Colorado § 10-20-113 - Credits for assessments paid - tax offsets.

§ 10-20-113. Credits for assessments paid - tax offsets.

(1) (a) A member insurer may offset against its premium tax liability to this state that amount of its class B assessment described in section 10-20-109 that was assessed for the association's life and annuity accounts pursuant to section 10-20-106 to the extent of twenty percent of the amount of such assessment for each of the first, second, third, fourth, and fifth calendar years following the year in which such assessment was paid.

(b) To the extent the offsets specified in paragraph (a) of this subsection (1) exceed the member insurer's premium tax liability, they may be carried forward to offset premium tax liabilities in future years. In the event a member insurer should cease doing business, all uncredited assessments may be credited against its premium tax liability for the year it ceases doing business.

(c) In no event shall the total amount of all such offsets for all member insurers exceed four million dollars in any year. The association shall prorate the amount of such offset among all member insurers if the total amount of offset would otherwise exceed four million dollars in any such year and shall notify each insurer of the maximum amount of offset allowable for that year and the amount of the excess offset, if any, that may be carried forward to future years.

(d) (I) Each member insurer writing health insurance or health maintenance organization policies or contracts may recoup over a reasonable length of time a sum reasonably calculated to recoup the assessments paid by the member insurer under this article 20 by imposing a surcharge on premiums charged for health insurance or health maintenance organization policies or contracts to which this article 20 applies. Amounts recouped are not premiums for any other purpose, including the computation of gross premium tax or an agent's commission.

(II) A member insurer that imposes a surcharge under subsection (1)(d)(I) of this section shall include the amount of the surcharge as part of the member insurer's rate filing pursuant to section 10-16-107 (1). The member insurer must show the surcharge in the rate filing as a separate component of the rate and shall include supporting documentation.

(III) A member insurer that collects surcharges in excess of assessments paid pursuant to this article 20 for an insolvent insurer shall remit the excess to the association as an additional assessment within one hundred twenty days after the end of the collection period as determined by the association. The association shall apply the excess amount to reduce future assessments for that member insurer in the appropriate category.

(IV) (Deleted by amendment, L. 2023.)

(2) Any sums which are acquired by refund pursuant to section 10-20-109 (6) from the association by member insurers, and which have theretofore been offset against premium taxes as provided in subsection (1) of this section, shall be paid by such insurers to this state in such manner as the tax authorities may require. The association shall notify the commissioner that such payments have been made.

(3) (a) The purpose of the credit authorized in subsection (1)(a) of this section is to offset the cost for an insurer paying required assessments into the life and health insurance protection association created in section 10-20-106 (1).

(b) The effectiveness of the credit authorized in subsection (1)(a) of this section is measured by how many eligible insurers claim the credit and the amount claimed relative to payments into the life and health insurance protection association created in section 10-20-106 (1).

Source: L. 91: Entire article added, p. 1276, § 1, effective July 1. L. 92: (1)(d)(II) amended, p. 1726, § 12, effective July 1. L. 2000: (1)(a) and (1)(c) amended, p. 1023, § 7, effective July 1. L. 2023: (1)(d) amended, (HB 23-1303), ch. 195, p. 992, § 13, effective May 15. L. 2025: (3) added, (SB 25-026), ch. 362, p. 1964, § 4, effective August 6.