Current through Register Vol. 51, No. 6, December 1, 2024
RELATES TO:
KRS
304.12-230,
342.267,
342.610(7)
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
342.260(1) requires the
Commissioner of the Department of Workers' Claims to promulgate administrative
regulations necessary to carry on the work of the Department of Workers' Claims
and administrative law judges.
KRS
342.267 requires the Commissioner to fine
carriers for engaging in unfair claims settlement practices under KRS Chapter
342 or 304.12-230. This administrative regulation establishes standards for the
Commissioner and carriers with regard to unfair claims settlement
practices.
Section 1. Definitions.
(1) "Agent" means a person or entity
performing claims adjusting, case management, utilization review, or other
service on behalf of a carrier.
(2) "Carrier" is defined by
KRS
342.0011(6).
Section 2. File and Record
Documentation.
(1) Each carrier's claim files
and files held by an agent of the carrier shall be subject to examination by
the commissioner or the commissioner's designee.
(2) Each carrier or agent of the carrier
shall maintain claim data that is readily accessible and retrievable for
examination.
(3) Documentation
shall be contained in each claim file:
(a)
Detailing the activities of each carrier and any agent of the carrier;
and
(b) Detailing the basis for the
decision of the carrier or agent of the carrier upon material matters of the
claim.
(4) Each document
within a claim file shall be noted as to date received, date processed, or date
mailed.
(5) For a carrier that does
not maintain hard copy files, claim files shall be capable of duplication to
legible hard copy.
(6) A claim file
shall be maintained for a period not less than five (5) years following the
creation of the material or the completion of the purpose for which it was
created, whichever shall occur last.
Section 3. Notice of Policy Provisions and
Information.
(1) A carrier shall provide the
notice required by
KRS
342.610(7) with regard to
policy provisions, coverage, and benefits.
(2) Failure to provide the notice in the form
prescribed by
803 KAR
25:200 shall constitute an unfair claims settlement
practice.
Section 4.
Duty to Investigate. Upon notice of a work-related injury, a carrier shall
diligently investigate a claim for facts warranting the extension or denial of
benefits.
Section 5. Standards for
Prompt and Timely Actions.
(1) After receipt
of notice of a work-related injury necessitating medical care or causing lost
work days, a carrier shall as soon as practicable advise an injured employee of
acceptance or denial of the claim.
(2) A carrier shall provide to the employee
in writing the specific reasons for denial of a claim.
(3) A carrier shall inform an employee of
additional information needed for the claim to be accepted.
(4) A carrier shall meet the time constraints
for accepting and paying workers' compensation claims established in KRS
Chapter 342 and 803 KAR Chapter 25.
Section 6. Standards for Fair and Equitable
Settlement.
(1) A carrier shall attempt in
good faith to promptly pay a claim in which liability is clear;
(2) A carrier shall not misrepresent
pertinent facts or law with regard to a claim;
(3) A carrier shall not compel an employee to
institute formal proceedings with the Department of Workers' Claims to recover
benefits where liability is clear;
(4) A carrier shall not offer a settlement
which is substantially less than the reasonable value of a claim;
(5) A carrier shall not threaten to file or
invoke a policy of filing appeals for the purpose of compelling a settlement
for less than a workers' compensation award; and
(6) A carrier shall not require an employee
to obtain information which is accessible to the carrier.
Section 7. Acknowledgment of Communications.
(1) Upon receipt of an inquiry from the
Department of Workers' Claims, each carrier shall furnish the Department of
Workers' Claims a full response within fifteen (15) days.
(2) Upon receipt of a communication from an
injured employee that reasonably suggests a response is expected, a carrier
shall make a prompt and appropriate reply to the employee.
This is to certify the commissioner has reviewed and
recommended this administrative regulation prior to its adoption, as required
by
KRS
342.260,
342.270
and
342.285.
STATUTORY AUTHORITY:
KRS
342.260(1)
