3 Colo. Code Regs. § 702-3-1-9-9
Current through Register Vol. 47, No. 24, December 25, 2024
Section 3 CCR 702-3-1-9-9 - Premium ReservesA. General 1. Unearned premium reserves are required for all contracts with respect to the period of coverage for which premiums, other than premiums paid in advance, have been paid beyond the date of valuation.2. If premiums due and unpaid are carried as an asset, such premiums must be treated as premiums in force, subject to unearned premium reserve determination. The value of unpaid commissions, premium taxes, and the cost of collection associated with due and unpaid premiums must be carried as an offsetting liability or as a reduction to the otherwise allowable asset.3. The gross premiums paid in advance for a period of coverage commencing after the next premium due date which follows the date of valuation may be appropriately discounted to the valuation date and shall be held either as a separate liability or as an addition to the unearned premium reserve which would otherwise be required as a minimum.B. Minimum Standards for Unearned Premium Reserves1. The minimum unearned premium reserve with respect to any contract is the pro rata unearned modal premium that applies to the premium period beyond the valuation date, with such premium determined on the basis of:a. The valuation net modal premium on the contract reserve basis applying to the contract; or b. The gross modal premium for the contract if no contract reserve applies.2. However, in no event may the sum of the unearned premium and contract reserves for any contract of the insurer subject to contract reserve requirements be less than the gross modal unearned premium reserve on any such contract, as of the date of valuation. In addition, such reserve shall never be less than the expected claims for the period beyond the valuation date represented by such unearned premium reserve, to the extent not provided for elsewhere.C. Premium Reserve Methods Generally The insurer may employ suitable approximations and estimates; including, but not limited to groupings, averages and aggregate estimation; in computing premium reserves. Such approximations or estimates should be tested periodically to determine their continuing adequacy and reliability.
37 CR 20, October 25,2014, effective 11/15/201437 CR 20, October 25,2014, effective 1/1/201537 CR 23, December 10, 2014, effective 1/1/201538 CR 17, September 10, 2015, effective 10/1/201539 CR 05, March 10, 2016, effective 4/1/201639 CR 14, July 25, 2016, effective 8/15/201639 CR 23, December 10, 2016, effective 1/1/201740 CR 03, February 10, 2017, effective 3/15/201740 CR 05, March 10, 2017, effective 4/1/201740 CR 13, July 10, 2017, effective 8/1/201740 CR 17, September 10, 2017, effective 11/1/201743 CR 06, March 25, 2020, effective 4/15/202044 CR 03, February 10, 2021, effective 3/15/202144 CR 23, December 10, 2021, effective 1/1/202246 CR 03, February 10, 2023, effective 3/2/2023