- Colorado maintains a list of eligible surplus lines insurers. (See Other Comments Section #3.)
- Colorado does have a Surplus Lines Association (see Other Comments section #4).
- Colorado does not maintain an Export List (see Other Comments section #5).
- Colorado does have an industrial insured exemption (see Appendix C) which will remain in effect and also recognizes the exempt commercial purchaser exemption under NRRA although it is not yet codified.
- Surplus lines tax: 3%.
- Colorado has not adopted legislation authorizing the state to participate in any tax sharing agreement.
Eligibility and Filing Requirements (All Insurers):
Application and fees as set forth below are voluntary if company wishes to be included on eligibility list:
- Filing Fee: non-refundable filing fee of $1,205 ($4,175 if company’s Colorado premium is between $1,000,001 and $10 million; $5,510 if company’s Colorado premium exceeds $10 million).
- Other items determined to be necessary by the Commissioner as warranted by any special circumstances.
- Gross premium report: by March 1 (must be submitted electronically on excel spreadsheet).
- Except for gross premium report, all requalification filings must be mailed to Colorado DOI via postal service or overnight mail. Electronic filings will not be accepted.
Eligibility and Filing Requirements (Alien Insurers Only):
- No filings required if company is on IID List.
- Filing fee required if company wishes to be included on Colorado’s eligibility list.
Eligibility and Filing Requirements (Foreign Insurers Only):
- Capital and Surplus: $15,000,000.
- Licensed in home state (remaining requirements necessary only if company wishes to be included on eligibility list).
- A certified copy of the most recent Report of Examination and company’s response.
- Certificate of Deposit evidencing a minimum $2,500,000 market value.
- Certificate of Authority/Compliance which must specify authorized lines in the state of domicile or port of entry.
- Auditors Report.
- Unless a foreign insurer files their annual statement electronically with the NAIC, a hard copy of that document is also required.
- In the case of an insurance exchange, provide evidence that the exchange meets the requirements of section 10-15-108(1)(b)(11), C.R.S.
Types of Insurance Exempted from Surplus Lines Regulation:
- Insurance on vessels or crafts or their hulls or cargoes or on marine builders’ risks or marine protection and indemnity or other risks, including strikes and war risks commonly insured under ocean or wet marine forms of policy.
- Insurance on subjects located, resident, or to be performed wholly outside Colorado or on vehicles or aircraft owned and principally garaged outside Colorado.
- Insurance on the operations of railroads engaged in transportation in interstate commerce and their property used in such operations.
- Insurance on aircraft owned or operated by manufacturers of aircraft or on aircraft operated in commercial scheduled interstate flight or the cargo of such aircraft or against liability, other than workers’ compensation and employers’ liability, arising out of the ownership, maintenance, or use of such aircraft.
- Insurance on satellites or other devices intended for launch beyond the earth’s atmosphere.
Other Comments or Requirements:
- Brokers placing exempted coverages above are required to keep a full and true record, for not less than three years, of each such coverage in the same detail as required for surplus lines insurance. The record must be kept available in the State for examination by the Commissioner of Insurance.
- Commissioner may approve insurance pools, underwriting associations or other programs on a non-admitted basis.
- “Approved” list may be obtained from the Dept’s website: http://cdn.colorado.gov/cs/Satellite?c=Page&childpagename=DORA-DI/DORALayout&cid=1251623445671&pagename=CBONWrapper.
- The Surplus Lines Association of Colorado is no longer gathering tax data on behalf of the DOI but otherwise continues to be active on a local and national level. Contact information is as follows:
Surplus Lines Association of Colorado
3570 E. 12th Avenue
Denver, Colorado 80206
Tel.: (303) 331-9399
Fax.: (303) 331-9006
The Association also maintains a website at www.colosla.org.
- Although Colorado does not have an export list, there is a provision in the statute that relieves the due diligence requirement with respect to placements made on behalf of “exempt commercial policyholders” as defined in Section 10-4-1402 of the Colorado Insurance Laws.
- All surplus lines insurance contracts must include the following:
“This contract is delivered as surplus line insurance under the Nonadmitted Insurance Act. The insurer issuing this contract is not admitted in Colorado but is an approved nonadmitted insurer. There is no protection under the provisions of the Colorado Insurance Guaranty Association Act.”
If the policy is written on a claims-made basis, the following must also appear on the policy:
“This policy is a claims-made policy which provides liability coverage only if a claim is made during the policy Period or any applicable extended reporting Period.”
If an automobile policy does not provide the basic complying policy coverages in section 10-4-620, C.R.S. the following must appear on the policy:
“This policy does not meet the statutory requirements of this State’s financial responsibility laws. It does not provide liability coverage for bodily injury and property damage.”
The provisions of section 10-5-101.5 (1)(b), C.R.S. shall apply to policies of property and casualty insurance issued or delivered in this state by an unauthorized insurer affording coverage only on property located temporarily or permanently, or operations conducted temporarily or permanently outside the boundaries of the United States of America, its territories or possessions when the policy is placed by licensed property and casualty producers or brokers of this state, who shall remain responsible for verifying that the insuring company is licensed or authorized by the appropriate regulatory bodies to transact the business of insurance in that jurisdiction, and contains the following disclaimer:
“This policy is issued by an insurance company that is not regulated by the Colorado Division of Insurance. The insurance company may not provide claims service and may not be subject to service of process in Colorado. If the insurance company becomes insolvent, insureds or claimants will not be eligible for protection under Colorado insurance law.”
These required disclosures must be affixed to the declaration page of the contract given to the insured. A copy, bearing the disclosures, must also be maintained by the broker. In the case of the issuance of a binder prior to the formal policy, such disclosure must also appear on the binder.
- The Surplus Lines Association of Colorado issued a Bulletin in 2014 to clarify home state rules in Colorado. The Bulletin clarifies that if an insured is headquartered in Colorado but has locations in other states, 100% of the tax is payable to Colorado.