3 Colo. Code Regs. § 702-6-3-2-5

Current through Register Vol. 47, No. 7, April 10, 2024

Section 3 CCR 702-6-3-2-5 - Rule

A. Insurers and producers may be investigated without advance notice when the Division determines that an immediate investigation of the insurer's or producer's books, records or business practices is necessary for the protection of insurance consumers.

B. Selection of independent contractors to perform informal investigations

1. Pursuant to Section § 10-1-208, C.R.S., the Division may contract with a person, corporation or entity having technical or subject matter expertise or skill and experience in investigative techniques to perform informal investigations.

2. The contractor may be the same contractor that performed, or is performing, a financial or market conduct examination of an insurer or producer. If an informal investigation is conducted subsequent to, or simultaneously with, a financial or market conduct examination, the Division and the independent contractor shall execute a separate contract for the informal investigation. Payments to the contractor for the informal investigation are governed by this Regulation 6-3-2.

3. When determining whether to use independent contractors for informal investigations, the Division will consider whether it has sufficient available resources with sufficient technical expertise to perform the informal investigation. To the extent practicable the Division shall attempt to allocate Division employees possessing the necessary expertise, skill or experience to perform the informal investigation before using an independent contractor.

C. Travel requirements

In addition to fees, independent contractors shall be compensated for travel, meals and lodging in a manner that is reasonable and consistent with Colorado fiscal guidelines.

D. Appeal process for expenses and fees of independent contractors

1. Prior to an informal investigation, the Division shall provide the insurer or producer to be investigated with an estimate of costs, fees and/or expenses for the investigation.

2. Independent contractors conducting informal investigations are required to submit itemized invoices for fees and expenses to the Division for review and approval in accordance with guidelines maintained by the Division. After review and approval, the Division will forward the invoice to the insurer or producer for payment directly to the independent contractor.

3. Whenever an insurer or producer considers fees or expenses charged by an independent contractor to be unreasonable, the insurer or producer may contest the amount of fees and/or expenses charged by filing an appeal with the Commissioner within ten (10) calendar days after receipt of the independent contractor's billing from the Division. Such appeal must set forth the fees and/or expenses that are considered unreasonable and the basis for the claim. The insurer or producer shall simultaneously mail a copy of the appeal to the independent contractor. The Division shall also notify the independent contractor that an appeal has been filed.

4. The insurer or producer shall not delay payment of any non-contested fees and/or expenses pending the outcome of the appeal.

5. The independent contractor may respond to the appeal filed with the Commissioner, with a copy to the insurer or producer, no later than ten (10) calendar days after the date the Division notifies the independent contractor of the appeal. Failure to file a response shall not be considered an admission by the independent contractor of the allegations raised in the insurer's or producer's appeal. Insurers and producers may not file a reply to the independent contractor's response.

6. The Commissioner shall review the appeal from the insurer or producer and any independent contractor response within ten (10) calendar days after the last date for the independent contractor to file a response. The Commissioner shall notify the parties in writing of his or her findings.

7. If the Commissioner determines that some or all of the charges under dispute are reasonable and in accordance with the Division's guidelines, the insurer or producer shall promptly pay to the independent contractor all disputed charges approved by the Commissioner.

8. Disputed charges shall not be due until the Commissioner has reviewed the appeal and rendered written findings.

9. Undisputed charges shall be paid promptly and shall not be withheld pending the Commissioner's finding on disputed charges.

10. The Commissioner's written findings shall constitute a final agency action for purposes of judicial review pursuant to § 24-4-106, C.R.S.

3 CCR 702-6-3-2-5

38 CR 18, September 25, 2015, effective 10/15/2015

39 CR 01, January 10, 2016, effective 2/1/2016

40 CR 24, December 25, 2017, effective 1/14/2018

41 CR 08, April 25, 2018, effective 6/1/2018