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HB20-1290

Failure-to-cooperate Defense First-party Insurance

Concerning the ability of an insurer to use a failure-to-cooperate defense in an action in which the insured has made a claim under insurance coverage for an incident.
Session:
2020 Regular Session
Subjects:
Courts & Judicial
Insurance
Bill Summary

The bill bars an insurer from using a failure-to-cooperate defense in an action unless:

  • The insurer has submitted a written request to the insured or the insured's representative for information the insurer deems necessary for litigation for the information ;
  • The information necessary for litigation is not available to the insurer without the assistance of the insured;
  • The request provides the insured 60 days to respond;
  • The request is for information the insurer would be entitled to in litigation; The written request is for information a reasonable person would determine the insurer needs to adjust the claim filed by the insured or to prevent fraud; and
  • The request cites the specific policy language that entitles the insurer to the information necessary to any lawsuit;
  • The insured's failure to cooperate has rendered performance by the insurer under the policy impossible; and
  • The insurer gives the insured an opportunity to cure within 60 days and provides notice to the insured within 30 60 days, describing, with particularity, the alleged failure to cooperate.

The alleged failure to cooperate must materially and substantially prejudice the portion of the claim for which the defense is asserted. A failure to cooperate defense acts as a defense to the portion of the claim that is materially and substantially prejudiced to the extent the insurer could not evaluate or pay that portion of the claim. Any language in an insurance contract that conflicts with the bill is void. If an insurer is giving the insured the time to respond or cure under the bill, the insurer cannot be held liable for failing to pay the claim in a timely manner.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Status

Introduced
Passed

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Bill Text

Sponsors

Sponsor Type Legislators
Prime Sponsor

Rep. A. Garnett
Sen. S. Fenberg

Sponsor

Co-sponsor

Rep. E. Hooton
Sen. D. Moreno, Sen. B. Pettersen