§ 10-4-513 — Prevention of insolvencies

Colorado § 10-4-513

• Jurisdiction: Colorado
• Title 10: Insurance
• Art.: Property and Casualty Insurance

Text

(1) To aid in the detection and
prevention of insurer insolvencies, it is the duty of the board of directors, upon
majority vote, to notify the commissioner of any information indicating that any
member insurer may be insolvent or is in a financial condition hazardous to the
policyholders or the public.

(2) To aid in the detection and prevention of insurer insolvencies, it is the
duty of the commissioner:

(a) To notify the commissioners of all other states and territories of the
United States and the District of Columbia by mail within thirty days of any of the
following actions taken by him against a member insurer:

(I) Revocation of license;

(II) Suspension of license;

(III) Any formal order that such company restrict its premium writing, obtain
additional contributions to surplus, withdraw from the state, reinsure all or any part
of its business, or increase capital, surplus, or any other account for the security of
policyholders or creditors;

(b) To report to the board of directors when he has taken any of the actions
set forth in paragraph (a) of this subsection (2) or has received a report from any
other commissioner indicating that any such action has been taken in another state.
Such report to the board of directors shall contain all significant details of the
action taken or the report received from another commissioner.

(c) To report to the board of directors when he has reasonable cause to
believe from any examination, whether completed or in process, of any member
company that such company may be insolvent or in a financial condition hazardous
to the policyholders or the public;

(d) To furnish to the board of directors the early warning tests developed by
the national association of insurance commissioners. The board of directors may
use the information contained in such tests in carrying out its duties and
responsibilities pursuant to this section. Such report and the information contained
therein shall be kept confidential by the board of directors until such time as made
public by the commissioner of another lawful authority.

(3) The commissioner may seek the advice and recommendations of the
board of directors concerning any matter affecting his duties and responsibilities
regarding the financial condition of member companies and companies seeking
admission to transact insurance business in this state.

(4) The board of directors, upon majority vote, may make reports and
recommendations to the commissioner upon any matter germane to the solvency,
liquidation, rehabilitation, or conservation of any member insurer or germane to the
solvency of any company seeking to do business in this state. Such reports and
recommendations shall not be considered public documents.

(5) It is the duty of the board of directors, upon majority vote, to notify the
commissioner of any information indicating that any member insurer may be
insolvent or in a financial condition hazardous to the policyholders or the public.

(6) The board of directors, upon majority vote, may request that the
commissioner order an examination of any member insurer which the board in good
faith believes to be in a financial condition hazardous to the policyholders or the
public. Within thirty days of the receipt of such request, the commissioner shall
begin such examination. The examination may be conducted as a national
association of insurance commissioners examination or may be conducted by such
persons as the commissioner designates. The cost of such examination shall be
paid by the association, and the examination report shall be treated as are other
examination reports. In no event shall such examination report be released to the
board of directors prior to its release to the public, but this shall not preclude the
commissioner from complying with subsection (1) of this section. The commissioner
shall notify the board of directors when the examination is completed. The request
for an examination shall be kept on file by the commissioner, but it shall not be
open to public inspection prior to the release of the examination report to the
public.

(7) The board of directors, upon majority vote, may make recommendations
to the commissioner for the detection and prevention of insurer insolvencies.

(8) The board of directors, at the conclusion of any insurer insolvency in
which the association was obligated to pay covered claims, shall prepare a report to
the commissioner containing such information as it may have in its possession
bearing on the history and causes of such insolvency. The board of directors shall
cooperate with the boards of directors of guaranty associations in other states in
preparing a report on the history and causes for insolvency of a particular insurer
and may adopt by reference any report prepared by such other associations.

Legislative History

Source: L. 71: p. 762, � 1. C.R.S. 1963: � 72-34-13. L. 77: Entire section R&RE, p. 514, � 5, effective May 27.