Colorado's insurance law lives in Title 10 of the Colorado Revised Statutes (C.R.S.) and in the Division of Insurance regulations in 3 CCR 702. The state portion of every Colorado exam is a sizable share of the test (roughly a quarter to well over a third of the scored items), so the deadlines, dollar amounts and named rules below are worth memorizing. The shared national guide covers general concepts such as contract law and agency; this page sticks to what is specific to Colorado.

About the exam

Colorado's licensing exams are delivered by Pearson VUE. Pass marks are scaled, and the vendor does not publish a fixed percentage.

Colorado does not offer a combined Life & Health exam or a combined Property & Casualty exam. Candidates for both halves take the two separate exams. A passing score is valid for one year, and the license application must be received within a year of passing.

The regulator

• The Division of Insurance is part of the Department of Regulatory Agencies (DORA). It is headed by the Commissioner of Insurance, appointed by and serving at the pleasure of the governor, with senate confirmation (C.R.S. 10-1-104(1)).
• The commissioner must be well versed in insurance, a Colorado elector, and have no financial interest in any insurer or agency except as a policyholder.
• The commissioner adopts rules (10-1-109) and must conduct a formal financial examination of every licensed insurer at least once every five years (10-1-203(1)). Testifying falsely in an examination is a class 2 misdemeanor (10-1-204(4)).
• Insurers and producers must answer Division inquiries completely within 20 calendar days, or 10 days for examination request forms (Reg. 1-1-8). Penalty: $500 for a first violation, up to $5,000 for each later one.
• An insurer needs a certificate of authority, which expires June 30 each year (10-3-105). Annual statements are due by March 1 (10-3-208).

Producer licensing

• Who is a producer: anyone who solicits, negotiates, effects, procures, delivers, renews, continues or binds insurance on Colorado risks (10-2-103(6)). A producer who solicits an application represents the insurer, not the insured (10-2-401(1)). Salaried clerical staff who incidentally take applications without commission, and underwriting, loss-control and claims employees, are not producers (10-2-105).
• Requirements: at least 18, prelicensing education, and a passed exam for each line (10-2-404(1)). Prelicensing is 50 hours per major line, including 3 hours of ethics (taken only once if you apply for more than one line). The course must also include 3 hours of general Colorado law and 4 hours of line-specific Colorado law (Reg. 1-2-5). A prelicensing certificate is good for one year.
• Designations (CPCU, CIC, ARM, AAI for P&C; CLU, ChFC for life; RHU for health) exempt you from prelicensing only, not the exam. A producer who held a resident license in another state within the past 90 days is exempt from the exam for those lines.
• Lines of authority (10-2-407): Life, Accident & Health, Property, Casualty, Personal Lines (P&C sold to individuals and families for noncommercial purposes), and Variable Life and Variable Annuity, which requires an active Life license plus FINRA registration.
• Business entities must designate a licensed producer who is an officer, partner or director responsible for compliance (10-2-404(2)(d)).
• Assumed names must be registered with the commissioner before use (10-2-701).

Keeping the license

• Continuation: every two years, on the last day of the birth month. Colorado has no grace period: requirements must be in by 10:00 p.m. Mountain Time on the expiration date. A lapsed license can be reinstated by new application within one year. After that, the producer must retake prelicensing (if required) and the exam (Reg. 1-2-10).
• Continuing education: 24 hours per cycle, including 3 hours of ethics (10-2-301(1)). Producers with Property or Personal Lines authority must include 3 hours on homeowners coverage. At least 18 hours must fit the license type. New licensees are exempt during their first cycle. Up to 12 carry-over hours may be earned in the 120 days before the continuation date. The commissioner may grant a one-year extension for good cause. A course can't be repeated for credit within two years, except statutory updates. Failing to complete CE suspends the license.
• Address changes: report within 30 days (10-2-412). A producer moving out of state files the change and home-state certification within 30 days (10-2-502(3.5)).
• Reporting actions (10-2-801(3), (4)): report an administrative action in another jurisdiction within 30 days of final disposition. Report a criminal prosecution within 30 days of the initial pretrial hearing.
• Temporary license: up to 180 days, no exam, issued to service a business: for example to the surviving spouse, next of kin, executor or employee of a deceased or disabled producer, or the designee of a producer entering military service. The commissioner may require a sponsor (10-2-410).
• Nonresidents in good standing in their home state are licensed for the same lines and get the same rights as residents (10-2-502).

Appointments and terminations

• Colorado does not file producer appointments with the Division, except for bail producers (the old filing statute, 10-2-415, is repealed). Each insurer keeps a current list of the producers authorized to take applications for it, available to the commissioner on request (10-2-416.5).
• Termination for cause: the insurer notifies the commissioner within 30 days of the effective date. Within 15 days after that, it mails a copy to the producer (certified mail or overnight). The producer then has 30 days to file written comments (10-2-416).
• Commissions may be paid only to someone licensed when the work was done. Renewal and deferred commissions to those entitled to them remain allowed (10-2-702).

Premiums held in trust

• Premiums are held in a fiduciary capacity (10-2-704). Remit them by the contractual due date or, if there is none, within 45 days of receipt. Returned premiums go to the person entitled within 30 days.
• No commingling with personal funds. Bank deposits go in a separate insurance trust account, and trust funds may not be pledged as loan collateral (Reg. 1-2-1).
• Insurers refund unearned premium within 45 days after cancellation (10-2-704(2)). An insurer must report a producer who has not accounted for premium 45 days after the due date, or 90 days after receipt if there is no due date.
• Producer fees: no separate fee for routine work such as quoting, certificates, endorsements or SR-22 filings. Fees for services beyond placing a policy require a disclosure signed in advance (Reg. 1-2-9). For health plans, a producer may charge an advice fee only if taking no commission and disclosing it in writing (10-16-133(5)).
• Controlled business: a license may not be granted or kept if, in any 12 months, premiums on the producer's own, spouse's, employer's or own-business risks exceed premiums on all other business (10-2-401(4), (5)).

