HB 1539 Summary

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

• Prohibits discovery related to bad faith, breach of covenant, or extra-contractual claims until a final judgment is entered against the insurer on the breach of contract claim.

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

• Requires dismissal with prejudice of all bad faith, breach of covenant, and extra-contractual claims if the court ultimately rules the insurer did not breach its contractual obligations.

• Effective date: November 1, 2013.