Cary v. United of Omaha Life Ins. Co
In Cary v. United of Omaha Life Ins. Co., 68 P.3d 462, 466 (Colo. 2003), an entity that did not issue the insurance policy "fulfilled virtually all of the functions normally performed by an insurance company in processing claims and determining whether to deliver insurance benefits." Id. at 468.
Furthermore, the entity "had a significant financial incentive to delay payment of benefits or coerce [the insured] into a diminished settlement." Id.
The court in Cary held that the entity owed a duty of good faith and fair dealing to the insured, even where no privity of contract existed between the two, because the entity "had primary control over benefit determinations, assumed some of the insurance risk of loss, undertook many of the obligations and risks of an insurer, and had the power, motive, and opportunity to act unscrupulously in the investigation and servicing of insurance claims." Id. at 463.