On July 6, 2021, Governor Polis signed Senate Bill (SB) 21-169 into law, which protects Colorado consumers from insurance practices that result in unfair discrimination on the basis of race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identify, or gender expression. The legislation holds insurers accountable for testing their big data systems - including external consumer data and information sources, algorithms, and predictive models - to ensure they are not unfairly discriminating against consumers on the basis of a protected class. SB21-169 requires insurers to take corrective action to address any consumer harms that are discovered.
The rapid expansion of big data has transformed insurance practices. While these tools have the potential to benefit both insurers and consumers by increasing efficiencies, the unchecked use of big data can unintentionally result in harm to Black, indigenous and people of color and other protected groups. SB21-169 requires insurers to demonstrate to the Division of Insurance (Division) how they are testing their data and tools to ensure they do not result in unfair discrimination.
Stakeholder Engagement Process
SB21-169 directs the Insurance Commissioner to work with stakeholders (insurance companies, insurance agents/producers, consumer representatives, and other interested parties) before adopting rules on how the companies should test and demonstrate to the Division that their use of big data is not unfairly discriminating against consumers. Separate stakeholder meetings will be held to address specific types of insurance (i.e., life, auto, health), as well as specific insurance practices (i.e., marketing, underwriting, claims management).
The Division has started the stakeholder engagement process, with a focus on the following line of insurance and insurance practice:
- Underwriting practices in life insurance: Life insurance policies are designed to pay money to a named beneficiary when a person dies, and can be an important part of a family’s long-term financial planning. Underwriting is the process by which an insurance company determines whether they offer life insurance coverage to an individual, and if so, what premium the company will charge, based on the company's assessment of that individual’s risk.
Division Seeking Comments on Upcoming Survey and Data Call for Life Insurers
The Division is seeking comments on a proposed upcoming survey and data call for life insurers. The following documents will be sent to a sampling of life insurance companies in the coming weeks, to collect information that will inform the development of future Division regulations.
- DRAFT Life Insurance Survey - Governance and Testing Processes for Unfair Discrimination - pdf file
- DRAFT Request for Data - Application Data for Life Insurance Policies - template
Please submit questions and comments on either document to DORA_Ins_RulesandRecords@state.co.us by July 22, 2022.
You can also contact Tara Smith (email@example.com) with questions about the submittal process, or additional assistance.
DRAFT Proposed Survey and Data Call Documents:
- DRAFT Life Insurance Survey - Governance and Testing Processes for Unfair Discrimination - Google form
Announcements of future meetings and other news related to the implementation of SB21-169 will be posted on this website, and shared via email notification. You can sign up to receive these and other DOI email notices on the Division's Sign-Up for Division of Insurance Email Lists webpage.