Regulation Of Claims Against Insurance Companies By Insured Parties

The bill states that if an insurer or an insured party requests an administrative hearing concerning an allegation that an insurer has breached the terms of an enforceable policy or other contract:

• The commissioner of insurance (commissioner) shall hold the hearing not later than 60 days after receiving the request;
• Neither the commissioner nor the division nor any administrative court may impose or require a fee of any party in association with the hearing;
• The commissioner shall conduct the hearing pursuant to the Colorado rules of procedure for small claims courts;
• The commissioner shall issue a ruling, and the ruling is not subject to appeal and does not prevent de novo judicial proceedings;
• If the commissioner determines, pursuant to the hearing, that the insurer has breached the terms of an enforceable policy or other contract, the commissioner may award treble damages and attorney fees to the insured party; and
• Any determination made by the commissioner, the division of insurance, or an administrative law judge pursuant to the hearing is admissible as evidence in any subsequent civil action.

The bill states that in any civil action in which a plaintiff claims that an insurer wrongfully denied a claim submitted by the plaintiff pursuant to an enforceable policy issued by the insurer to the plaintiff:

• The court shall not charge the plaintiff any fee to recover costs associated with a jury trial; and
• The defendant insurer may not file a motion for summary judgment, a directed verdict, a judgment on the pleadings, or any other alternative outcome if the plaintiff has requested a jury trial.

The bill states that in any civil action in which the trier of fact determines that an insurer wrongfully denied a claim submitted by a plaintiff pursuant to an enforceable policy issued by the insurer to the plaintiff, that the insurer denied the claim in bad faith, and that the plaintiff suffered damages as a result of the wrongful denial, the court shall award treble damages, court costs, and attorney fees to the plaintiff.

The bill states that it is an unfair method of competition and an unfair or deceptive act or practice in the business of insurance for an insurer to unilaterally change or cancel, or attempt to unilaterally change or cancel, the terms of a prepaid policy of insurance until the policy is due for renewal.

(Note: This summary applies to this bill as introduced.)