Colorado § 10-1-101 - Legislative declaration.

§ 10-1-101. Legislative declaration.

The general assembly finds and declares that the purpose of this title is to promote the public welfare by regulating insurance to the end that insurance rates shall not be excessive, inadequate, or unfairly discriminatory, to give consumers thereof the greatest choice of policies at the most reasonable cost possible, to permit and encourage open competition between insurers on a sound financial basis, and to avoid regulation of insurance rates except under circumstances specifically authorized under the provisions of this title. Such policy requires that all persons having to do with insurance services to the public be at all times actuated by good faith in everything pertaining thereto, abstain from deceptive or misleading practices, and keep, observe, and practice the principles of law and equity in all matters pertaining to such business.

Source: L. 2003: Entire article RC&RE, p. 587, § 1, effective July 1.

Editor's note: This section is similar to former § 10-1-101 as it existed prior to 2002.

ANNOTATION

Law reviews. For article, "The Past, Present, and Future of Residential Construction Defect Action Reform in Colorado", see 54 Colo. Law. 28 (Jan.-Feb. 2025).

Annotator's note. Since § 10-1-101 is similar to § 10-1-101 as it existed prior to the 2002 repeal of article 1 of title 10, relevant cases construing that provision have been included in the annotations to this section.

Insurance commissioner's authority is broad and necessarily includes the authority to determine whether an insurance company has acted in bad faith. Hartford Fire Ins. Co. v. Colo. Div. of Ins., 824 P.2d 76 (Colo. App. 1991).

Concept of insurance bad faith claim applies outside only the cancellation or claims settings. The nature of the relationship created by the insurance contract, rather than the activity involved, determines whether the duty of good faith and fair dealing exists. The duty, as formulated by the general assembly in this section, is a broad and wide-ranging one. Ballow v. PHICO Ins. Co., 875 P.2d 1354 (Colo. 1993).

A third-party administrator owes a duty of good faith to an insured when a special relationship exists between the third-party administrator and the insured. A special relationship is created when the administrator has primary control over benefit determinations; assumes some of the insurance risk of loss; undertakes many of the obligations and risks of an insurer; and has the power, motive, and opportunity to act unscrupulously in the investigation and servicing of the insurance claims. To establish a breach of this duty of good faith, the plaintiff must establish that the third-party administrator's conduct was unreasonable and that the administrator knew its conduct was unreasonable or acted in a reckless disregard of whether its conduct was unreasonable. Cary v. United of Omaha Life Ins. Co., 68 P.3d 462 (Colo. 2003).

Insurer did not engage in bad faith where policy informed customers that purchase of UM/UIM coverage provided UM/UIM coverage for all class one and class two insureds in all vehicles. An offer that includes accurate information about additional benefits provided is sufficient, and those benefits do not need to be specifically identified as additional benefits. Mullen v. Allstate Ins. Co., 232 P.3d 168 (Colo. App. 2009).