(1) To plead or prove a failure-to-cooperate defense in an action concerning an insurance policy providing first-party benefits or coverage, each of the following conditions must be met before the defense is asserted in a court of law or an arbitration:
(a) The insurer has submitted a written request to the insured or the insured's representative for the information the insurer seeks via:
Electronic means if the insured or the insured's representative has consented to receive electronic documents from the insurer; or
Certified mail;
The information is not available to the insurer without the assistance of the insured;
The written request provides the insured sixty days to respond;
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 insurer gives 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 sixty days after the alleged failure; and
Allow the insured sixty days after receipt of the written notice to cure the allegedfailure to cooperate.
A failure-to-cooperate defense acts as a defense to the portion of the claim materiallyand substantially prejudiced to the extent the insurer could not evaluate or pay that portion of the claim.
The existence of a duty to cooperate in a policy does not relieve the insurer of itsduty to investigate or to comply with section 10-3-1104.
Any language in a first-party policy that conflicts with this section is void as againstthe public policy of Colorado.
An insurer is not liable for a claim in a civil action based upon a bad-faith breach ofcontract under common law or under sections 10-3-1115 and 10-3-1116 because the insurer solely provides the insured with the required amount of time:
To respond to the insurer's written request as specified under subsection (1)(c) of thissection; and
To cure the alleged failure to cooperate as specified under subsection (1)(e) of thissection.
Source: L. 2020: Entire section added, (HB 20-1290), ch. 229, p. 1116, § 1, effective September 14.
Editor's note: Section 2 of chapter 229 (HB 20-1290), Session Laws of Colorado 2020, provides that the act adding this section applies to litigation that occurs on or after September 14, 2020.