Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
REVISED
This Version Includes All Amendments Adopted
on Second Reading in the Second House
LLS NO. 24-0711.01 Kristen Forrestal x4217
HOUSE BILL 24-1321
House Committees Senate Committees
Business Affairs & Labor Business, Labor, & Technology
A BILL FOR AN ACT
C
ONCERNING ALIGNING THE COLORADO STATUTES WITH THE101
N
ATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS'102
FINANCIAL MODEL LAWS .103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill updates Colorado state laws concerning insurance
company holding systems to align with the National Association of
Insurance Commissioners' model act. The changes include updating:
! The registration requirements for the ultimate controlling
person of each insurer by adding new filing requirements
SENATE
2nd Reading Unamended
April 26, 2024
HOUSE
3rd Reading Unamended
March 11, 2024
HOUSE
Amended 2nd Reading
March 8, 2024
HOUSE SPONSORSHIP
Brown and Taggart, Amabile, Bird, Clifford, Jodeh, Marshall, McCluskie, Ortiz, Titone,
Velasco
SENATE SPONSORSHIP
Roberts and Hinrichsen,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. to be included with the division of insurance's (division)
existing registration requirements;
! The standards for insurance holding company transactions
subject to registration with the division;
! Language concerning the confidential treatment of
documents to include proprietary and trade secret
documents and materials; and
! The regulatory tools that the division may use for the
regulation of insurance holding companies.
The bill also makes technical amendments.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 10-3-801,
add (4.3),2
(7.5), and (8.5) as follows:3
10-3-801. Definitions. As used in this part 8, unless the context4
otherwise requires:5
6
(4.3) "G
ROUP CAPITAL CALCULATION INSTRUCTIONS " MEANS THE7
GROUP CAPITAL CALCULATION INSTRUCTIONS ADOPTED AND AMENDED BY8
THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS.9 10
(7.5) "NAIC
LIQUIDITY STRESS TEST FRAMEWORK " OR11
"
FRAMEWORK" MEANS THE NAIC PUBLICATION THAT INCLUDES A HISTORY12
OF THE NAIC'S DEVELOPMENT OF REGULATORY LIQUIDITY STRESS13
TESTING, THE SCOPE CRITERIA APPLICABLE FOR A SPECIFIC DATA YEAR ,14
AND THE LIQUIDITY STRESS TEST INSTRUCTIONS AND REPORTING15
TEMPLATES FOR A SPECIFIC DATA YEAR, AS ADOPTED BY THE NAIC, AND16
AS AMENDED FROM TIME TO TIME BY THE NAIC, IN ACCORDANCE WITH17
THE PROCEDURES ADOPTED BY THE NAIC.18
(8.5) "S
COPE CRITERIA" MEANS THE DESIGNATED EXPOSURE BASES,19
ALONG WITH MINIMUM MAGNITUDES OF EXPOSURE BASES FOR THE20
1321-2- SPECIFIED DATA YEAR, USED TO ESTABLISH A PRELIMINARY LIST OF1
INSURERS CONSIDERED SCOPED INTO THE NAIC LIQUIDITY STRESS TEST2
FRAMEWORK FOR THAT DATA YEAR .3
SECTION 2. In Colorado Revised Statutes, 10-3-804, amend4
(12) as follows:5
10-3-804. Registration of insurers. (12) (a) The ultimate6
controlling person of every insurer subject to registration shall also file7
an annual enterprise risk report. The report must, to the best of the8
ultimate controlling person's knowledge and belief, identify the material9
risks within the insurance holding company system that could pose10
enterprise risk to the insurer. The controlling person shall file the report11
with the lead state commissioner of the insurance holding company12
system as determined by the procedures within the financial analysis13
handbook adopted by the NAIC.14
(b) E
XCEPT AS PROVIDED IN SUBSECTIONS (12)(b)(I) TO15
