HB 1539 Summary

• Requires courts to first determine whether an insurer breached the insurance contract before considering bad faith, breach of covenant of good faith and fair dealing, or other extra-contractual claims in civil actions against insurers.

• Prohibits discovery related to bad faith or breach of covenant claims until a final judgment is reached that the insurer breached the insurance contract.

• Allows immediate appeal of district court rulings on breach of contract claims, even if other claims remain unresolved.

• Mandates dismissal with prejudice of bad faith and extra-contractual claims if the court determines the insurer did not breach its contractual obligations after all appeals are exhausted.

• Effective date: November 1, 2013.