R590-192-10. Unfair Claim Settlement Practices

The commissioner finds that the following acts or general business practices are unfair claim settlement practices and are misleading, deceptive, unfairly discriminatory, overreaching, or an unreasonable restraint on competition: (1) concealing from or failing to fully disclose to a claimant a benefit, limitation, exclusion, coverage, or other relevant provision of a policy under which a claim is presented; (2) denying or threatening to deny a claim, rescinding, canceling, or threatening to rescind or cancel coverage under a policy for any reason that is not clearly described in a policy as a reason for denial, cancellation, or rescission; (3) refusing to settle a claim without conducting a reasonable investigation; (4) denying or paying a claim without: (a) providing a notification or an explanation of benefits describing the exclusion or benefit; and (b) explaining how the denial or payment is calculated; (5) failing to provide a claimant a written explanation of the evidence of an investigation or the claim file materials supporting a denial of a claim based on misrepresentation or fraud, if misrepresentation or fraud is the basis for the denial; (6) compensating an employee, producer, or contractor an amount based on savings to the insurer due to denying or reducing payment of a claim, unless the compensation relates to the discovery of a billing or processing error; (7) failing to pay a claim following receipt of a proof of loss if liability is reasonably clear under one coverage to influence settlement: (a) under another portion of the policy; or (b) under another policy; (8) advising a claimant not to obtain the services of an attorney or other advocate, or suggesting a claimant will receive less money if an attorney is used to: (a) pursue a claim; or (b) advise on the merits of a claim; (9) misleading a claimant about applicable statutes of limitation; (10) deducting from a claim payment made under one policy the premium owed by the claimant on another policy, unless the claimant consents; (11) failing to pay a claim on the basis that responsibility for payment of the claim should be assumed by someone else, except as provided by a policy provision; (12) issuing a check or draft in partial settlement that contains language that releases an insurer from total liability; (13) refusing to provide a written basis for the denial of a claim upon demand of a claimant; (14) refusing to pay a reasonable incurred expense to a claimant if the expense resulted from a delay, prohibited by this rule, in a claim settlement or claim payment; (15) failing to pay interest at the legal rate under Title 15, Chapter 1, Interest: (a) on an amount that is overdue and unpaid within 20 days of completing an investigation; or (b) to a health care provider on an amount that is overdue under Section 31A-26-301.6; (16) failing to provide a claimant with an explanation of benefits; and (17) for a health benefit plan, failing to: (a) permit a claimant to review the claim file and present evidence as part of the claim and appeal process; (b) provide a claimant, at no cost, new or additional evidence considered, relied upon, or generated by the insurer in connection with the claim; or (c) ensure that all claims and appeals are adjudicated in an independent and impartial manner.