Unfair Claim Settlement Practices – It is illegal to commit any of the following acts with a frequency to indicate it as a general business practice.
- Misrepresenting pertinent facts or insurance policy provisions relating to coverage at issuance
- Failing to acknowledge and act immediately upon communications with respect to claims arising under insurance polices
- Failing to implement
- Refusing to pay claims without conducting an investigation based upon all available information
- Failing to affirm or deny coverage of a claim within a reasonable time after proof of loss statements have been completed
- Not attempting in good faith to effectuate prompt, fair, and equitable settlements of a claim which liability has become clear
- Advising insured to file suits to recover amounts due under an insurance policy by offering substantially less than the amounts that were recovered in actions brought by such insured
- Attempting to settle a claim for less that a reasonable person would have believed he or she was entitled by reference to printed advertising material accompanying or made part of an application
- Making claims payments to insured not accompanied by statement setting forth the coverage under which the payments are being made
- Attempting to settle claims on the basis of an application which was altered without notice to or consent of the insured
- Making known to the insured a policy of appealing from arbitration awards in favor of insured for the purpose of compelling the insured to accept settlements for less than the amount awarded in arbitration
- Delaying the investigation or payment of a claim by requiring the insured or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which contain substantially the same information
- Failing to provide a reasonable explanation of the basis in an insurance policy in relation to the facts for denial of a claim
- Failure to provide forms necessary to present claims within fifteen (15) days of a request with reasonable explanations regarding their use, if the insurance company maintains forms for that purpose.
Unfair Trade Practice Penalties
- Unknowing violations – One thousand dollars ($1000.00) for each violation up to One hundred thousand ($100,000.00) dollars total.
- Knowing violations – Twenty five thousand ($25,000) for each violation up to two hundred fifty thousand ($250,000.00) total
- License suspension or revocation are possible, if the person knew or could have reasonably known it was in violation.
- Cease and Desist – Stop what you are doing
- Violating the Cease and Desist order – Twenty five thousand dollars ($25,000) for each violation up to two hundred fifty thousand dollars ($250,000) total, with possible loss of license or Certificate of Authority.
[mtouchquiz 5]