CO| Colorado‘s new Regulation 5-4-1, which establishes the process for member insurers to recoup startup fees paid to the Colorado FAIR Plan Association through surcharges on property and commercial property insurance policies. The regulation ensures transparency, fairness, and oversight in the recoupment process, requiring clear disclosure to policyholders and regulatory approval of surcharge filings. It also sets limits on excess collections and provides enforcement mechanisms for noncompliance.
Key Points:
- Member insurers may recover FAIR Plan startup fees from policyholders via a premium surcharge applied fairly over two years, with clear disclosure on policy documents.
- Insurers must file proposed surcharges with the Commissioner at least 90 days in advance and maintain detailed records, with excess collections over 1% refunded to policyholders or retained for future assessments.
- Noncompliance may result in civil penalties, cease and desist orders, or license suspension/revocation, with the regulation effective July 15, 2025.