Insurers writing commercial or personal automobile policies in Colorado should be aware of new disclosure requirements effective January 1, 2020. The Colorado legislature enacted a new statute, C.R.S. § 10-3-1117, with the goal of increasing transparency in the claims process, and insurers need to be aware of the repercussions of failure to comply with this new law.
The statute imposes disclosure requirements related to both first-party and third-party requests. Accordingly, if requested in writing by their first-party insured, an insurer who issued a commercial or personal automobile policy must provide a complete copy of the policy to the insured, including any endorsements, within 30 days of the request. Other than the requirement that the request be in writing, the statute contains no specific constraints on the manner of the request, or the manner of the response.
However, the process for third-party requests (requests from claimants, opposing counsel, etc.) is more elaborate. If requested in writing by a third-party claimant or their attorney, an insurer who provides or may provide commercial or personal automobile liability insurance must furnish a statement including:
- The name of the insurer;
- The name of each insured party, as it appears on the declarations;
- The limits of the liability coverage; and
- A copy of the policy.
Notably, requests must be sent to the insurer’s registered agent, and the statute specifies that this information must be provided by mail, facsimile, or electronic delivery. Like a first-party request, the requested information must be provided within 30 days.
Unlike other states with similar insurance disclosure statutes, Colorado’s new law has real teeth with real consequences! Of particular note is the fact that the new law imposes penalties of $100.00 per day on an insurer that fails to disclose, accruing on the 31st day following receipt of a written request. Insurers are also liable for attorney’s fees and costs incurred in enforcing the statute. An insurer cannot afford to ignore these statutory requests or doing so will bite them in their checkbook!
The language and procedures set out in the statute necessarily invite questions that may arise under any number of circumstances, including how to comply with the statute while avoiding entrapment by claimant’s counsel resulting in penalties for technical mistakes. The experienced team of attorneys at Wood, Smith, Henning & Berman LLP are available to assist insurers with navigating the complexities of these new disclosure requirements.