I. Senate Bill 26-155 – The Enterprise

On June 4, 2026, Colorado Governor Jared Polis signed Senate Bill 26-155, “Concerning Increasing the Availability of Homeowner’s Insurance in the State.” (the Bill). The Bill adds a new Part 20 to Article 4 of Title 10 of the Colorado Revised Statutes, creating the “Strengthen Colorado Homes Enterprise” (the Enterprise) within the Colorado Division of Insurance. The Enterprise is structured as a “government-owned business” designed to assist homeowners in retrofitting residential property against extreme weather events, principally hail and windstorms. Importantly for carriers writing homeowner’s policies in Colorado, the Bill authorizes the Enterprise to administer and collect a new annual fee, effective beginning in calendar year 2027, equal to 0.5% of the total premium collected by the insurer on multiperil homeowner’s insurance policies issued in Colorado for the preceding calendar year.

II. The Fee

The Bill’s fee provision, codified at Colo. Rev. Stat. § 10-4-2003(4), directs that “[b]eginning in the 2027 calendar year, on or before a date determined by the enterprise board, and annually each calendar year thereafter on or before the same date, the enterprise board shall impose and collect a fee on each insurer in an amount equal to one-half of one percent of the total premium collected by the insurer on multiperil homeowner’s insurance policies issued in the state in the immediately preceding calendar year.” The fee is applicable to “insurer[s],” defined in the Bill as “admitted insurance company[ies] that offer multiperil homeowner’s insurance policies in the state and [are] subject to the Colorado Division of Insurance statistical report, line 4.” The Bill expressly excludes the Fair Access to Insurance Requirements (FAIR) Plan Association and definitionally excludes surplus lines insurers, who are not “admitted” in Colorado.

Two features of the fee are notable for insurers. First, the Bill prohibits passing the fee through to the insured. Per the Bill, “[e]ach insurer shall pay the fee to the enterprise and shall not surcharge the fee amount to policyholders.” Second, the fee is subject to a statutory ceiling of $100 million in the first five fiscal years (2027-2031). Per the Bill, the Enterprise “may lower the fee or cease collecting the fee in any calendar year to ensure that the total amount of fee revenue does not exceed one hundred million dollars over the first five fiscal years of the enterprise’s existence.” As such, it is possible that the fee rate may be adjusted downward in years following the initial assessment.

The Bill states that the fee is “reasonably related to the business services [Enterprise] is providing to insurers.” The Bill reasons that the fee revenue funds the Strengthen Colorado Homes Enterprise Grant Program, which awards grants to Colorado homeowners “to retrofit residential property to reduce insurer losses due to common perils, including hail and windstorms.” As such, the Bill intends to “reduce insurer losses and administrative expenses due to hail damage claims,” as well as provide a host of other related, homeowner-focused initiatives that will ultimately provide insurers with improved underwriting outcomes in the future.

Specifically, the Bill establishes that “at least eighty-five percent of fee revenue is allocated to grants to Colorado homeowners,” with the remainder available for, among other things, workforce training grants for the installation and certification of resilient roofs. The Bill defines a “resilient roof system” as “a roof that has obtained a verified wind and hail certification from the Insurance Institute for Business and Home Safety ‘FORTIFIED’ program or a similar science-based, verifiable certification, as determined by the board by rule.”

III. The Filing Requirement

In addition to the requirement to pay a fee, Section 2 of the Act amends Colo. Rev. Stat. § 10-4-405 [“Filing of Rate Information – Certain Coverages – Rules”] imposes a new annual filing obligation on admitted insurers. Per the Bill, “[n]o 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 submit an annual filing to the commissioner.” The filing must include an exhibit reporting “the number of policies in force,” “the number of homes that have installed a resilient roof system,” “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.”

Lastly, the Bill directs the Enterprise to conduct a study analyzing “the insurance risk in high-risk wildfire areas of the state,” including “the degree of market competition among insurers in those areas,” “the impact of a high-risk program on the potential losses in,” and “the availability of homeowner’s insurance in high-risk wildfire areas of the state.” The study must make recommendations regarding “the structure of a high-risk program, appropriate attachment points and caps, and ways to avoid competition with the private insurance market,” and must be conducted in consultation with stakeholders including reinsurers, representatives of insurers writing homeowner’s business in Colorado, and reinsurance brokers.

IV. Conclusion

As the dynamic homeowners’ insurance market in the United States continues to be an area where legislatures look for new ways to increase affordability and availability, Colorado is pulling a new lever. Where predecessor programs in other states have generally been financed through state-directed funding sources, Colorado is placing the cost on admitted insurers through a fee that cannot be surcharged to policyholders. Ultimately, the hope of the Colorado legislature is that by putting the proceeds from the fee directly back into improving the very risks subject to the fee, both insurer and insured will benefit.