(12)(b)(IV)
AND (12)(c) TO (12)(e) OF THIS SECTION, THE ULTIMATE16
CONTROLLING PERSON OF EACH INSURER SUBJECT TO REGISTRATION SHALL17
CONCURRENTLY FILE WITH THE REGISTRATION AN ANNUAL GROUP CAPITAL18
CALCULATION AS DIRECTED BY THE LEAD STATE COMMISSIONER . THE19
REPORT MUST BE COMPLETED IN ACCOR DANCE WITH THE NAIC GROUP20
CAPITAL CALCULATION INSTRUCTIONS , WHICH MAY PERMIT THE LEAD21
STATE COMMISSIONER TO ALLOW A CONTROLLING PERSON THAT IS NOT22
THE ULTIMATE CONTROLLING PERSON TO FILE THE GROUP CAPITAL23
CALCULATION. THE REPORT MUST BE FILED WITH THE LEAD STATE24
COMMISSIONER OF THE INSURANCE HOLDING COMPANY SYSTEM AS25
DIRECTED BY THE LEAD STATE COMMISSIONER IN ACCORDANCE WITH THE26
PROCEDURES WITHIN THE FINANCIAL ANALYSIS HANDBOOK ADOPTED BY27
1321
-3- THE NAIC. THE FOLLOWING INSURANCE HOLDING COMPANY SYSTEMS ARE1
EXEMPT FROM FILING THE GROUP CAPITAL CALCULATION :2
(I) A
N INSURANCE HOLDING COMPANY SYSTEM THAT HAS ONLY3
ONE INSURER WITHIN ITS HOLDING COMPANY STRUCTURE , THAT ONLY4
WRITES BUSINESS, AND IS ONLY LICENSED IN ITS DOMESTIC STATE AND5
ASSUMES NO BUSINESS FROM ANY OTHER INSURER ;6
(II) A
N INSURANCE HOLDING COMPANY SYSTEM THAT IS REQUIRED7
TO PERFORM A GROUP CAPITAL CALCULATION SPECIFIED BY THE UNITED8
S
TATES FEDERAL RESERVE BOARD. THE LEAD STATE COMMISSIONER SHALL9
REQUEST THE CALCULATION FROM THE FEDERAL RESERVE BOARD UNDER10
THE TERMS OF INFORMATION SHARING AGREEMENTS IN EFFECT . IF THE11
FEDERAL RESERVE BOARD CANNOT SHARE THE CALCULATION WITH THE12
LEAD STATE COMMISSIONER, THE INSURANCE HOLDING COMPANY SYSTEM13
IS NOT EXEMPT FROM THE GROUP CAPITAL CALCULATION FILING .14
(III) A
N INSURANCE HOLDING COMPANY SYSTEM WHOSE15
NON-UNITED STATES GROUP-WIDE SUPERVISOR IS LOCATED WITHIN A16
RECIPROCAL JURISDICTION AS DESCRIBED IN SECTION 10-3-702 THAT17
RECOGNIZES THE UNITED STATES' STATE REGULATORY APPROACH TO18
GROUP SUPERVISION AND GROUP CAPITAL ;19
(IV) A
N INSURANCE HOLDING COMPANY SYSTEM :20
(A) T
HAT PROVIDES INFORMATION TO THE LEAD STATE21
COMMISSIONER THAT MEETS THE REQUIREMENTS FOR ACCREDITATION22
UNDER THE NAIC FINANCIAL STANDARDS AND ACCREDITATION PROGRAM ,23
EITHER DIRECTLY OR INDIRECTLY THROUGH THE GROUP -WIDE SUPERVISOR,24
WHO HAS DETERMINED SUCH INFORMATION IS SATISFACTORY TO ALLOW25
THE LEAD STATE COMMISSIONER TO COMPLY WITH THE NAIC GROUP26
SUPERVISION APPROACH, AS DETAILED IN THE NAIC FINANCIAL ANALYSIS27
1321
-4- HANDBOOK; AND1
(B) W
HOSE NON-UNITED STATES GROUP-WIDE SUPERVISOR THAT2
IS NOT IN A RECIPROCAL JURISDICTION RECOGNIZES AND ACCEPTS , AS3
SPECIFIED BY THE LEAD STATE COMMISSIONER IN REGULATION , THE GROUP4
CAPITAL CALCULATION AS THE WORLD -WIDE GROUP CAPITAL ASSESSMENT5
FOR UNITED STATES INSURANCE GROUPS THAT OPERATE IN THAT6
JURISDICTION.7
(c) N
OTWITHSTANDING SUBSECTIONS (12)(b)(III) AND8
(12)(b)(IV)
OF THIS SECTION AND THIS SUBSECTION (12)(c), THE LEAD9
STATE COMMISSIONER SHALL REQUIRE THE GROUP CAPITAL CALCULATION10
FOR UNITED STATES OPERATIONS OF ANY NON -UNITED-STATES-BASED11
INSURANCE HOLDING COMPANY SYSTEM WHERE , AFTER ANY NECESSARY12
CONSULTATION WITH OTHER SUPERVISORS OR OFFICIALS , IT IS DEEMED13
APPROPRIATE BY THE LEAD STATE COMMISSIONER FOR PRUDENTIAL14
OVERSIGHT AND SOLVENCY MONITORING PURPOSES OR FOR ENSURING THE15
COMPETITIVENESS OF THE INSURANCE MARKETPLACE .16
(d) N
OTWITHSTANDING THE EXEMPTIONS FROM FILING THE GROUP17
CAPITAL CALCULATION STATED IN SUBSECTIONS (12)(b)(I) TO (12)(b)(IV)18
OF THIS SECTION, THE LEAD STATE COMMISSIONER MAY EXEMPT THE19
ULTIMATE CONTROLLING PERSON FROM FILING THE ANNUAL GROUP20