Unfair trade practices (C.R.S. 10-3-1104)

• Misrepresentation of policy terms, benefits or dividends, or calling a policy a security.
• Twisting: misrepresentation to induce lapse, forfeiture, exchange, conversion or surrender. Churning: the same, using values or dividends from a policy of the same insurer.
• Defamation of an insurer's financial condition. Under 10-1-116 it is also a petty offense for the agent who does it.
• Boycott, coercion and intimidation. A lender may not require a particular insurer or agent, may not charge a fee to substitute policies, and may not require hazard coverage above the replacement value of the improvements (10-3-1105, 10-4-114).
• Rebating: any inducement not specified in the contract. Retroactive group experience adjustments are exempt.
• Unfair discrimination. Examples: asking about sexual orientation, refusing a home solely for its age, or refusing someone solely because another insurer declined them.
• Polygraph demands on an insured or claimant. Claims-staff pay based on denials or quotas.
• Unfair claims practices: failing to acknowledge communications, to investigate reasonably, to affirm or deny within a reasonable time, or to settle promptly once liability is reasonably clear.
• Penalties (10-3-1108): up to $3,000 per violation, $30,000 aggregate. If the insurer knew or should have known, up to $30,000 per violation, $750,000 a year. Violating a cease-and-desist order costs up to $10,000 per violation for an insurer or $500 for an individual (10-3-1109). Producer civil penalty: up to $3,000 per violation (10-2-804(4)). After revocation, or surrender to avoid discipline, a producer must wait two years to reapply.

Fraud

• A fraudulent insurance act is knowingly presenting false material information in support of an application or claim, or concealing material facts (10-1-128(1)). Applications and claim forms carry a prescribed fraud warning.
• Insurers must keep an anti-fraud plan. They report suspected fraud within 60 days after the investigation establishes reasonable suspicion, and must also notify the Division when a producer or insurer is involved (Reg. 6-5-1). A fraud allegation does not excuse prompt investigation of the claim.
• A producer convicted of criminal insurance fraud (18-5-211) must have the license revoked. The attorney general shares jurisdiction with district attorneys to prosecute.
• Arson reporting: insurers must report a suspicious fire loss to an authorized agency. Reporters are immune unless they knew the information was false or acted with reckless disregard (10-4-1003, 10-4-1005).

Property and casualty policy rules

• Commercial policies: cancellation needs 45 days' notice, or 10 days for nonpayment (10-4-109.7). Midterm cancellation is allowed only for nonpayment, a knowingly false application statement, or a substantial change in exposure. Nonrenewal needs 45 days' notice. An insurer that fails to send it is treated as willing to renew (10-4-110). If renewal terms arrive less than 45 days before expiration, the old policy extends 45 days at a prorated premium (10-4-110.5).
• Midterm changes: no rate increase or coverage cut during a prepaid term unless the insured changed the risk or misrepresented it. Policies in their first 60 days may still be canceled for permitted reasons (10-4-416).
• Credit information (10-4-116): credit can't be the sole reason to deny, cancel or nonrenew. Scores can't use income, gender, address or zip code, ethnic group, religion, marital status or nationality. Adverse-action notices give up to four specific reasons. The report must be no more than 90 days old, and scores are refreshed at least every 36 months. At renewal, the insurer must rerate on request. The insurer must indemnify a producer who follows its credit procedures.
• Summary disclosure forms are required for dwelling fire, homeowners and auto: at purchase, at renewal when coverage changes, and annually for homeowners. If the form and the policy conflict, the policy controls (10-4-111).
• P&C claims (Reg. 5-1-14): decide or pay within 60 days of a valid, complete claim. Late payment draws 8% interest, and a $100-a-day penalty may apply.
• Exempt commercial policyholders (large, sophisticated buyers) may be written without rate and form filing. Their policies carry a 10-point bold disclaimer (10-4-1401 to 1404).

Rates, surplus lines and the guaranty funds

• Rates may not be excessive, inadequate or unfairly discriminatory (10-4-403). Type I (prior approval) covers workers' comp pure premiums and assigned-risk auto. Type II is open competition. Rating law excludes life, annuities and A&H.
• Surplus lines: placed through a licensed surplus lines broker when coverage isn't available from admitted insurers. Due diligence is shown by declinations from three admitted insurers. The broker files an affidavit within 30 days, and the policy discloses that there is no guaranty association protection (10-5-103, Reg. 2-4-1).
• Colorado Insurance Guaranty Association (P&C): pays covered claims under $300,000, and workers' comp in full (10-4-508).
• Life and Health Insurance Protection Association (10-20-104): $300,000 death benefit, $100,000 cash value, $250,000 annuity value, $500,000 health benefit plans, $300,000 disability and LTC. Producers may not use the association to sell (10-20-119).
• Records: current year plus two prior calendar years (Reg. 1-1-7).

Exam traps

• Colorado has no appointment filing for most producers. Don't pick an answer about the insurer filing an appointment with the Division.
• No grace period for license continuation, and the first-cycle CE exemption.
• 30 days for nearly every reporting deadline (address, administrative action, criminal prosecution, for-cause termination). 45 days for remitting premium and refunding unearned premium.
• The surplus-lines test is three admitted declinations. The P&C guaranty cap is "less than $300,000".