(1) (a) There is hereby authorized the creation of entities to be known as health-care coverage cooperatives. A health-care coverage cooperative may be created as any lawful entity under articles 55, 56, 58, 101 to 117, or 121 to 137 of title 7, C.R.S., so long as such entity operates for the mutual benefit of its members. Entities created pursuant to this part 10, in addition to the matters otherwise required, are subject to this part 10.
(b) Each cooperative shall follow the organizational requirements and corporate governance requirements of its statutory incorporation and, in addition, shall provide internal procedures that comply with section 10-16-1009.
(2) (a) (I) A cooperative organized on or after August 4, 2004, for the purposes of securing health-care coverage for its members and their eligible employees shall file articles of organization with the secretary of state and shall provide a copy of such articles to the commissioner in such form as the secretary and the commissioner may require consistent with this part 10 and title 7, C.R.S.
(II) For cooperatives formed prior to August 4, 2004, the executive director of the department of health care policy and financing shall provide the commissioner with such cooperatives' articles of organization.
(b) Any person or entity operating or holding itself out as a cooperative shall apply for and obtain a certificate of authority to operate as a cooperative pursuant to sections 10-16-1005 and 10-16-1006.
(c) No individual or entity that organizes a cooperative may become or attempt to become a person with financial interest in the cooperative's business for a period of three years after organization of the cooperative.
(3) (a) A cooperative is organized when the articles of organization are filed with the secretary of state or, if a delayed effective date is specified in the articles as filed with the secretary of state and a certificate of withdrawal is not filed, on such delayed effective date. The existence of the cooperative begins upon organization; except that no cooperative shall secure health-care coverage for its members until a certificate of authority has been issued by the commissioner pursuant to section 10-16-1005 (1).
(b) Except in a proceeding by the state to cancel or revoke the organization of, or involuntarily dissolve, the cooperative, the secretary of state's filing of the articles of organization shall be conclusive and irrefutable proof that all conditions precedent to organization have been met.
(4) Each cooperative shall file a report pursuant to section 7-136-107, C.R.S., and pay the required fee, which shall be determined and collected pursuant to section 24-21-104 (3), C.R.S., in lieu of all franchise or corporation license taxes.
(5) (a) Except as allowed by section 10-16-1014 or subsection (5)(b) of this section, the division of insurance shall not participate in the formation or administration of a health-care coverage cooperative created pursuant to this part 10.
(b) The commissioner may provide technical assistance in the formation of a cooperative created pursuant to this part 10 so long as the cooperative is not formed or administered by the commissioner as an entity or instrumentality of the state.
Source: L. 2004: Entire part added, p. 996, � 14, effective August 4. L. 2011: (1)(a) amended, (SB 11-191), ch. 197, p. 820, � 4, effective April 2, 2012. L. 2019: (5) amended, (SB 19-004), ch. 205, p. 2192, � 5, effective August 2.
Cross references: For the legislative declaration in SB 19-004, see section 1 of chapter 205, Session Laws of Colorado 2019.
10-16-1005. Issuance of certificate of authority by commissioner for cooperative to purchase health-care coverage. (1) (a) (I) (A) On and after August 4, 2004, an unlicensed cooperative conducting business pursuant to this part 10 shall file an application with the commissioner for issuance of a certificate of authority to purchase health-care coverage for members and their eligible employees. An application shall include the following information: The name of the cooperative and any agent for service of process; details concerning provisions to govern the business and affairs of the cooperative, including management and organizational structure; an affidavit signed under oath by an officer of the organization that the cooperative is in compliance with sections 10-16-1004 (2)(c) and 10-16-1008 (3); and the names of managing personnel of the cooperative. The commissioner shall grant a certificate of authority to an applicant under this section unless the application fails to comply with this part 10. The commissioner shall establish an application filing fee, not to exceed one thousand one hundred dollars, to recover the direct costs of the commissioner in conducting the review required by this section. Each cooperative issued a certificate of authority pursuant to this section shall annually submit such information as the commissioner may reasonably require to determine that a cooperative continues to be in compliance with the provisions of this part 10. The commissioner shall establish a fee, not to exceed one thousand one hundred dollars annually, to recover the direct costs of the commissioner in determining annually that a cooperative is in compliance with the provisions of this part 10.
(B) Except as provided in section 10-16-1004 (3)(b), no cooperative shall take any action enumerated in section 10-16-1009 unless a certificate of authority has been issued pursuant to this section by the commissioner. Any person or entity applying to obtain a certificate of authority as required by section 10-16-1004 (2)(b) that fails to obtain a certificate of authority by December 1, 2004, shall cease to engage in any activity for which a certificate of authority is required pursuant to this part 10 until a certificate of authority is issued by the commissioner pursuant to this section and section 10-16-1006.
(C) Cooperatives that have been issued a certificate of authority by the executive director of the department of health care policy and financing prior to August 4, 2004, shall submit proof of such certificate of authority to the commissioner prior to November 1, 2004. The commissioner shall reissue a certificate of authority to the cooperative on or before December 1, 2004.
(II) A cooperative shall be required to post a fidelity or employee dishonesty bond or deposit with the commissioner a certificate of deposit or securities in a minimum amount equal to at least two months' premiums held by the cooperative or its administrator as of its annual renewal date in order to be granted a certificate of authority under this section. If a cooperative contracts with an outside administrator for all premium-handling functions, the cooperative itself will not be required to post a bond in order to comply with the provisions of this subparagraph (II) so long as the cooperative submits to the commissioner evidence that such administrator has obtained a bond in the required amount.
(b) The commissioner may grant a temporary certificate of authority to any cooperative. Any such temporary certificate of authority shall be valid for a period of one year after the date of issuance.
(c) Notwithstanding the provisions of part 2 of article 72 of title 24, C.R.S., an application, together with any supporting material and responses from the commissioner, shall not be considered a public record until the commissioner approves the application or until an organizer requests a hearing on the commissioner's denial of the application.
(2) The commissioner shall respond in writing to each application for a certificate of authority within thirty days after receipt by the commissioner. The commissioner shall either approve the application or shall inform the organizers of specific changes to the application that the commissioner deems necessary for approval under this part 10. Each applicant shall respond to the commissioner's comments within thirty days after receipt. The commissioner shall either approve the application within thirty days after receipt of such changes or request additional changes to the application. The time limits contained in this subsection (2) shall apply to all phases of the application process except hearings conducted pursuant to article 4 of title 24, C.R.S.
Source: L. 2004: Entire part added, p. 997, � 14, effective August 4.
10-16-1006. Authority to deny application for, revoke, or suspend certificate of authority. (1) On and after August 4, 2004, the commissioner may deny an application for a certificate of authority pursuant to section 10-16-1005 or revoke or suspend a certificate of authority of any cooperative found to be in violation of this part 10.
(2) (a) Any party may request a hearing pursuant to article 4 of title 24, C.R.S., on any action of the commissioner denying an application for a certificate of authority or revoking or suspending a certificate of authority.
(b) Any hearing conducted under this section shall be conducted pursuant to article 4 of title 24, C.R.S., and section 10-1-127, and the commissioner may use the services of an administrative law judge appointed pursuant to part 10 of article 30 of title 24, C.R.S.
(c) Any final decision of the commissioner under this part 10 shall be subject to judicial review by the court of appeals pursuant to section 24-4-106 (11), C.R.S.
Source: L. 2004: Entire part added, p. 999, � 14, effective August 4.