Chapter
527
2007 -- H 5549 SUBSTITUTE A
Enacted 10/30/07
A N A C T
RELATING TO INSURANCE
- UNFAIR CLAIMS SETTLEMENT PRACTICES ACT
Introduced By: Representatives Corvese, and Long
Date Introduced: February 28, 2007
It is
enacted by the General Assembly as follows:
SECTION
1. Section 27-9.1-4 of the General Laws in Chapter 27-9.1 entitled "Unfair
Claims
Settlement Practices Act" is hereby amended to read as follows:
27-9.1-4.
"Unfair claims practices" defined. – (a) Any of the following
acts by an
insurer,
if committed in violation of section 27-9.1-3, constitutes an unfair claims
practice:
(1) Misrepresenting to claimants and insured relevant facts or policy
provisions relating
to
coverage at issue;
(2) Failing to acknowledge and act with reasonable promptness upon pertinent
communications
with respect to claims arising under its policies;
(3) Failing to adopt and implement reasonable standards for the prompt
investigation and
settlement
of claims arising under its policies;
(4) Not attempting in good faith to effectuate prompt, fair, and equitable
settlement of
claims
submitted in which liability has become reasonably clear;
(5) Compelling insured, beneficiaries, or claimants to institute suits to
recover amounts
due
under its policies by offering substantially less than the amounts ultimately
recovered in suits
brought
by them;
(6) Refusing to pay claims without conducting a reasonable investigation;
(7) Failing to affirm or deny coverage of claims within a reasonable time after
having
completed
its investigation related to the claim or claims;
(8) Attempting to settle or settling claims for less than the amount that a
reasonable
person
would believe the insured or beneficiary was entitled by reference to written
or printed
advertising
material accompanying or made part of an application;
(9) Attempting to settle or settling claims on the basis of an application that
was
materially
altered without notice to, or knowledge or consent of, the insured;
(10) Making claims payments to an insured or beneficiary without indicating the
coverage
under which each payment is being made;
(11) Unreasonably delaying the investigation or payment of claims by requiring
both a
formal
proof of loss form and subsequent verification that would result in duplication
of
information
and verification appearing in the formal proof of loss form;
(12) Failing in the case of claims denials or offers of compromise settlement
to promptly
provide
a reasonable and accurate explanation of the basis of those actions;
(13) Failing to provide forms necessary to present claims within ten (10)
calendar days
of a
request with reasonable explanations regarding their use;
(14) Failing to adopt and implement reasonable standards to assure that the
repairs of a
repairer
owned by or required to be used by the insurer are performed in a workmanlike
manner;
(15) Misleading a claimant as to the applicable statute of limitations;
(16) Failing to respond to a claim within thirty (30) days, unless the insured
shall agree
to a
longer period;
(17) Engaging in any act or practice of intimidation, coercion, threat or
misrepresentation
of consumers rights, for or against any insured person or entity to use a
particular
rental car company for motor vehicle replacement services or products;
provided,
however,
nothing shall prohibit any insurance company, agent or adjuster from providing to
such
insured
person or entity the names of a rental car company with which arrangements have
been
made
with respect to motor vehicle replacement services; provided, that the rental
car company is
licensed
pursuant to Rhode Island general laws section 31-5-33; or
(18) Refusing to honor a "direction to pay" executed by an insured
indicating that the
insured
wishes to have the insurance company directly pay his or her motor vehicle
replacement
vehicle
rental benefit to the rental car company of the consumer's choice; provided,
that the rental
car
company is licensed pursuant to Rhode Island general laws section 31-5-33.
Nothing in this
section
shall be construed to prevent the insurance company's ability to question or
challenge the
amount
charged, in accordance with its policy provisions, and the requirements of the
department
of
business regulation.
(19)
Modifying any published manual (i.e. motors, mitchells, or any automated
appraisal
system)
relating to auto body repair without prior agreement between the parties.
(20)
Failing to use a manual or system in its entirety in the appraisal of a motor
vehicle;
(21)
Refusing to compensate an auto body shop for documented charges as identified
through
industry recognized software programs or systems for paint and refinishing
materials in
auto
body repair claims; and/or
(b)(1)
Nothing contained in subsections 27-9.1-4(a) (19), (20), & (21) of this
chapter
shall
be construed to interfere with an auto body repair facility's contract with an
insurance
company.
(2)
If an insurance company and auto body repair facility have contracted under a
direct
repair
program or any similar program thereto the provisions of subsections
27-9.1-4(a) (19), (20)
&
(21) shall not apply.
(3)
If the insured or claimant elects to have the vehicle repaired at a shop of his
or her
choice,
the insurer shall not limit or discount the reasonable repair costs based upon
the charges
that would
have been incurred had the vehicle been repaired by the insurer's chosen
shop(s).
SECTION
2. This act shall take effect upon passage.
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LC02021/SUB A
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