Colorado Legislative Council Staff
NO FISCAL IMPACT
January 6, 1998
Senate Business Affairs
Will Meyer (866-4976)
TITLE: CONCERNING AN INCREASE IN THE LOSS RATIO STANDARD FOR CREDIT INSURANCE.
Summary of Assessment
The provisions of the bill would amend current statutory authority of the Commissioner of Insurance, Department of Regulatory Agencies, to disapprove any credit insurance policy if the benefits are not reasonable in relation to the premium charged. Reasonable is defined as a rate that may be expected to produce a ratio of incurred claims to earned premiums of not less than forty percent. This bill would increase that ratio to fifty-five percent. This bill would become effective upon signature of the Governor.
The provisions of this bill would affect the rate which credit insurance companies could charge for a policy providing a given benefit. This change would require the commissioner to rewrite a current regulation. This would have a minimal impact on the workload of the Division of Insurance, but may require re-prioritizing existing workload. This bill would not impact any other agency of the state, or unit of local government.