(1) No insurer shall use or issue any
policy, certificate, or contract of insurance or any portion thereof which provides
coverage on a claims-made basis unless it has been certified by the insurer and the
insurer has filed a certification with the commissioner that such policy endorsement
or disclosure form or any portion thereof which provides coverage on a claims-made
basis conforms to Colorado law pursuant to subsection (2) of this section and any
rules and regulations promulgated pursuant to subsection (3) of this section.
(2) A claims-made policy shall not be delivered or issued for delivery to any
person in this state unless:
(a) The insurer defines the nature of the risks or exposures to be insured on
the claims-made policy;
(b) (I) The policy contains clear and adequate disclosure and alerts the
insured to the fact that the policy is a claims-made policy and explains the unique
features distinguishing it from an occurrence policy and relating to renewal,
extended reporting periods, and coverage of occurrences with long periods of
exposure. The commissioner shall promulgate regulations which establish proof of
delivery and acceptance thereof by the policyholder and set forth the contents and
format of the minimum disclosures required under this article.
(II) Such disclosures shall include:
(A) A description of the principal benefits and coverage provided in the
policy;
(B) A statement of the exceptions, reductions, and limitations contained in
the policy;
(C) A statement of the renewal provisions including any reservation by the
insurer of a right to change premiums;
(D) A statement that the outline of coverage is a summary of the policy
issued or applied for and that the policy should be consulted to determine
governing contractual provisions.
(c) The policy clearly defines the events and conditions which trigger
coverage and defines when and how a claim is deemed to be made or is deemed
made;
(d) The policy offers, at the insured's option, the purchase of an extended
reporting period of at least one year for claims not filed during the policy period.
The premium may not exceed two hundred percent of the expiring policy premium
unless the adjusted premium is determined by the commissioner to be inadequate
based upon section 10-4-403 and based upon an opinion of a qualified actuary
submitted on behalf of the insurer.
(e) The policy requires insurers to furnish policyholders, upon their request
and within thirty days thereafter, sufficient information about closed or paid claims,
claims for which the company has established reserves, and claims for which the
company has received notices of occurrences which could give rise to claims to
allow the insured to determine how much of his aggregate coverage remains
available under the policy;
(f) The insured approves and acknowledges, by signature on the written
endorsement, any exclusionary endorsement which excludes coverage in a renewal
period for claims from certain known occurrences, events, products, or locations;
(g) All persons engaged in the sale, consultation, or adjustment of the
claims-made policy have been trained and certified pursuant to the standards and
procedures set forth in regulations promulgated by the commissioner.
(3) (a) The commissioner may prohibit the use of a claims-made liability
policy if the policy does not contain one or more of the following policy provisions:
(I) (Deleted by amendment, L. 2000, p. 466, � 5, effective August 2, 2000.)
(II) A policy provision that, in the event of cancellation or nonrenewal for any
reason, the policy guarantees the insured the right of a sixty-day period to
purchase coverage for an extended reporting period as provided in subparagraph
(III) of this paragraph (a); or
(III) A policy provision that, at the insured's option, the insured may purchase
coverage for an extended reporting period of at least the length of time of
exposure under the applicable statute of limitation.
(IV) (Deleted by amendment, L. 2000, p. 466, � 5, effective August 2, 2000.)
(b) (Deleted by amendment, L. 2000, p. 466, � 5, effective August 2, 2000.)
(4) If a standardized claims-made policy form, proposed by a rating or
advisory organization, has been filed with the commissioner and certified by the
rating or advisory organization to be in compliance with statutory mandates, an
insurer may utilize such a form.
(5) As used in this section, unless the context otherwise requires, claims-made policy means a policy of liability insurance that provides coverage for those
claims that are made or reported to the insurance carrier, as is required in the
policy, during the term of the policy or for such extended reporting term for which
coverage has been purchased. A claims-made policy may include coverage for
events occurring before the current policy term.
(6) This section shall not apply to any public entity self-insurance pool
formed pursuant to section 24-10-115.5, C.R.S., or to any policy, certificate, or
contract of insurance offered or issued by an insurer to such a pool.
(6.5) This section shall not 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.
(7) All insurers providing insurance on a claims-made basis and who are
authorized by the commissioner to conduct business in Colorado shall submit an
annual report to the commissioner listing any policy form, endorsement, disclosure
form, or any other evidence of coverage issued or delivered to any policyholder in
Colorado. Such listing shall be submitted by July 15, 1993, and not later than July 1
of each subsequent year and shall contain a certification by an officer of the
organization that each policy form, endorsement, or disclosure form in use complies
with Colorado law. The necessary elements of the certification shall be determined
by the commissioner.
(8) All insurers providing insurance on a claims-made basis and who are
authorized by the commissioner to conduct business in Colorado shall also submit
to the commissioner a list of any new policy form, endorsement, or disclosure form
at least thirty-one days before using such policy form, endorsement, or disclosure
form. Such listing shall also contain a certification by an officer of the organization
that each new policy form, endorsement, or disclosure form proposed to be used
complies with Colorado law. The necessary elements of the certification shall be
determined by the commissioner.
(9) The commissioner shall have the power to examine and investigate
insurers authorized to conduct business in Colorado to determine whether claims-made policy forms, endorsements, or disclosure forms comply with the certification
of the insurer and statutory mandates.