When an insurance policy requires the insured to provide information to the insurer, may the insured demand that the insurer enter into a confidentiality agreement, even when the request from the insurer is reasonable? Heck no, says the Oregon Court of Appeals in a new decision, Safeco v. Masood. According to the decision, the policyholder suffered a fire loss and them, to add insult to injury, had personal items stolen from the home while the fire was being investigated. Masood tendered the loss to his first-party carrier. The carrier demanded all kinds of information from Masood about the missing items. Although Masood did not contest the information request itself, he sought to have the insurer sign a confidentiality agreement restricting its use of the information. The carrier refused.
The insured contended that the terms of the policy requiring the insured to provide information did not preclude a separate confidentiality agreement, and that the carrier's duty of good faith and fair dealing (inherent in every contract, under Oregon law) required the insurer to enter into a confidentiality agreement where the insured had a good reason for it.
The Court of Appeals pointed out a few important facts: the policy stated that the insured "must" provide the information requested by the carrier; the insured did not contend that the scope of the insurer's request for information was unreasonably broad (although it certainly appeared to be); and the insurer was already by law and other legal principles not to disclose or misuse the insured's information. The Court of Appeals held, therefore, that what the insured was demanding was not only entirely outside of the terms of the policy but also beyond the carrier's duty of good faith and fair dealing.
The court appears to have taken some care to limit its holding to this set of facts, and it seems unlikely that this case will have much impact, if any, on the approach taken by Oregon courts in the majority of cases, because most cases in which the duty of good faith and fair dealing is invoked involve much closer questions of the insurer's duties.
