House Bill 25-1182 Introduced

A Bill for an Act

• Page 1, Line 101Concerning tools to assess risk for the purpose of

• Page 1, Line 102underwriting property insurance policies.

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)

For the purposes of underwriting homeowners and other property insurance policies, the bill requires insurers who use a wildfire risk model, a catastrophe model, a combination of models, or a scoring method to adhere to specific requirements that concern the sharing of information with the commissioner of insurance and the public, the inclusion of specific activities in the models, and providing notices to policyholders.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, add 10-4-124 as follows:

• Page 2, Line 310-4-124.  Homeowner's insurance - underwriting - wildfire

• Page 2, Line 4risk models - requirements - definitions - rules. (1)  As used in this section, unless the context otherwise requires:

• Page 2, Line 5(a)  "Catastrophe model" means a tool, instrumentality,

• Page 2, Line 6means, or product, including a map-based tool, a computer-based

• Page 2, Line 7tool, or a simulation that is used by an insurer or a reinsurer to estimate potential losses from catastrophic events.

• Page 2, Line 8(b)  "Wildfire risk model" means a tool, instrumentality,

• Page 2, Line 9means, or product, including a map-based tool, a computer-based

• Page 2, Line 10tool, or a simulation, that is used by an insurer or a reinsurer,

• Page 2, Line 11in whole or in part, to measure or assess the wildfire risk

• Page 2, Line 12associated with a residential or commercial property or

• Page 2, Line 13community for purposes of rating, classifying, or pricing based

• Page 2, Line 14on wildfire risk or estimating risks or losses corresponding to the wildfire risk classifications.

• Page 2, Line 15(2)  An insurer or reinsurer that uses a wildfire risk model

• Page 2, Line 16or a catastrophe model or scoring method to assign risk shall

• Page 2, Line 17provide the wildfire risk model, catastrophe model, or scoring

• Page 2, Line 18method used to assign risk, including a description of the model,

• Page 2, Line 19the impact of the model on rates, and an explanation of the use

• Page 2, Line 20of the model in underwriting decisions, to the commissioner as

• Page 2, Line 21part of the insurer's complete filing.

• Page 3, Line 1(3)  An insurer or reinsurer that uses a wildfire risk

• Page 3, Line 2model, a catastrophe model, or a combination of models shall

• Page 3, Line 3ensure that a wildfire risk model, catastrophe model, or the combination of models incorporates:

• Page 3, Line 4(a)  Property-specific mitigation actions such as

• Page 3, Line 5establishing defensible space, incorporating building hardening

• Page 3, Line 6measures, or receiving certification from an entity with expertise in mitigation of properties against wildfire;

• Page 3, Line 7(b)  Community-level mitigation activities or designations; and

• Page 3, Line 8(c)  State-level activities to address wildfire risk, including the purchase of equipment to combat wildfires.

• Page 3, Line 9(4)  An insurer shall post on its public website readily

• Page 3, Line 10accessible information on the premium discounts, incentives, or

• Page 3, Line 11other premium adjustments that are available to policyholders

• Page 3, Line 12who undertake specified mitigation efforts and the process for

• Page 3, Line 13appealing a wildfire risk score. The website shall identify, as applicable:

• Page 3, Line 14(a)  Wildfire risk mitigation actions for the policyholder

• Page 3, Line 15to undertake that would result in a discount, incentive, or other premium adjustment; and

• Page 3, Line 16(b)  The amount of the discount, incentive, or other

• Page 3, Line 17premium adjustment associated with each wildfire risk mitigation action.

• Page 3, Line 18(5) (a)  An insurer that uses a wildfire risk model or risk

• Page 3, Line 19score to underwrite, nonrenew, price, create a rate differential,

• Page 3, Line 20or surcharge the premium based upon the policyholder's or

• Page 4, Line 1applicant's wildfire risk shall provide an annual written notice

• Page 4, Line 2to each policyholder or applicant upon application for property

• Page 4, Line 3insurance of the wildfire risk score and any other wildfire risk

• Page 4, Line 4classification used by the insurer to underwrite, nonrenew,

• Page 4, Line 5price, create a rate differential, or surcharge the premium based upon the policyholder's or applicant's wildfire risk.

