Colorado Accident & Injury Law Part I
I. C.R.S. 10-3-1115 AND 10-3-1116 (HB 08-1407)
Penalties For Unreasonable Conduct Of Insurance Carriers
- C.R.S. 10-3-1115 Improper denial of claims
(1)(a) A PERSON ENGAGED IN THE BUSINESS OF INSURANCE SHALL NOT UNREASONABLY DELAY OR DENY PAYMENT OF A CLAIM FOR BENEFITS OWED TO OR ON BEHALF OF ANY FIRST-PARTY CLAIMANT.
- C.R.S. 10-3-1116 Remedies for unreasonable delay or denial of benefits. A first-party claimant as defined by section 10-3-1115, whose claim for payment or benefits has been unreasonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit.
“First-party claimant” means an individual, corporation, association, partnership, or other legal entity asserting an entitlement to benefits owed directly to or on behalf of an insured under an insurance policy. “First-party claimant” includes a public entity that has paid a claim for benefits due to an insurer’s
- Unreasonable delay or denial of the claim,
- C.R.S. 10-16-106.5 Prompt payment for claims:
A carrier that fails to pay, deny or settle a claim…. within ninety days after receiving the claim shall pay to the insured or health care provider, with proper assignment, a penalty in an amount equal to twenty percent of the total amount ultimately allowed on the claim. (It goes on to state that the penalty may be assessed in those claims brought under C.R.S. 10-3-1116.)
Discussion: These 2008 statutory changes give the person injured in an accident new claims that would not necessarily have been readily available before. Although the Colorado Courts have for the last quarter century recognized claims for breach of the covenant of good faith and fair dealing (bad faith claims), and those claims are not precluded by the new statutory provisions, there are now additional clearly delineated claims that can be brought against insurance carriers who do not timely and appropriately attempt settlement of claims for uninsured motorist benefits, med-pay claims and health insurance claims. It is fairly certain that, in the case of claims that are also covered under the Federal ERISA statute, 29 US Code Chapter 18, a conflict with Federal Court jurisdiction will arise. This issue will be left to future court decisions to reconcile and explain. There is hopeful thinking in the Colorado Trial Lawyers that the claims will be held valid under State law. Time will likely tell this.