Increase Access Homeowner's Insurance Enterprise

     The bill creates the strengthen Colorado homes enterprise (enterprise), which is a government-owned business created in the division of insurance (division) in the department of regulatory agencies. The enterprise is governed by a 7-member board (board), including the commissioner of insurance (commissioner), or their designee; members with expertise in home hardening, and resilient roof systems, and insurance underwriting or actuarial analysis ; and members representing the interests of insurance companies, consumers, and counties.

     The primary purpose of the enterprise is to impose and collect an annual fee (fee) from an admitted or authorized insurance company that offers multiperil homeowner's insurance policies in the state (insurer) to reduce risks and losses to insurers that pay the fee by using fee revenue to provide grants to homeowners (grants) to defray the cost of retrofitting residential property by purchasing and installing resilient roof systems. At least 90% of the fee revenue must be used for installing resilient roof systems. In awarding grants, the board shall prioritize homes that are the homeowner applicant's (applicant) primary residence and shall consider other criteria, including applicant income, the age of the roof, the size of the home, the number of grant applicants, whether the home is in a locality with hail-resistant building codes, and whether the applicant lives in a location that has historically had a higher susceptibility to extreme weather events. In order to ensure the necessary workforce, fee revenue may also be used to award grants to defray the costs of training and certification related to installing and certifying resilient roof systems. A contractor that is awarded bids and receives money from a grant is prohibited from waiving homeowner's insurance deductibles.

     In addition, fee revenue shall be used for contracting with the division to conduct or contract for a study to analyze insurance risk in high-risk wildfire areas of the state, including an analysis of market competition in those areas and the impact of a high risk program on the potential losses and the availability of homeowner's insurance in those areas. The division or a person contracted by the division to conduct the study shall engage with relevant stakeholders that include, at a minimum, representatives of reinsurers and reinsurance brokers, insurers writing homeowner's insurance contracts or policies in Colorado, individuals with expertise in complex financial instruments and debt instruments, and consumers or other individuals with expertise in wildfire mitigation. The division shall send the study to committees of the general assembly.

     Beginning in the 2027 calendar year, the amount of the insurer fee imposed and collected by the enterprise is an amount equal to 0.5% of the total premium collected by an insurer on multiperil homeowner's insurance policies in the state in the immediately preceding calender year. The insurer shall not surcharge the fee amount to policyholders. The enterprise may lower or cease collecting the fee from an insurer in any calendar year if the commissioner determines that the insurer paying the fee would become insolvent and notifies the board to ensure that total fee revenue does not exceed $100 million in the first 5 years of the enterprise's existence.

     The board shall adopt rules and policies for the regulation of the enterprise's affairs and the conduct of enterprise business, including standards for resilient roof systems and standards for contractor-specialized training in the installation of impact-resistant roof systems.

      Beginning with rate filings submitted on and after No sooner than January 1, 2027, and upon the commissioner adopting rules, an insurer offering multiperil homeowner's insurance for property or risks located in the state shall demonstrate in the insurer's rate filings that savings from the installation of resilient roof systems are passed through to homeowners through the application of discounts or reduced premiums on homeowner's insurance policies submit an annual filing to the commissioner that includes the number of policies in force, the number of homes that have installed resilient roof systems, the discount applied to homes due to the presence of a resilient roof system, and the wind and hail claims frequency and severity for homes with and without a resilient roof system .

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)