CAPITAL CALCULATION OR TO ACCEPT A LIMITED GROUP CAPITAL FILING21
OR REPORT IN ACCORDANCE WITH CRITERIA AS SPECIFIED BY THE22
REGULATIONS PROMULGATED BY THE LEAD STATE COMMISSIONER .23
(e) I
F THE LEAD STATE COMMISSIONER DETERMINES THAT AN24
INSURANCE HOLDING COMPANY SYSTEM NO LONGER MEETS ONE OR MORE25
OF THE REQUIREMENTS FOR AN EXEMPTION FROM FILING THE GROUP26
CAPITAL CALCULATION UNDER THIS SECTION , THE INSURANCE HOLDING27
1321
-5- COMPANY SYSTEM MUST FILE THE GROUP CAPITAL CALCULATION AT THE1
NEXT ANNUAL FILING DATE UNLESS GIVEN AN EXTENSION BY THE LEAD2
STATE COMMISSIONER BASED ON REASONABLE GROUNDS SHOWN .3
(f) (I) T
HE ULTIMATE CONTROLLING PERSON OF AN INSURER4
SUBJECT TO REGISTRATION AND ALSO SCOPED INTO THE NAIC LIQUIDITY5
STRESS TEST FRAMEWORK SHALL FILE THE RESULTS OF A SPECIFIC YEAR 'S6
LIQUIDITY STRESS TEST. THE FILING MUST BE MADE TO THE LEAD STATE7
COMMISSIONER OF THE INSURANCE HOLDING COMPANY SYSTEM AS8
DETERMINED BY THE PROCEDURES WITHIN THE FINANCIAL ANALYSIS9
HANDBOOK ADOPTED BY THE NAIC.10
(II) (A) T
HE NAIC LIQUIDITY STRESS TEST FRAMEWORK INCLUDES11
SCOPE CRITERIA APPLICABLE TO A SPECIFIC DATA YEAR . AT LEAST12
ANNUALLY, THE FINANCIAL STABILITY TASK FORCE OR ITS SUCCESSOR13
SHALL REVIEW THE SCOPE CRITERIA . ANY CHANGE TO THE NAIC14
LIQUIDITY STRESS TEST FRAMEWORK OR TO THE DATA YEAR FOR WHICH15
THE SCOPE CRITERIA ARE TO BE MEASURED TAKES EFFECT ON JANUARY 116
OF THE YEAR FOLLOWING THE CALENDAR YEAR WHEN SUCH CHANGES ARE17
ADOPTED. INSURERS MEETING AT LEAST ONE THRESHOLD OF THE SCOPE18
CRITERIA ARE CONSIDERED SCOPED INTO THE NAIC LIQUIDITY STRESS19
TEST FRAMEWORK FOR THE SPECIFIED DATA YEAR UNLESS THE LEAD STATE20
COMMISSIONER, IN CONSULTATION WITH THE NAIC FINANCIAL STABILITY21
TASK FORCE OR ITS SUCCESSOR, DETERMINES THE INSURER SHOULD NOT22
BE SCOPED INTO THE NAIC LIQUIDITY STRESS TEST FRAMEWORK FOR THAT23
DATA YEAR. SIMILARLY, INSURERS THAT DO NOT TRIGGER AT LEAST ONE24
THRESHOLD OF THE SCOPE CRITERIA ARE CONSIDERED SCOPED OUT OF THE25
NAIC
LIQUIDITY STRESS TEST FRAMEWORK FOR THE SPECIFIED DATA26
YEAR, UNLESS THE LEAD STATE COMMISSIONER , IN CONSULTATION WITH27
1321
-6- THE NAIC FINANCIAL STABILITY TASK FORCE OR ITS SUCCESSOR ,1
DETERMINES THE INSURER SHOULD BE SCOPED INTO THE FRAMEWORK FOR2
THAT DATA YEAR.3
(B) A
S PART OF THE DETERMINATION FOR AN INSURER , THE LEAD4
STATE INSURANCE COMMISSIONER , IN CONSULTATION WITH THE FINANCIAL5
STABILITY TASK FORCE OR ITS SUCCESSOR, SHALL ASSESS A REGULATOR'S6
DESIRE TO AVOID HAVING INSURERS SCOPED IN AND OUT OF THE NAIC7
LIQUIDITY STRESS TEST FRAMEWORK ON A FREQUENT BASIS .8
(III) T
HE PERFORMANCE OF, AND FILING OF THE RESULTS FROM, A9
SPECIFIC YEAR'S LIQUIDITY STRESS TEST MUST COMPLY WITH THE NAIC10
LIQUIDITY STRESS TEST FRAMEWORK 'S INSTRUCTIONS AND REPORTING11
TEMPLATES FOR THAT YEAR AND ANY LEAD STATE INSURANCE12
COMMISSIONER DETERMINATIONS , IN CONJUNCTION WITH THE NAIC13
FINANCIAL STABILITY TASK FORCE OR ITS SUCCESSOR , PROVIDED WITHIN14
THE FRAMEWORK.15
SECTION 3. In Colorado Revised Statutes, 10-3-805, amend16
(1)(a)(V); and add (1)(a)(VII), (1)(a)(VIII), (1)(a)(IX), (1)(h), and (4) as17
follows:18
10-3-805. Standards and management of an insurer within an19
insurance holding company system - rules. (1) Transactions within20
an insurance holding company system. (a) Transactions within an21
insurance holding company system to which an insurer subject to22
registration is a party are subject to the following standards:23
