304.12-230 Unfair claims settlement
practices.
It is an unfair claims settlement practice
for any person to commit or perform any of the
following acts or omissions:
(1) Misrepresenting pertinent facts
or insurance policy provisions relating to coverages
at issue;
(2) Failing to acknowledge and act reasonably
promptly upon communications with
respect to claims arising under insurance policies;
(3) Failing to adopt and implement reasonable
standards for the prompt investigation of
claims arising under insurance policies;
(4) Refusing to pay claims without conducting
a reasonable investigation based upon
all available information;
(5) Failing to affirm or deny coverage
of claims within a reasonable time after proof of
loss statements have been completed;
(6) Not attempting in good faith to
effectuate prompt, fair and equitable settlements
of
claims in which liability has become reasonably clear;
(7) Compelling insureds to institute
litigation to recover amounts due under an
insurance policy by offering substantially less than
the amounts ultimately
recovered in actions brought by such insureds;
(8) Attempting to settle a claim for
less than the amount to which a reasonable man
would have believed he was entitled by reference to
written or printed advertising
material accompanying or made part of an application;
(9) Attempting to settle claims on the
basis of an application which was altered without
notice to, or knowledge or consent of the insured;
(10) Making claims payments to insureds
or beneficiaries not accompanied by statement
setting forth the coverage under which the payments
are being made;
(11) Making known to insureds or claimants
a policy of appealing from arbitration
awards in favor of insureds or claimants for the purpose
of compelling them to
accept settlements or compromises less than the amount
awarded in arbitration;
(12) Delaying the investigation or payment
of claims by requiring an insured, claimant,
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 submissions
contain substantially the same information;
(13) Failing to promptly settle claims,
where liability has become reasonably clear, under
one (1) portion of the insurance policy coverage in
order to influence settlements
under other portions of the insurance policy coverage;
(14) Failing to promptly provide a reasonable
explanation of the basis in the insurance
policy in relation to the facts or applicable law
for denial of a claim or for the offer
of a compromise settlement; or
(15) Failing to comply with the decision
of an independent review entity to provide
coverage for a covered person as a result of an external
review in accordance with
KRS 304.17A-621, 304.17A-623, and 304.17A-625.
Effective: July 14, 2000
History: Amended 2000 Ky. Acts ch. 262,
sec. 18, effective July 14, 2000. -- Amended
1988 Ky. Acts ch. 225, sec. 19, effective July 15,
1988. -- Created 1984 Ky. Acts
ch. 171, sec. 2, effective July 13, 1984.
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