) If an insurer or reinsurer asserts an exemption under paragraph (a), (b),
or (c) of subsection (1) of this section, such insurer or reinsurer shall notify the court
of the basis on which the exemption is sought and shall file a copy of the assertion
with the commissioner of insurance.

(2) The court, in any action, suit, or proceeding in which service is made in the
manner provided in section 10-3-1003 (2) or (3), may, in its discretion, order such
postponement as may be necessary to afford the defendant reasonable opportunity
to comply with the provisions of subsection (1) of this section and to defend such
action.

(3) Nothing in subsection (1) of this section is to be construed to prevent an
unauthorized foreign or alien insurer from filing a motion to quash a writ or to set
aside service thereof made in the manner provided in section 10-3-1003 (2) or (3) on
the ground either that such unauthorized insurer has not done any of the acts
enumerated in section 10-3-1003 (1) or that the person on whom service was made
pursuant to section 10-3-1003 (3) was not doing any of the acts therein enumerated.

Legislative History

Source: L. 55: p. 477, � 3. CRS 53: � 72-19-3. C.R.S. 1963: � 72-18-3. L. 97: (1) amended and (1.5) added, p. 531, � 5, effective April 24. L. 2012: (1)(b) amended, (HB 12-1215), ch. 104, p. 355, � 8, effective August 8. L. 2014: IP(1) and (1)(c) amended, (HB 14-1315), ch. 295, p. 1217, � 5, effective January 1, 2015.