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.
