Alaska Administrative Code
Title 3 - Commerce, Community, and Economic Development
Part 2 - Division of Insurance
Chapter 26 - Trade Practices
Article 1 - Unfair Claims Settlement Acts or Practices
3 AAC 26.070 - Standards for prompt, fair, and equitable settlements

Universal Citation: 3 AK Admin Code 26.070

Current through February 24, 2025

(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a first-party claim:

(1) shall advise a first-party claimant in writing of the acceptance or denial of the claim within 15 working days after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss unless another time limit is specified in the insurance policy, insurance contract, or other coverage document; payment of the claim within this time limit constitutes written acceptance; a written denial of the claim must state the specific provisions, conditions, exclusions, and facts upon which the denial is based; if additional time is needed to determine whether the claim should be accepted or denied, written notification giving the reasons that more time is needed shall be given to the first-party claimant within the deadline. While the investigation remains incomplete, additional written notification shall be provided 45 working days from the initial notification, and no more than every 45 working days thereafter giving the reasons that additional time is necessary to complete the investigation; if there is a reasonable basis supported by specific information for suspecting that a first-party claimant has fraudulently caused or wrongfully contributed to the loss, and the basis is documented in the claim file, this reason need not be included in the written request for additional time to complete the investigation or the written denial; however, within a reasonable time for completion of the investigation and after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss, the first-party claimant shall be advised in writing of the acceptance or denial of the claim;

(2) shall, within 30 working days after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss, pay those portions of the claim not in dispute;

(3) may not fail to settle first-party claims on the basis that responsibility for payment must be assumed by others, except as may be expressly provided by provisions of the insurance policy, insurance contract, or other coverage document.

(b) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a third-party claim may not make any statement that indicates that the rights of a third-party claimant may be impaired if a form, compromise, release, or similar document is not completed within a given period of time, unless the statement is given for the purpose of notifying the third-party claimant of an applicable statute of limitation.

(c) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim may not continue negotiations for settlement of the claim directly with any claimant who is neither an attorney nor represented by an attorney to a time when the claimant's rights might be affected by a statute of limitation, coverage provision, or other time limit, unless written notice is given to the claimant clearly stating the time limit that might be expiring and its effect upon the claim; such a written notice shall be given at least 60 calendar days before the date on which the time limit might expire.

(d) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim shall pay a judgment or settlement of the claim including advances, partial settlements, or similar payments

(1) with a negotiable check payable in cash to the payee upon presentation to a bank located in this state; if the check is not drawn upon a bank having a physical location in this state, the check must be payable in cash upon presentation to at least one bank having a physical location in this state;

(2) by electronic funds transfer; or

(3) by prepaid card product, if approved by the director.

(e) The provisions of (a), (b), and (c) of this section do not apply to an insurance claim subject to AS 21.36.495 or other health insurance claim for which the insurer complies with AS 21.36.495.

In 2010 the revisor of statutes, acting under AS 01.05.031, redesignated former AS 21.36.350 as AS 21.36.125(c), and renumbered former AS 21.89.030 as AS 21.96.030. As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125(b)(6), to the authority citation that follows 3 AAC 26.070, so that the citation to former AS 21.89.030 now refers to the renumbered statute, AS 21.96.030. In addition, the regulations attorney deleted the citation to former AS 21.36.350, to reflect that the authority citation already includes a citation to AS 21.36.125, the section where material formerly in AS 21.36.350 was relocated.

Authority:AS 21.06.090

AS 21.36.125

AS 21.36.495

AS 21.96.030

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