Colorado § 10-4-503 - Definitions.

§ 10-4-503. Definitions.

As used in this part 5, unless the context otherwise requires:

(1) "Account" means any one of the three accounts created by section 10-4-506.

(2) "Association" means the Colorado insurance guaranty association created under section 10-4-506.

(3) "Commissioner" means the commissioner of insurance of this state.

(4) (a) "Covered claim" means an unpaid claim, including one for unearned premiums:

(I) That arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this part 5 applies issued by an insurer if such insurer becomes an insolvent insurer after July 1, 1971; and

(II) With respect to which the claimant or insured is a resident of this state at the time of the insured event or the claim is a first-party claim for damage to property with a permanent location in this state.

(b) "Covered claim" does not include:

(I) Any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise; except that:

(A) A claim for any such amount asserted against a person insured under a policy issued by an insurer that has become insolvent and which claim would be a covered claim if it were not a claim by or for the benefit of a reinsurer, insurer, insurance pool, or underwriting association may be filed directly with the receiver or the insolvent insurer; and

(B) In no event may any such claim be asserted in any legal action against the insured of such insolvent insurer.

(II) A first-party claim by an insured whose net worth exceeds ten million dollars on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer. An insured's net worth on such date includes the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis.

(III) Any claim for incurred but not reported losses; except that nothing in this subparagraph (III) affects any covered claims or rights under this part 5.

(5) "Insolvent insurer" means an insurer licensed to transact insurance business in this state, either at the time the policy was issued or when the insured event occurred, and against whom an order of liquidation with a finding of insolvency has been entered by a court of competent jurisdiction in the insurer's state of domicile or of this state and which order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order.

(6) "Member insurer" means any person who writes any kind of insurance to which this part 5 applies under section 10-4-504, including the exchange of reciprocal or interinsurance contracts, and who is licensed to transact insurance business in this state.

(7) "Net direct written premiums" means direct gross premiums written in this state on insurance policies to which this part 5 applies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. "Net direct written premiums" does not include premiums on contracts between insurers and reinsurers.

(8) "Person" means any individual, corporation, partnership, association, or voluntary organization.

Source: L. 71: p. 756, § 1. C.R.S. 1963: § 72-34-5. L. 77: (4) amended, p. 513, § 1, effective May 27. L. 79: (5) amended, p. 385, § 1, effective May 31. L. 99: (4) amended, p. 86, § 1, effective August 4. L. 2011: (4) amended, (HB 11-1041), ch. 14, p. 38, § 1, effective August 10.

ANNOTATION

"Covered claim" is a claim that should have been paid by the insurer pursuant to the policy but for the insurer's insolvency. Barr v. Colo. Ins. Guar. Ass'n, 926 P.2d 102 (Colo. App. 1995).

Statutory limit per claim depends on terms of policy. Directors' liability in failing to investigate borrower resulted in one collective claim under insurance policy, and CIGA was obligated to pay statutory limits for only one claim on behalf of insolvent insurer. Barr v. Colo. Ins. Guar. Ass'n, 926 P.2d 102 (Colo. App. 1995).