Automobile Insurance Coverage for U.S. Military Personnel Called to Active Duty
Proposed Repeal of regulation 5-2-13
Automobile Insurance Coverage For U.S. Military Personnel Called To Active Duty
Section 1 Authority
Section 2 Background And Purpose
Section 3 Applicability And Scope
Section 4 Definitions
Section 5 Rules
Section 6 Enforcement
Section 7 Severability
Section 8 Effective Date
Section 1 Authority
This regulation is promulgated pursuant to §§ 10-1-109, 10-3-1110, 10-4-404, and 10-4-601.5, C.R.S.
Section 2 Background And Purpose
The purpose of this regulation is to ensure that members of the Armed Forces deployed or called to active duty in service of our country retain access to affordable automobile insurance coverage and are treated fairly by automobile insurers. U.S. servicemen and women usually terminate their automobile insurance or allow their policies to lapse upon deployment or call to active duty. Unfortunately, the Division has been informed that when their tour of duty ends, some insurers refuse to reinstate their policy, refuse to issue a new policy or increase their premiums on the basis they had no prior insurance.
Underwriting criteria that considers whether an applicant had prior insurance is often appropriate when issuing automobile insurance policies. However, it is not fair to apply this criteria to military personnel deployed or called to active duty who risk their lives in service of our country. The Commissioner of Insurance finds that to penalize servicemen and women in this manner is contrary to public policy.
Section 3 Applicability And Scope
This regulation shall apply to all carriers who issue automobile insurance policies in the State of Colorado.
Section 4 Definitions
The definitions in § 10-4-601, C.R.S. shall apply to this regulation.
Section 5 Rules
- Insurers issuing automobile insurance policies covering members of the U.S. Armed Forces shall not unilaterally reduce or cancel coverage due to the covered person’s failure to maintain coverage during the period the covered person is deployed or called to active duty in the U.S. military.
- Insurers issuing automobile insurance policies covering members of the U.S. Armed Forces where the covered person is deployed or called to active duty shall not refuse to issue, reinstate or renew the policy, or a substantially similar policy, upon the covered person’s return from duty, on the grounds the covered person had no prior insurance.
- Insurers issuing automobile insurance policies covering members of the U.S. Armed Forces where the covered person is deployed or called to active duty shall not surcharge a newly issued, reinstated or renewed policy upon the covered person’s return from duty on the grounds the covered person had no prior insurance.
- Insurers issuing automobile insurance policies covering members of the U.S. Armed Forces where the covered person is deployed or called to active duty shall treat any newly issued, reinstated or renewed policy as being continuously in effect regarding rating of the policy. For example, among other things, insurers shall not remove longevity discounts on such policies, or place covered persons in more expensive tiers where the reason for the “lapse” in coverage was the covered person’s call to active duty in the U.S. military.
- Insurers may impose reasonable requirements, policies and procedures upon covered persons to verify the fact and duration of the relevant period of military service.
- Failure to comply with the provisions of this regulation constitutes an unfair or deceptive act or practice in the business of insurance pursuant to § 10-3-1104, C.R.S.
Section 6 Enforcement
Noncompliance with the requirements and timeframes specified in this regulation may result, after proper notice and hearing, in the imposition of any sanctions made available in Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspension or revocation of license.
Section 7 Severability
If any provision of this regulation is for any reason held to be invalid, the remainder of the regulation shall not be affected.
Section 8 Effective Date
- Regulation Repealed, effective May 1, 2012.
- Emergency Regulation 04-E-2 was effective May 25, 2004.
- This regulation is effective September 30, 2004.
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