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 (e.g., life, auto, health), as well as specific insurance practices (e.g., marketing, underwriting, claims management).
The Division has started the stakeholder engagement process for the following line of insurance and insurance practice:
- Life Insurance Underwriting: Life insurance is 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 to offer 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.
- Private Passenger Auto Insurance Underwriting: Auto insurance is important because it provides financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle. It is also a legal requirement for operating a vehicle. Underwriting is the process by which an insurance company determines whether to offer 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.
Life Insurance Underwriting
Stakeholder Meetings
The Division has hosted a series of life insurance underwriting stakeholder meetings, starting in February 2022, and continuing through 2024. Past meeting materials related to life insurance underwriting can be accessed by clicking on the button below:
DRAFT Proposed Regulations
The Division released a DRAFT PROPOSED Algorithm and Predictive Model Quantitative Testing Regulation for informal comments. All interested stakeholders - including insurance companies, insurance agents/producers, consumer representatives, and other interested parties - are invited to submit written informal comments on this draft regulation by October 26, 2023.
Informal comments should be submitted to DORA_INS_RulesandRecords@state.co.us. Please note, stakeholders will have additional opportunities to submit written and oral comments to the Division.:
DRAFT PROPOSED Algorithm and Predictive Model Quantitative Testing Regulation
Quantitative Testing Regulation - Informal Comments
Adopted Regulations
Private Passenger Auto Insurance Underwriting
Stakeholder meetings
The Division has hosted a series of private passenger auto insurance underwriting stakeholder meetings, starting in April 2023, and continuing through 2024. Past meeting materials related to private passenger auto insurance underwriting can be accessed by clicking on the button below:
DRAFT Proposed Regulations
At the November 2, 2023 stakeholder meeting, the Division discussed governance and risk management framework requirements related to private passenger auto (PPA) insurance, and invited stakeholder to provide comments on the applicability of the Division's Regulation 10-1-1 Governance and Risk Management Framework Requirements for Life Insurers' Use of External Consumer Data and Information Sources, Algorithms, and Predictive Models to private passenger auto insurance. The comments received can be accessed by clicking on the button below.
PPA Governance and Risk Management Framework - Informal Comments
Health Insurance
Stakeholder Meetings
The Division will be hosting a stakeholder meeting regarding Unfair Discrimination in Insurance Practices, focusing on health insurance, on April 2, 2024 from 10:00 - 11:00 am MDT. At a previous stakeholder meeting on February 29, 2024, the Division requested stakeholders submit written feedback on: (1) the applicability of Regulation 10-1-1 Governance and Risk Management Framework Requirements for Life Insurers' Use of External Consumer Data and Information Sources, Algorithms, and Predictive Models to comprehensive major medical insurance; and (2) which health insurance practice the Division should initially focus on for developing quantitative testing requirements. At the upcoming April 2, 2024 stakeholder meeting, the Division will provide an overview of Regulation 10-1-1 and discuss the stakeholder comments received. All stakeholders are welcome to submit written comments to DORA_INS_RulesandRecords@state.co.us by March 29, 2024.
All interested stakeholders - including insurance companies, insurance agents/producers, consumer representatives, and other interested parties - can register for the April 2 meeting, and access previous stakeholder meeting materials, by clicking on the buttons below:
Request for Comments
At the February 29, 2024 stakeholder meeting, the Division asked for stakeholder feedback on the following items:
- The applicability of the Division's Regulation 10-1-1 Governance and Risk Management Framework Requirements for Life Insurers' Use of External Consumer Data and Information Sources, Algorithms, and Predictive Models to health insurance; and
- Suggestions regarding the insurance practice(s) that the Division should initially focus for quantitative testing for major medical health insurance.
Comments on either or both topics should be sent to DORA_INS_RulesandRecords@state.co.us by March 29, 2024.
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. For notices specific to SB21-169, click on the "Subscribe to DOI/DORA Email Lists via GovDelivery" button, and select the checkbox next to "External Consumer Data and Unfair Discrimination in Insurance Practices" list.
For additional information about the Division's implementation of SB21-169, please contact Jason Lapham (jason.lapham@state.co.us).