• The Colorado Unfair Claims Practice Act specifies the unfair practices that insurance companies should avoid in handling claims. If you are the beneficiary of a Colorado life insurance policy, the life insurance company must follow certain rules if it wants to deny your claim.
  
  

Factual Basis

• The Colorado rules require a life insurance company to provide the beneficiary of a life insurance policy with a factual basis for denial of a claim. For instance, a life insurance company might decide to deny benefits to a beneficiary if the person who took out the insurance policy did not provide complete information relating to his health at the time of taking out the policy.
  
  

Objective and Reliable Information

• A life insurance company can deny a life insurance claim in Colorado only if the denial is based on objective and reliable information. A life insurance denial should not be based on biased, one-sided information, or on speculation or conjecture. For instance, if someone anonymously reports to a life insurance company investigator that the insured was insolvent and took out the policy with the intention of getting insurance benefits for his beneficiaries, the life insurance company cannot base a claim denial on that information alone. It must take into account other evidence.
  
  

Information Known

• The denial of a Colorado life insurance claim must be based on information known to the life insurance company at the time of the denial, not on information that it uncovers after the denial. For instance, the company cannot deny a claim based on the assertion that the insured had a pre-existing condition and did not reveal all the relevant details relating to his health, if it does not have any information about this at the time of denying the claim. It cannot deny the claim and then find information to support the denial.
  
  

Other Requirements

• An insurance company should deny a claim only after investigating the insured's claim for benefits, and it should give equal weight to the interests of the insured and its own interests. Substantial justification must exist for denial of a claim.