Colorado § 10-3-401 - Legislative declaration.

§ 10-3-401. Legislative declaration.

(1) The purpose of this part 4 is to make available to the commissioner supplemental remedial authority in instances of insurance company delinquencies of various kinds and degrees which demand regulation and control by the commissioner in order to effectuate his responsibility that the business of insurance in this state is conducted according to law and his responsibility to protect the policyholders and public of this state. Most delinquencies are of such a kind or degree as to not justify the imposing of the remedy or sanction of loss of certificate or of rehabilitation or liquidation by court order. Either of the remedies of loss of certificate or of rehabilitation or liquidation by court order would in many instances defeat any realistic opportunity to rehabilitate the delinquent company. Such remedies are likely to destroy or diminish one or more of the following values or assets: The value of the insurance account or in-force business of the insurer; the value of the insurer as a going concern; the value of its agency force; and the value of other of its assets.

(2) The remedial steps provided by this part 4 are provided with the purpose in mind that insurance companies committing or suffering a delinquency be rehabilitated where and whenever possible with no loss of public confidence in the companies, and thus avoid the loss of a certificate of or the institution of rehabilitation or liquidation proceedings, by court order, against any insurance company, where possible. Furthermore, the remedial steps provided in this part 4 are provided to protect the assets of an insurer pending determination of whether or not the insurer can be successfully rehabilitated. In instances where rehabilitation or liquidation by court order are inevitable, it is nevertheless the purpose of this part 4 to allow preliminary or emergency supervision to prevent a dissipation of assets from taking place, and thus benefit the policyholders of the company. In such an instance, this part 4 shall operate in conjunction with part 5 of this article.

Source: L. 69: p. 544, § 3. C.R.S. 1963: § 72-29-1. L. 92: Entire section amended, p. 1424, § 5, effective July 1.

ANNOTATION

An interinsurance exchange is included in the definition of insurance company in former § 10-1-102 (4) (now § 10-1-102 (6)). Because § 10-13-114 applies the regulatory remedies in §§ 10-3-401 to 10-3-414 to interinsurance exchanges, the insurance commissioner has the discretion to rehabilitate an interinsurance exchange in the same manner as any other insurance company. Alias Smith & Jones v. Barnes, 695 P.2d 302 (Colo. App. 1984).