§ 10-3-1113 — Information to trier of fact in civil actions

(1) In any civil action
for damages founded upon contract, or tort, or both against an insurance company,
the trier of fact may be instructed that the insurer owes its insured the duty of good
faith and fair dealing, which duty is breached if the insurer delays or denies
payment without a reasonable basis for its delay or denial.

(2) Under a policy of liability insurance, the determination of whether the
insurer's delay or denial was reasonable shall be based on whether the insurer's
delay or denial was negligent.

(3) Under a policy of first-party insurance, the determination of whether the
insurer's delay or denial was reasonable shall be based on whether the insurer
knew that its delay or denial was unreasonable or whether the insurer recklessly
disregarded the fact that its delay or denial was unreasonable.

(4) In determining whether an insurer's delay or denial was reasonable, the
jury may be instructed that willful conduct of the kind set forth in section 10-3-1104
(1)(h)(I) to (1)(h)(XIV) is prohibited and may be considered if the delay or denial and
the claimed injury, damage, or loss was caused by or contributed to by such
prohibited conduct.

Legislative History

Source: L. 87: Entire section added, p. 423, � 1, effective July 1.