(V) The books, accounts, and records of each party to all such24
transactions shall be so maintained as to clearly and accurately disclose25
the nature and details of the transactions, including such accounting26
information as is necessary to support the reasonableness of the charges27
1321
-7- or fees to the respective parties; and1
(VII) (A) I
F AN INSURER SUBJECT TO THIS ARTICLE 3 IS DEEMED BY2
THE COMMISSIONER TO BE IN A HAZARDOUS FINANCIAL
CONDITION, AS3
DEFINED BY RULE OF THE COMMISSIONER , OR A CONDITION THAT WOULD4
BE GROUNDS FOR SUPERVISION , CONSERVATION, OR A DELINQUENCY5
PROCEEDING, THEN THE COMMISSIONER MAY REQUIRE THE INSURER TO6
SECURE AND MAINTAIN EITHER A DEPOSIT , HELD BY THE COMMISSIONER,7
OR A BOND, AS DETERMINED BY THE INSURER AT THE INSURER 'S8
DISCRETION, FOR THE PROTECTION OF THE INSURER FOR THE DURATION OF9
THE CONTRACT OR AGREEMENT , OR THE EXISTENCE OF THE CONDITION FOR10
WHICH THE COMMISSIONER REQUIRED THE DEPOSIT OR THE BOND .11
(B) I
N DETERMINING WHETHER A DEPOSIT OR A BOND IS REQUIRED ,12
THE COMMISSIONER SHALL CONSIDER WHETHER CONCERNS EXIST WITH13
RESPECT TO THE AFFILIATED PERSON'S ABILITY TO FULFILL A CONTRACT OR14
AGREEMENT IF THE INSURER WERE TO BE PUT INTO LIQUIDATION . ONCE15
THE INSURER IS DEEMED TO BE IN A HAZARDOUS FINANCIAL CONDITION OR16
A CONDITION THAT WOULD BE GR OUNDS FOR SUPERVISION ,17
CONSERVATION, OR A DELINQUENCY PROCEEDING , AND A DEPOSIT OR18
BOND IS NECESSARY, THE COMMISSIONER MAY DETERMINE THE AMOUNT19
OF THE DEPOSIT OR BOND, NOT TO EXCEED THE VALUE OF A CONTRACT OR20
AGREEMENT IN ANY ONE YEAR , AND WHETHER SUCH DEPOSIT OR BOND21
SHOULD BE REQUIRED FOR A SINGLE CONTRACT , MULTIPLE CONTRACTS, OR22
A CONTRACT ONLY WITH A SPECIFIC PERSON .23
(VIII) T
HE RECORDS AND DATA OF THE INSURER HELD BY AN24
AFFILIATE ARE AND REMAIN THE PROPERTY OF THE INSURER AND ARE25
SUBJECT TO CONTROL OF THE INSURER . THE AFFILIATE SHALL ENSURE26
THAT THE RECORDS AND DATA ARE IDENTIFIABLE AND ARE SEGREGATED27
1321
-8- OR READILY CAPABLE OF SEGREGATION , AT NO ADDITIONAL COST TO THE1
INSURER, FROM ALL OTHER PERSONS' RECORDS AND DATA. THIS INCLUDES2
ALL RECORDS AND DATA THAT ARE OTHERWISE THE PROPERTY OF THE3
INSURER, IN WHATEVER FORM MAINTAINED , INCLUDING CLAIMS AND4
CLAIM FILES, POLICYHOLDER LISTS, APPLICATION FILES, LITIGATION FILES,5
PREMIUM RECORDS, RATE BOOKS, UNDERWRITING MANUALS , PERSONNEL6
RECORDS, FINANCIAL RECORDS, OR SIMILAR RECORDS WITHIN THE7
POSSESSION, CUSTODY, OR CONTROL OF THE AFFILIATE. AT THE REQUEST8
OF THE INSURER, THE AFFILIATE SHALL PERMIT THE RECEIVER TO OBTAIN9
A COMPLETE SET OF ALL RECORDS OF ANY TYPE THAT PERTAIN TO THE10
INSURER'S BUSINESS, OBTAIN ACCESS TO THE OPERATING SYSTEMS ON11
WHICH THE DATA IS MAINTAINED, OBTAIN THE SOFTWARE THAT RUNS THE12
OPERATING SYSTEMS EITHER THROUGH ASSUMPTION OF LICENSING13
AGREEMENTS OR OTHERWISE , AND RESTRICT THE USE OF THE DATA BY THE14
AFFILIATE IF THE RECEIVER OR THE AFFILIATE IS NOT OPERATING THE15
INSURER'S BUSINESS. THE AFFILIATE SHALL PROVIDE A WAIVER OF ANY16
LANDLORD LIEN OR OTHER ENCUMBRANCE TO GIVE THE INSURER ACCESS17
TO ALL RECORDS AND DATA IN THE EVENT OF THE AFFILIATE 'S DEFAULT18
UNDER A LEASE OR OTHER AGREEMENT .19
(IX) A
PREMIUM OR OTHER MONEY BELONGING TO THE INSURER20
THAT IS COLLECTED BY OR HELD BY AN AFFILIATE IS THE EXCLUSIVE21
PROPERTY OF THE INSURER AND IS SUBJECT TO THE CONTROL OF THE22
INSURER. ANY RIGHT OF OFFSET IN THE EVENT AN INSURER IS PLACED INTO23
RECEIVERSHIP IS SUBJECT TO PART 5 OF THIS ARTICLE 3.24
(h) (I) A
