Colorado § 10-1-204 - Conduct of examinations - conferences - penalty.

§ 10-1-204. Conduct of examinations - conferences - penalty.

(1) (a) In conducting the examination, the examiners shall observe those guidelines and procedures set forth in the examiners' handbook adopted by the national association of insurance commissioners and the Colorado insurance examiners handbook. The commissioner may also employ other guidelines or procedures as the commissioner deems appropriate.

(b) Repealed.

(2) (a) Every company or person from whom information is sought and all officers, directors, and agents of the company or person shall provide to the examiners timely, convenient, and free access at reasonable hours at its offices to all books, records, accounts, papers, tapes, computer records, and other documents relating to the property, assets, business, and affairs of the company being examined. The company or person shall make the books, records, and documents available for examination or inspection at the office location of the division when the commissioner determines that it is reasonably cost-effective to do so. The officers, directors, employees, and agents of the company or person shall facilitate the examination and aid in the examination to the extent it is in their power to do so.

(b) (I) The refusal of any company or any of its officers, directors, employees, or agents to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension, revocation, denial, or nonrenewal of any license or authority held by the company and subject to the commissioner's jurisdiction.

(II) Proceedings for any suspension or revocation pursuant to this subsection (2) shall be conducted in accordance with section 10-1-110.

(3) Repealed.

(4) Any person who knowingly or willfully testifies falsely in reference to any matter material to an examination or inquiry commits a class 2 misdemeanor.

(5) Any person who knowingly or willfully makes any false certificate, entry, or memorandum upon any of the books or papers of a company or upon any statement filed or offered to be filed in the division or used in the course of any examination or inquiry, with the intent to deceive the commissioner or any person appointed by the commissioner to conduct or make the examination or inquiry, commits a class 2 misdemeanor.

(6) (a) In addition to any other powers granted to the commissioner in this section or in any other provision of law, the commissioner may require any company, entity, or new applicant to be examined by independent examiners certified by the society of financial examiners or the insurance regulatory examiners society, actuaries who are members of the American academy of actuaries, or by any other qualified and competent loss reserve specialists, independent risk managers, independent certified public accountants, auditors, other examiners of insurance companies, or combination of such persons. Any domestic company may make a request to the commissioner to be so examined.

(b) (I) The commissioner may accept, as part of an examination, reports made by any person qualified and competent to conduct the examination as set forth in this subsection (6); except that neither the person, nor any member of the person's immediate family, may be:

(A) An officer of, connected with, or financially interested in the company, entity, or applicant being examined, other than as a policyholder; or

(B) Financially interested in any other corporation or person affected by the examination or by any related investigation or hearing.

(II) A person that conducts an examination pursuant to this subsection (6) shall keep strictly confidential all information, regardless of its source, obtained through any examination or about any examinee and shall disclose the information only to the commissioner or the examinee upon the specific request of either. The commissioner shall establish guidelines for assuring the neutrality of those persons to be authorized to supplement the examination procedures authorized in this section.

(III) The examinee shall pay the reasonable expenses and charges of a person retained or designated pursuant to this subsection (6) directly to the person. The examinee may contest the amount of fees, costs, and expenses charged by the person by filing an objection with the commissioner, setting forth the charges that the examinee considers to be unreasonable and the basis for the claim that the charges are unreasonable. A disputed amount is not due to the examiner unless the commissioner reviews the objection and makes a written finding that the disputed charges were reasonable in relation to the examination performed.

(7) Nothing contained in this part 2 shall be construed to limit the commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action.

(8) Nothing contained in this part 2 shall be construed to limit the commissioner's authority to use and, if appropriate, to make public, if consistent with section 10-3-414, any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action that the commissioner may, in the commissioner's sole discretion, deem appropriate.

(9) (a) For examinations of foreign companies made outside the borders of this state and of executive or branch offices of domestic companies located outside the borders of this state, the examined company shall pay the costs of the examination, including the expenses of the commissioner and the commissioner's assistants, who must be paid the same compensation as other examiners on such examinations.

(b) and (c) Repealed.

(d) When insurance companies not authorized to do business in this state, companies adjudged insolvent, or companies for any cause withdrawing from this state neglect, fail, or refuse to pay the reasonable charges for examination as approved by the commissioner, such charges shall be paid by the state treasurer from the general fund upon the order of the commissioner, and the amount so paid shall be a first lien upon all assets and property of such company and may be recovered by suit by the attorney general on behalf of the state of Colorado and restored to the general fund.

(10) and (11) Repealed.

Source: L. 2003: Entire article RC&RE, p. 607, § 1, effective July 1. L. 2014: (11) added, (SB 14-210), ch. 267, p. 1068, § 1, effective August 6. L. 2017: (1)(a), (2)(a), (4), (5), (6)(b), and (9)(a) amended and (1)(b), (3), (9)(b), (9)(c), (10), and (11) repealed, (HB 17-1231), ch. 284, p. 1556, § 4, effective January 1, 2018. L. 2021: (4) and (5) amended, (SB 21-271), ch. 462, p. 3146, § 108, effective March 1, 2022.

Editor's note: This section is similar to former § 10-1-204 as it existed prior to 2002.

Cross references: For the penalty for a class 2 misdemeanor, see § 18-1.3-501.

ANNOTATION

Annotator's note. Since § 10-1-204 is similar to § 10-1-204 as it existed prior to the 2002 repeal of article 1 of title 10, a relevant case construing that provision has been included in the annotations to this section.

Public entity self-insurance pools such as the Colorado intergovernmental risk sharing agency are not to be construed to be insurance companies and are not otherwise subject to state laws regulating insurance companies except that they are subject to subsections (1) to (5) and (10) of this section and § 10-1-203. City of Arvada v. Colo. Intergovernmental Risk Sharing Agency, 988 P.2d 184 (Colo. App. 1999), aff'd, 19 P.3d 10 (Colo. 2001).