Colorado has enacted House Bill 1182, which, among other provisions, states that an insurer that uses a wildfire risk model, a catastrophe model, or scoring method to assign risk must provide the model or method to the Commissioner as part of a complete filing. The filing should include a description of the model, the impact of the model on rates, actuarial justification for all rating factors, mitigation discounts offered, and an explanation of the use of the model in underwriting decisions.

Additionally, the bill states that insurers using one of the models mentioned above or a combination of models must ensure that property-specific mitigation and community-level mitigation actions are being incorporated in such models or otherwise demonstrably included in their underwriting and pricing. If an insurer does not incorporate these mitigation actions into its models, they must provide discounts to policyholders who can demonstrate that these actions have been undertaken in sufficient proximity to the property. Insurers must also post on their public website information on premium discounts, incentives, or other premium adjustments available to policyholders who undertake property-specific mitigation or that can provide evidence of community-level mitigation.

The bill also provides information for an annual notice that insurers must provide to policyholders or applicants of the applicable mitigation discounts, wildfire risk score, and any other wildfire risk classification used to underwrite, nonrenew, price, create a rate differential, or surcharge the premium.

The bill applies only to homeowners insurance policies, property insurance policies covering residential condominium units, and multifamily residential housing policies.

Please see Colorado House Bill 1182 for more information.