N AFFILIATE THAT IS PARTY TO AN AGREEMENT OR25
CONTRACT WITH A DOMESTIC INSURER THAT IS SUBJECT TO SUBSECTION26
(1)(b)(IV)
OF THIS SECTION IS SUBJECT TO THE JURISDICTION OF ANY27
1321
-9- SUPERVISION, SEIZURE, CONSERVATORSHIP , OR RECEIVERSHIP1
PROCEEDINGS AGAINST THE INSURER AND TO THE AUTHORITY OF ANY2
SUPERVISOR, CONSERVATOR, REHABILITATOR, OR LIQUIDATOR FOR THE3
INSURER APPOINTED PURSUANT TO SUPERVISION AND RECEIVERSHIP ACTS4
FOR THE PURPOSE OF INTERPRETING, ENFORCING, AND OVERSEEING THE5
AFFILIATE'S OBLIGATIONS UNDER THE AGREEMENT OR CONTRACT TO6
PERFORM SERVICES FOR THE INSURER THAT :7
(A) A
RE AN INTEGRAL PART OF THE INSURER 'S OPERATIONS,8
INCLUDING MANAGEMENT , ADMINISTRATION, ACCOUNTING, DATA9
PROCESSING, MARKETING, UNDERWRITING , CLAIMS HANDLING ,10
INVESTMENT, OR ANY OTHER SIMILAR FUNCTIONS; OR11
(B) A
RE ESSENTIAL TO THE INSURER'S ABILITY TO FULFILL ITS12
OBLIGATIONS UNDER ITS INSURANCE POLICIES .13
(II) T
HE COMMISSIONER MAY REQUIRE THAT AN AGREEMENT OR14
CONTRACT PURSUANT TO SUBSECTION (1)(b)(IV) OF THIS SECTION FOR THE15
PROVISION OF SERVICES DESCRIBED IN SUBSECTION (1)(h)(I) OF THIS16
SECTION SPECIFY THAT THE AFFILIATE CONSENTS TO THE JURISDICTION AS17
SET FORTH IN THIS SUBSECTION (1)(h).18
(4) T
HE COMMISSIONER MAY PROMULGATE RULES TO IMPLEMENT19
THIS SECTION.20
SECTION 4. In Colorado Revised Statutes, 10-3-808, amend (1),21
(3)(a), (3)(c), (3)(d), and (6); and add (7) as follows:22
10-3-808. Confidential treatment. (1) (a) Documents, materials,23
or other information in the possession or control of the division that are24
obtained by or disclosed to the commissioner or any other person in the25
course of an examination or investigation made pursuant to section26
10-3-806 and all information reported pursuant to section 10-3-803 (2)(l)27
1321
-10- and (2)(m), 10-3-804, or 10-3-805 ARE PROPRIETARY AND CONTAIN1
TRADE SECRETS AND are confidential by law and privileged; are not2
subject to the "Colorado Open Records Act", part 2 of article 72 of title3
24; C.R.S., are not subject to subpoena; and are not subject to discovery4
or admissible in evidence in any private civil action. However, the5
commissioner is authorized to use the documents, materials, or other6
information in the furtherance of any regulatory or legal action brought7
as a part of the commissioner's official duties. The commissioner shall not8
otherwise make the documents, materials, or other information public9
without the prior written consent of the insurer to which they pertain10
unless the commissioner, after giving the insurer and its affiliates who11
would be affected notice and opportunity to be heard, determines that the12
interest of policyholders, shareholders, or the public will be served by the13
publication, in which event the commissioner may publish all or any part14
OF THE DOCUMENTS, MATERIALS, OR OTHER INFORMATION in such manner15
as the commissioner deems appropriate.16
(b) F
OR PURPOSES OF THE INFORMATION REPORTED AND PROVIDED17
TO THE DIVISION PURSUANT TO SECTION 10-3-804 (12)(b), THE18
COMMISSIONER SHALL MAINTAIN THE CONFIDENTIALITY OF THE GROUP19
CAPITAL CALCULATION AND GROUP CAPITAL RATIO PR ODUCED WITHIN THE20
CALCULATION AND ANY GROUP CAPITAL INFORMATION RECEIVED FROM AN21
INSURANCE HOLDING COMPANY SUPERVISED BY THE FEDERAL RESERVE22
BOARD OR ANY UNITED STATES GROUP-WIDE SUPERVISOR.23
(c) F
OR THE PURPOSES OF THE INFORMATION REPORTED AND24
PROVIDED TO THE DIVISION PURSUANT TO SECTION 10-3-804 (12)(f), THE25
