Colorado § 10-4-512 - Nonduplication of recovery.

§ 10-4-512. Nonduplication of recovery.

(1) Any person having a claim against an insurer under any provision in any insurance policy that is also a covered claim shall exhaust first the person's right under such policy. Any amount payable on a covered claim under this part 5 is reduced by the amount recoverable under such insurance policy.

(2) Any person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured; except that, if it is a first-party claim for damage to property with a permanent location, recovery shall be sought from the association of the location of the property, and, if it is a workers' compensation claim, recovery shall be sought from the association of the residence of the claimant. A claimant or first-party insured who has received a recovery from any other guaranty association or its equivalent in an amount equal to or greater than the recovery allowed under this part 5 shall not be eligible to receive any recovery from the Colorado insurance guaranty association. In addition, any recovery under this part 5 shall be reduced by the amount of the recovery from any other insurance guaranty association or its equivalent.

Source: L. 71: p. 761, § 1. C.R.S. 1963: § 72-34-12. L. 89: (2) amended, p. 454, § 2, effective April 17. L. 90: (2) amended, p. 559, § 19, effective July 1. L. 99: (2) amended, p. 88, § 6, effective August 4. L. 2011: (1) amended, (HB 11-1041), ch. 14, p. 40, § 3, effective August 10.

ANNOTATION

Section implicitly provides Colorado insurance guaranty association (CIGA) with cause of action to enforce provision. The general assembly expressly provided for nonduplication of recovery to conserve CIGA's resources and impliedly intended to create private civil remedy for CIGA to enforce its right to reduce its payments to avoid duplication of recovery by insureds. The legislative goal of nonduplication of recovery would be substantially frustrated if CIGA lacked a civil remedy to enforce its statutory rights. Colo. Ins. Guar. Ass'n v. Menor, 166 P.3d 205 (Colo. App. 2007).

CIGA not required to intervene in defendant's earlier settlement proceedings with UM/UIM carrier in order to bring claim for offset under this section, and district court has subject matter jurisdiction to determine amount of CIGA's claimed offset, if any, allowed under this section and to apportion economic and noneconomic damages in defendant's settlement with UM/UIM carrier. Colo. Ins. Guar. Ass'n v. Menor, 166 P.3d 205 (Colo. App. 2007).

While CIGA, acting as worker's compensation insurer, does not have subrogation rights against UM/UIM insurance benefits under § 8-41-203, CIGA has claim for relief for nonduplication of recovery under this section with respect to any recovery by an injured party against his or her insurer that is also a covered claim under the Colorado Insurance Guaranty Association Act. Colo. Ins. Guar. Ass'n v. Menor, 166 P.3d 205 (Colo. App. 2007).

Claimant satisfied the statutory requirement that she must exhaust her rights against her insurer because she negotiated a settlement of slightly less than her policy limits for uninsured motorists, and was thus entitled to make a claim against the state insurance guaranty association for up to the difference between her policy limit and CIGA's statutory limit. Colo. Ins. Guaranty Assn. v. Harris, 815 P.2d 983 (Colo. App. 1991), aff'd, 827 P.2d 1139 (Colo. 1992).