On
February 7th, Representative Garnett, with Senator Fenberg as the
Senate sponsor, introduced HB 20-1290, concerning the ability of an insurer to
use a failure-to-cooperate defense in an action in which the insured has made a
claim for insurance coverage.
If the bill were to pass, in order to plead or
prove a failure-to-cooperate defense in any action concerning first-party
insurance benefits, the following conditions must be met:
- The
carrier has submitted a written request for information the carrier seeks to
the insured or the insured’s representative, by certified mail;
- The
written request provides the insured 60 days to respond;
- The
information sought would be discoverable in litigation;
- The
written request provides citations to the specific policy language entitling
the carrier to the information requested.
A general statement of a duty to cooperate would be deemed insufficient.
- The
insured’s failure to cooperate had made the carrier’s performance under the
policy impossible;
- The carrier has given the insured an opportunity to cure, which must:
- Include the furnishing of written notice to the insured of the alleged failure to cooperate, describing with particularity the alleged failure, within 30 days of the alleged failure; and
- Allow the insured 60 days after receipt of the written notice to cure the alleged failure to cooperate.
House
Bill 1290 also states that the existence of a duty to cooperate in a policy
does not relieve an insurer of its duty to investigate or to comply with C.R.S. § 10-3-1104. Finally, the Bill states that any language in
a first-party insurance policy that conflicts with the Bill’s language is void
as against public Policy. If enacted,
the new law would apply to any litigation that occurs on or after the
applicable effective date of this act, estimated to be August 5, 2020, if the
Legislative adjournment sine die is on May 6, 2020. HB 20-1290 has been assigned to the House
Judiciary Committee and but is not yet scheduled for its first hearing in
committee.
For
additional information about House Bill 20-1290 or the Colorado legislative
session, you can reach Dave McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.
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