COMMISSIONER SHALL MAINTAIN THE CONFIDENTIALITY OF THE LIQUIDITY26
STRESS TEST RESULTS AND SUPPORTING DISCLOSURES AND ANY LIQUIDITY27
1321
-11- STRESS TEST INFORMATION RECEIVED FROM AN INSURANCE HOLDING1
COMPANY SUPERVISED BY THE FEDERAL RESERVE BOARD AND2
NON-UNITED STATES GROUP-WIDE SUPERVISORS.3
(3) In order to assist in the performance of the commissioner's4
duties, the commissioner:5
(a) May share documents, materials, or other information,6
including the confidential and privileged documents, materials, or7
information subject to subsection (1) of this section
AND PROPRIETARY8
AND TRADE SECRET DOCUMENTS AND MATERIALS , with other state,9
federal, and international regulatory agencies, with the NAIC, and its
10
affiliates and subsidiaries WITH ANY THIRD-PARTY CONSULTANTS11
DESIGNATED BY THE COMMISSIONER , and with state, federal, and12
international law enforcement authorities, including members of any A13
supervisory college described in section 10-3-807, if the recipient agrees14
in writing to maintain the confidentiality and privileged status of the15
document, material, or other information
OR PROPRIETARY AND TRADE16
SECRET DOCUMENT AND MATERIAL and has verified in writing the legal17
authority to maintain confidentiality;18
(c) May receive documents, materials, or information, including19
otherwise confidential and privileged documents, materials, or20
information
AND PROPRIETARY AND TRADE SECRET INFORMATION , from21
the NAIC and its affiliates and subsidiaries and from regulatory and law22
enforcement officials of other foreign or domestic jurisdictions, and shall23
maintain as confidential or privileged any document, material, or24
information
OR PROPRIETARY AND TRADE SECRET DOCUMENTS AND25
MATERIALS received with notice or the understanding that it is26
confidential or privileged under the laws of the jurisdiction that is the27
1321
-12- source of the document, material, or information OR PROPRIETARY AND1
TRADE SECRET DOCUMENT AND MATERIAL ; and2
(d) Shall enter into written agreements with the NAIC
AND ANY3
THIRD-PARTY CONSULTANT DESIGNATED BY THE COMMISSIONER4
governing the sharing and use of information provided pursuant to this5
part 8 consistent with this subsection (3) that must:6
(I) Specify procedures and protocols regarding the confidentiality7
and security of information shared with the NAIC and its affiliates and
8
subsidiaries OR A THIRD-PARTY CONSULTANT DESIGNATED BY THE9
COMMISSIONER pursuant to this part 8, including procedures and protocols10
for sharing by the NAIC with other state, federal, or international11
regulators. T
HE AGREEMENT MUST STATE THAT THE RECIPIENT AGREES TO12
MAINTAIN THE CONFIDENTIALITY AND PRIVILEGED STATUS OF THE13
DOCUMENTS, MATERIALS, OR OTHER INFORMATION OR PROPRIETARY AND14
TRADE SECRET DOCUMENTS AND MATERIALS AND HAS VERIFIED IN15
WRITING THE LEGAL AUTHORITY TO MAINTAIN SUCH CONFIDENTIALITY .16
(II) Specify that ownership of information shared with the NAIC17
and its affiliates and subsidiaries
OR A THIRD-PARTY CONSULTANT18
pursuant to this part 8 remains with the commissioner and that the NAIC's19
use of the information USE OF THE INFORMATION BY THE NAIC OR THE20
THIRD-PARTY CONSULTANT AS DESIGNATED BY THE COMMISSIONER is21
subject to the direction of the commissioner;22
(II.5) E
XCLUDING DOCUMENTS , MATERIAL, OR INFORMATION23
REPORTED PURSUANT TO SECTION 10-3-804 (12)(f), PROHIBIT THE NAIC24
OR A THIRD-PARTY CONSULTANT DESIGNATED BY THE COMMISSIONER25
FROM STORING THE INFORMATION SHARED PURSUANT TO THIS SECTION IN26
