Committee backs technical fixes to Colorado Fair Plan, sends bill to Committee of the Whole

The Senate Business, Labor and Technology Committee voted unanimously on Oct. 12 to send House Bill 1205 to the Committee of the Whole with a favorable recommendation and to place the bill on the consent calendar.

The bill makes technical clarifications to the Colorado Fair Plan — a residual market created in 2023 to provide last-resort property insurance for high-risk residential and commercial properties — clarifying that the plan is not a department or an insurance company and spelling out consumer remedies and legal protections for volunteer board members.

Senator Roberts, the bill sponsor, told the committee the changes are intended to support the plan’s implementation this spring and to make clear how the plan fits into existing insurance law. A technical amendment (L003) recommended by the Division of Insurance and explained by Roberts was adopted without objection.

Kelly Campbell, executive director of the Colorado Fair Plan, testified in support and described the plan as a “safety net” for property owners in a catastrophe-prone state. “We are the residual market mechanism,” Campbell said, drawing a distinction between the Fair Plan and a standard insurance company. She said the Fair Plan will rely on an assessment mechanism among private insurers rather than on the state’s solvency rules and that volunteer board members appointed by the governor need statutory immunity for their service.

Campbell also addressed readiness to handle claims once policies are issued. She said the plan has considered anticipated annual losses in its initial capital assessment and that “as soon as we take on policyholders, we're going to be prepared and ready to pay those claims.” She added that applicants will have to show they were declined by the admitted market before enrolling and that policies may be renewed for up to three cycles (three years) before requalification is required.

Senator Catlin asked about the distinction between an insurance company and a residual market; Campbell explained differences in solvency and capital requirements, appointment of agents, and entry barriers for applicants. The committee adopted the technical amendment specifying which sections of the insurance code apply to the Fair Plan and then approved the bill by voice vote. The committee chair announced the bill had passed unanimously and would be placed on the consent calendar.

The measure now proceeds to the Committee of the Whole. The Fair Plan’s enabling statute was established in 2023 and the Division of Insurance provided the amendment language the committee adopted.