§ 10-3-401 — Legislative declaration

Colorado § 10-3-401

• Jurisdiction: Colorado
• Title 10: Insurance
• Art.: Regulation of Insurance Companies

Text

(1) The purpose of this part 4 is to make
available to the commissioner supplemental remedial authority in instances of
insurance company delinquencies of various kinds and degrees which demand
regulation and control by the commissioner in order to effectuate his responsibility
that the business of insurance in this state is conducted according to law and his
responsibility to protect the policyholders and public of this state. Most
delinquencies are of such a kind or degree as to not justify the imposing of the
remedy or sanction of loss of certificate or of rehabilitation or liquidation by court
order. Either of the remedies of loss of certificate or of rehabilitation or liquidation
by court order would in many instances defeat any realistic opportunity to
rehabilitate the delinquent company. Such remedies are likely to destroy or
diminish one or more of the following values or assets: The value of the insurance
account or in-force business of the insurer; the value of the insurer as a going
concern; the value of its agency force; and the value of other of its assets.

(2) The remedial steps provided by this part 4 are provided with the purpose
in mind that insurance companies committing or suffering a delinquency be
rehabilitated where and whenever possible with no loss of public confidence in the
companies, and thus avoid the loss of a certificate of or the institution of
rehabilitation or liquidation proceedings, by court order, against any insurance
company, where possible. Furthermore, the remedial steps provided in this part 4
are provided to protect the assets of an insurer pending determination of whether
or not the insurer can be successfully rehabilitated. In instances where
rehabilitation or liquidation by court order are inevitable, it is nevertheless the
purpose of this part 4 to allow preliminary or emergency supervision to prevent a
dissipation of assets from taking place, and thus benefit the policyholders of the
company. In such an instance, this part 4 shall operate in conjunction with part 5 of
this article.

Legislative History

Source: L. 69: p. 544, � 3. C.R.S. 1963: � 72-29-1. L. 92: Entire section amended, p. 1424, � 5, effective July 1.