A PERMANENT DATABASE AFTER THE UNDERLYING ANALYSIS IS27
1321
-13- COMPLETED.1
(III) Require prompt notice to be given to an insurer whose2
confidential information in the possession of the NAIC OR THIRD-PARTY3
CONSULTANT DESIGNATED BY THE COMMISSIONER pursuant to this part 84
is subject to a request or subpoena to the NAIC OR THIRD-PARTY5
CONSULTANT DESIGNATED BY THE COMMISSIONER for disclosure or6
production; and7
(IV) Require the NAIC and its affiliates and subsidiaries OR A8
THIRD-PARTY CONSULTANT DESIGNATED BY THE COMMISSIONER to9
consent to intervention by an insurer in any judicial or administrative10
action in which the NAIC and its affiliates and subsidiaries OR A11
THIRD-PARTY CONSULTANT DESIGNATED BY THE COMMISSIONER may be12
required to disclose confidential information about the insurer shared with13
the NAIC and its affiliates and subsidiaries OR A THIRD-PARTY14
CONSULTANT DESIGNATED BY THE COMMISSIONER pursuant to this part 8;15
AND16
(V) F
OR DOCUMENTS, MATERIAL, OR INFORMATION REPORTED17
PURSUANT TO SECTION 10-3-804 (12)(f), WHERE THERE IS AN AGREEMENT18
INVOLVING A THIRD-PARTY CONSULTANT, PROVIDE FOR NOTIFICATION OF19
THE IDENTITY OF THE CONSULTANT TO THE APPLICABLE INSURERS .20
(6) Documents, materials, or other information
OR PROPRIETARY21
AND TRADE SECRET DOCUMENTS AND MATERIALS in the possession or22
control of the NAIC
OR A THIRD-PARTY CONSULTANT DESIGNATED BY THE23
COMMISSIONER pursuant to this part 8 are confidential by law and24
privileged; are not subject to the "Colorado Open Records Act", part 2 of25
article 72 of title 24; C.R.S.,
are not subject to subpoena; and are not26
subject to discovery or admissible in evidence in any private civil action. 27
1321
-14- (7) (a) THE GROUP CAPITAL CALCULATION AND RESULTING GROUP1
CAPITAL RATIO REQUIRED BY SECTION 10-3-804 (12)(b) AND THE2
LIQUIDITY STRESS TEST ALONG WITH ITS RESULTS AND SUPPORTING3
DISCLOSURES REQUIRED BY SECTION 10-3-804 (12)(f) ARE REGULATORY4
TOOLS FOR ASSESSING GROUP RISKS AND CAPITAL ADEQUACY AND GROUP5
LIQUIDITY RISKS, RESPECTIVELY, AND ARE NOT INTENDED AS A MEANS TO6
RANK INSURERS OR INSURANCE HOLDING COMP ANY SYSTEMS GENERALLY .7
(b) (I) E
XCEPT AS PROVIDED IN SUBSECTION (7)(b)(II) OF THIS8
SECTION, ANY INSURER, BROKER, OR OTHER PERSON ENGAGED IN ANY9
MANNER IN THE INSURANCE BUSINESS SHALL NOT ADVERTISE , ANNOUNCE,10
OR STATE A REPRESENTATION REGARDING THE GROUP CAPITAL11
CALCULATION, GROUP CAPITAL RATIO, LIQUIDITY STRESS TEST RESULTS,12
OR SUPPORTING DISCLOSURES FOR THE LIQUIDITY STRESS TEST OF ANY13
INSURER OR ANY INSURER GROUP, OR OF ANY COMPONENT DERIVED IN THE14
CALCULATION BY DIRECTLY OR INDIRECTLY MAKING , PUBLISHING,15
DISSEMINATING, CIRCULATING, OR PLACING THE REPRESENTATION BEFORE16
THE PUBLIC:17
(A) I
N A NEWSPAPER, MAGAZINE, OR OTHER PUBLICATION; OR18
(B) I
N THE FORM OF A NOTICE, CIRCULAR, PAMPHLET, LETTER, OR19
POSTER; OR20
(C) O
VER ANY RADIO OR TELEVISION STATION OR ANY ELECTRONIC21
MEANS OF COMMUNICATION AVAILABLE TO THE PUBLIC ; OR22
(D) I
N ANY OTHER WAY AS AN ADVERTISEMENT .23
(II) A
N INSURER MAY PUBLISH AN ANNOUNCEMENT ,24
ADVERTISEMENT, OR STATEMENT DESCRIBED IN SUBSECTION (7)(b)(I) OF25
THIS SECTION IN A WRITTEN PUBLICATION IF THE SOLE PURPOSE OF THE26
ANNOUNCEMENT IS TO REBUT THE MATERIALLY FALSE STATEMENT WHEN27
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IN A WRITTEN PUBLICATION AND THE INSURER IS ABLE TO DEMONSTRATE2
TO THE COMMISSIONER WITH SUBSTANTIAL PROOF THE FALSITY OR3
