and (13), MCA as interpreted by Ridley and Dubray

# COMMISSIONER OF SECURITIES AND INSURANCE Troy Downing Commissioner Office of the Montana State Auditor ## ADVISORY MEMORANDUM To: ALL INTERESTED PERSONS From: TROY DOWNING Commissioner of Securities and Insurance, Montana State Auditor Date: 01/26/2024 ### Advisory Memorandum Regarding §§ 33-18-201(6) and (13), MCA as interpreted by Ridley and Dubray ### Background The Montana Supreme Court has repeatedly held that sections 33-18-201(6) and (13), MCA, require an insurer to provide advanced payment (prior to final settlement) to a victim of an automobile accident for any damages for which liability under the policy is reasonably clear. See Ridley v. Guaranty Nat'l Ins. Co., 286 Mont. 325, 951 P.2d 987 (1997) and Dubray v. Farmers Ins. Exch., 2001 MT 251, 307 Mont. 134, 36 P.3d 897. Since Ridley was decided in 1997, this office has received multiple requests for the position of the Commissioner of Securities and Insurance (CSI) as to whether the costs incurred by a victim of an automobile accident in acquiring medical records to support their claim to an insurer for medical expenses falls within Ridley's prepayment mandate upon insurers. On at least three occasions the CSI has confirmed that the costs of obtaining medical records would fall under Ridley if those costs are directly related to the insured's negligence or wrongful act. However, these prior opinions have been in the form of individual opinion letters. Having recently received another request for clarity on this issue, the CSI now affirms this long-standing position with this Advisory Memorandum. 840 Helena Avenue, Helena, Montana 59601 (main fax) 406.444.3413 | (securities fax) 406.444.5558 (insurance consumer services fax) 406.444.1980 | (legal fax) 406.444.3499 (phone) 800.332.6148 or 406.444.2040 | (email) csi@mt.gov | (web) www.csimt.gov Advisory Memorandum Regarding §§ 33-18-201(6) and (13), MCA as interpreted by Ridley and Dubray January 26, 2024 Page 2 ## Guidance CSI reads both sections 33-18-201(6) and (13) consistent with Ridley and Dubray to require an insurer to provide advanced payment to a victim of an automobile accident for any damages that are not reasonably in dispute. The scope of Ridley is not limited to medical expenses. Dubray at ¶ 15. The duty for advanced payment of damages under Ridley encompasses any expenses incurred by the victim of an automobile accident that have become reasonably clear, including but not limited to medical expenses and lost wages. Id. When determining whether an insurer's failure to pay expenses (such as costs of acquiring medical records) violates sections 33-18-201(6) and (13), MCA, the CSI will examine whether the damages at issue are "reasonably certain and directly related to an insured's negligence or wrongful act." Dubray at ¶ 15. The CSI will also consider, "Montana's public policy of protecting innocent victims of automobile accidents." Id. at ¶ 14. This advisory memorandum is informational only and does not enlarge, delimit, or otherwise modify any requirements of applicable law or in any way limit the authority of CSI under applicable law. CSI encourages interested persons to consult with independent legal counsel for guidance on the application of law to any particular circumstances.