(1) No insurer shall increase the premium unilaterally or decrease the coverage benefits
on renewal of a policy of insurance that provides coverages on commercial exposures
such as general comprehensive liability, municipal liability, automobile liability
and physical damage, fidelity and surety, fire and allied lines, inland marine, errors
and omissions, excess liability, products liability, police liability, professional
liability, or false arrest insurance unless the insurer mails by first-class mail
to the named insured, at the last address shown in the insurer's records, at least
forty-five days in advance a notice, accompanied by the reasons therefor, stating
the renewal terms and the amount of premium due. If the insurer fails to furnish the renewal terms and the statement of the amount
of premium due at least forty-five days prior to the expiration date of the policy,
the insurer shall automatically extend the existing policy for a period of forty-five
days and the premium for this extended period shall be prorated based on the premium
applicable to the existing policy. If the insurer fails to meet the requirements of this section prior to the expiration
date of the existing policy, the insurer shall be deemed to have renewed the insured's
policy for an identical policy period at the same terms, conditions, and premium as
the existing policy.
(2) A notice of a decrease in coverage benefits during the term of a policy of insurance
identified in subsection (1) of this section shall be valid only if it sets forth
the reason for the decrease and is based on one or more of the following reasons:
(a) Nonpayment of premium;
(b) A false statement knowingly made by the insured on the application for insurance;
(c) A substantial change in the exposure or risk other than that indicated in the
application and underwritten as of the effective date of the policy unless the insured
has notified the insurer of the change and the insurer accepts such change.
(3) This section shall not apply to insurance companies authorized to write surplus
line insurance in Colorado.
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