First Regular Session
Sixty-second General Assembly
LLS NO. 99-0888.01 Jane Brown HOUSE BILL 99-1361
STATE OF COLORADO
BY REPRESENTATIVES Kester, Young, Hoppe, Alexander, Coleman,
Johnson, Kaufman, King, Larson, Lee, McElhany, McKay, Smith,
Spradley, Stengel, Swenson, Webster; also Senator Hillman;
also SENATOR Hillman.
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
101 CONCERNING THE ISSUANCE OF CREDIT INSURANCE IN CONNECTION WITH
102 CREDIT TRANSACTIONS HAVING CERTAIN TERMS OF INDEBTEDNESS.
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
For purposes of credit insurance, defines the term "truncated
coverage" to mean credit insurance providing coverage for a period
shorter than the term of the indebtedness. States that the following must
be disclosed in writing whenever truncated coverage is elected by a
debtor:
The term of the credit insurance coverage;
That the insurance coverage will terminate before the
maturity date of the indebtedness.
States that credit insurance may be issued in connection with any
loan or other credit transaction. Current law limits such insurance to
transactions with a duration of not more than 10 years.
1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. 10-10-103, Colorado Revised Statutes, is amended
3 BY THE ADDITION OF A NEW SUBSECTION to read:
4 10-10-103. Definitions. As used in this article, unless the context
5 otherwise requires:
6 (7) "TRUNCATED COVERAGE" MEANS CREDIT INSURANCE
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
Page 2
1 COVERAGE THAT IS SHORTER THAN THE FULL TERM OF THE INDEBTEDNESS
2 REMAINING AT THE TIME SUCH COVERAGE IS ELECTED. "TRUNCATED
3 COVERAGE" DOES NOT INCLUDE CREDIT INSURANCE COVERAGE THAT
4 TERMINATES ON THE ATTAINMENT OF A SPECIFIED AGE.
5 SECTION 2. 10-10-104, Colorado Revised Statutes, is amended
6 to read:
7 10-10-104. Application of article. All insurance in connection
8 with loans or other credit transactions shall be subject to the provisions
9 of this article. except such insurance, as to which a credit service charge
10 or loan finance charge is imposed, in connection with a loan or other
11 credit transaction of more than ten years' duration. Insurance shall not be
12 subject to the provisions of this article where the issuance of such
13 insurance is an isolated transaction on the part of the insurer not related
14 to an agreement or a plan for insuring debtors of the creditor.
15 SECTION 3. Article 10 of title 10, Colorado Revised Statutes,
16 is amended BY THE ADDITION OF A NEW SECTION to read:
17 10-10-119. Truncated coverage. (1) EVERY DEBTOR ELECTING
18 TRUNCATED COVERAGE SHALL BE INFORMED IN WRITING AT THE TIME OF
19 SUCH ELECTION OF THE TERM OF THE INSURANCE COVERAGE AND THAT
20 SUCH COVERAGE WILL TERMINATE BEFORE THE SCHEDULED MATURITY
21 DATE OF THE INDEBTEDNESS.
22 (2) EVERY GROUP CERTIFICATE AND INDIVIDUAL POLICY
23 PROVIDING TRUNCATED COVERAGE SHALL DISCLOSE THE ITEMS SET FORTH
24 IN SUBSECTION (1) OF THIS SECTION IN PROMINENT TYPE ON THE FIRST
25 PAGE OF THE GROUP CERTIFICATE OR INDIVIDUAL POLICY.
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1 SECTION 4. Safety clause. The general assembly hereby finds,
2 determines, and declares that this act is necessary for the immediate
3 preservation of the public peace, health, and safety.