INAPPROPRIATENESS OF SUCH ANNOUNCEMENT , ADVERTISEMENT, OR4
STATEMENT.5
SECTION 5. In Colorado Revised Statutes, amend 10-3-7056
as follows:7
10-3-705. Rules. (1) The commissioner may adopt rules8
implementing this part 7.9
(2) (a) THE COMMISSIONER MAY ADOPT RULES APPLICABLE TO10
REINSURANCE ARRANGEMENTS DESCRIBED IN THIS SUBSECTION (2)(a).11
RULES ADOPTED PURSUANT TO THIS SUBSECTION (2) MUST APPLY ONLY TO12
REINSURANCE RELATING TO:13
(I) LIFE INSURANCE POLICIES WITH GUARANTEED NONLEVEL GROSS14
PREMIUMS OR GUARANTEED NONLEVEL BENEFITS ;15
(II) UNIVERSAL LIFE INSURANCE POLICIES WITH PROVISIONS16
RESULTING IN THE ABILITY OF A POLICYHOLDER TO KEEP A POLICY IN17
FORCE OVER A SECONDARY GUARANTEE PERIOD ;18
(III) VARIABLE ANNUITIES WITH GUARANTEED DEATH OR LIVING19
BENEFITS;20
(IV) LONG-TERM CARE INSURANCE POLICIES; OR21
(V) OTHER LIFE AND HEALTH INSURANCE AND ANNUITY PRODUCTS22
AS TO WHICH THE NAIC ADOPTS MODEL REGULATORY REQUIREMENTS23
WITH RESPECT TO CREDIT FOR REINSURANCE .24
(b) A RULE ADOPTED PURSUANT TO SUBSECTION (2)(a)(I) OR25
(2)(a)(II) OF THIS SECTION MUST APPLY TO ANY TREATY CONTAINING :26
(I) POLICIES ISSUED ON OR AFTER JANUARY 1, 2015; OR27
1321
-16- (II) POLICIES ISSUED PRIOR TO JANUARY 1, 2015, IF RISK1
PERTAINING TO PRE-2015 POLICIES IS CEDED IN CONNECTION WITH THE2
TREATY, IN WHOLE OR IN PART, ON OR AFTER JANUARY 1, 2015.3
(c) A RULE ADOPTED PURSUANT THIS SUBSECTION (2) MAY4
REQUIRE THE CEDING INSURER, IN CALCULATING THE AMOUNTS OR FORMS5
OF SECURITY REQUIRED TO BE HELD UNDER RULES PROMULGATED UNDER6
THIS SUBSECTION (2), TO USE THE VALUATION MANUAL ADOPTED BY THE7
NAIC UNDER THE NAIC STANDARD VALUATION LAW, INCLUDING ALL8
AMENDMENTS ADOPTED BY THE NAIC AND IN EFFECT ON THE DATE ON9
WHICH THE CALCULATION IS MADE , TO THE EXTENT APPLICABLE.10
(d) A RULE ADOPTED PURSUANT TO THIS SUBSECTION (2) DOES NOT11
APPLY TO CESSIONS TO AN ASSUMING INSURER THAT :12
(I) (A) MEETS THE CONDITIONS SET FORTH IN SECTION 10-3-70213
(6.5);14
(B) IS CERTIFIED IN THIS STATE; OR15
(C) MAINTAINS AT LEAST TWO HUNDRED FIFTY MILLION DOLLARS16
IN CAPITAL AND SURPLUS WHEN CALCULATED IN ACCORDANCE WITH THE17
MOST RECENT NAIC ACCOUNTING PRACTICES AND PROCEDURES M ANUAL,18
AS AMENDED BY THE NAIC, EXCLUDING THE IMPACT OF ANY PERMITTED19
OR PRESCRIBED PRACTICES; AND20
(II) IS LICENSED:21
(A) IN AT LEAST TWENTY-SIX STATES; OR22
(B) IN AT LEAST TEN STATES AND LICENSED OR ACCREDITED IN A23
TOTAL OF AT LEAST THIRTY-FIVE STATES.24
(e) THE AUTHORITY TO ADOPT RULES PURSUANT TO THIS25
SUBSECTION (2) DOES NOT LIMIT THE COMMISSIONER'S GENERAL26
AUTHORITY TO ADOPT RULES PURSUANT TO SUBSECTION (1) OF THIS27
1321
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(f) AS USED IN THIS SUBSECTION (2), "NAIC" MEANS THE2
NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS.3
SECTION 6. Act subject to petition - effective date. This act4
takes effect January 1, 2025; except that, if a referendum petition is filed5
pursuant to section 1 (3) of article V of the state constitution against this6
act or an item, section, or part of this act within the ninety-day period7
after final adjournment of the general assembly, then the act, item,8
section, or part will not take effect unless approved by the people at the9
general election to be held in November 2024 and, in such case, will take10
effect January 1, 2025, or on the date of the official declaration of the11
vote thereon by the governor, whichever is later.12
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