• Page 4, Line 6(b)  The notice shall include:

• Page 4, Line 7(I)  A plain-language explanation of the wildfire risk score or other wildfire risk classification;

• Page 4, Line 8(II)  The range of the scores or classifications that could potentially be assigned to the property;

• Page 4, Line 9(III)  The relative position of the score or classification

• Page 4, Line 10assigned to the property within that range of possible scores or classifications;

• Page 4, Line 11(IV)  The impact of the score or classification on the rate or premium;

• Page 4, Line 12(V)  A written explanation of why the policyholder or

• Page 4, Line 13applicant received the assigned score or classification that

• Page 4, Line 14identifies the specific features of the property that influenced the assignment of the score or classification; and

• Page 4, Line 15(VI)  The impact, if any, that each wildfire risk mitigation

• Page 4, Line 16action could have on a wildfire risk score or classification assigned to the property.

• Page 4, Line 17(6)  The insurer shall provide the wildfire risk score or classification to the policyholder or applicant:

• Page 4, Line 18(a)  For applicants, no later than fifteen days after the

• Page 4, Line 19submission of the applicant's completed application to the insurer;

• Page 5, Line 1(b)  For policyholders, at least sixty days before a renewal of a policy;

• Page 5, Line 2(c)  For policyholders, at least ninety days before a nonrenewal of a policy; and

• Page 5, Line 3(d)  For a policyholder or applicant, if the policyholder or

• Page 5, Line 4applicant has completed a mitigation measure on the property

• Page 5, Line 5since the time of the last application to or renewal by the

• Page 5, Line 6insurer, no later than thirty days after the submission to the

• Page 5, Line 7insurer of the policyholder's or applicant's request that the

• Page 5, Line 8insurer provide a revised wildfire risk score or wildfire risk classification.

• Page 5, Line 9(7)  A policyholder or applicant for a policy of property

• Page 5, Line 10insurance who disagrees with the wildfire risk score, or with

• Page 5, Line 11any other wildfire risk classification assigned to the

• Page 5, Line 12policyholder's or applicant's property, may appeal the score

• Page 5, Line 13directly to the insurer. The insurer shall notify the

• Page 5, Line 14policyholder or applicant in writing of the right to appeal the

• Page 5, Line 15wildfire risk score or other wildfire risk classification when the

• Page 5, Line 16score or classification is provided to the policyholder or

• Page 5, Line 17applicant as required by subsection (5) of this section. If the

• Page 5, Line 18policyholder or applicant appeals the wildfire risk score or

• Page 5, Line 19other wildfire risk classification, the insurer shall

• Page 5, Line 20acknowledge receipt of the appeal in writing within ten

• Page 5, Line 21calendar days after receipt of the appeal. The insurer shall

• Page 5, Line 22respond to the appeal in writing with a reconsideration and

• Page 5, Line 23decision within thirty calendar days after receiving the appeal.

• Page 6, Line 1If an appeal is denied, the insurer shall, upon request by the

• Page 6, Line 2commissioner, forward a copy of the appeal and the insurer's response, to the commissioner.

• Page 6, Line 3(8)  The commissioner may adopt rules to implement this section.

• Page 6, Line 4SECTION 2.  Act subject to petition - effective date -

• Page 6, Line 5applicability. (1)  This act takes effect January 1, 2026; except that, if a

• Page 6, Line 6referendum petition is filed pursuant to section 1 (3) of article V of the

• Page 6, Line 7state constitution against this act or an item, section, or part of this act

• Page 6, Line 8within the ninety-day period after final adjournment of the general

• Page 6, Line 9assembly, then the act, item, section, or part will not take effect unless

• Page 6, Line 10approved by the people at the general election to be held in November

• Page 6, Line 112026 and, in such case, will take effect January 1, 2026, or on the date of

• Page 6, Line 12the official declaration of the vote thereon by the governor, whichever is later.

• Page 6, Line 13(2)  This act applies to property insurance policies issued or renewed on or after the applicable effective date of this act.