Current through all regulations passed and filed through September 16, 2024
(A)
Purpose
The purpose of this rule is to define
certain additional unfair trade practices and to set forth required procedures
in connection therewith. Sections
3901.20
and
3901.21
of the Revised Code respectively prohibit unfair or deceptive practices in the
business of insurance and define certain acts or practices as unfair or
deceptive. Section
3901.21
of the Revised Code also provides that the enumeration of specific unfair or
deceptive acts or practices in the business of insurance is not exclusive or
restrictive or intended to limit the powers of the superintendent of insurance
to adopt rules to implement that section.
(B)
Authority
This rule is promulgated pursuant to
the authority vested in the superintendent under section
3901.041
of the Revised Code. Section
3901.041
of the Revised Code provides that the superintendent of insurance shall adopt,
amend, and rescind rules and make adjudications necessary to discharge the
superintendent's duties and exercise that person's powers under Title 39 of the
Revised Code.
(C)
Defined unfair practices
It shall be deemed an unfair or deceptive practice to commit or
perform with such frequency as to indicate a general business practice any of
the following:
(1) Knowingly
misrepresenting to claimants pertinent facts or policy
provisions relating to coverage at issue;
(a)
Misrepresenting a pertinent policy provision by making any payment, settlement,
or offer of first party benefits, which, without explanation, does not include
all amounts which should be included according to the claim filed by the first
party claimant and investigated by the insurer;
(b) Denying a claim on the grounds of a
specific policy provision, condition, or exclusion without reference to such
provision, condition, or exclusion;
(2) Failing to acknowledge pertinent
communications with respect to claims arising under insurance policies in
writing, or by other means so long as an appropriate notation is made in the
claim file of the insurer, within fifteen days of receiving notice of a claim
in writing or otherwise;
(3)
Failing to make an appropriate reply within twenty-one days of all other
pertinent communications and/or any inquiries of the department of insurance
respecting a claim;
(4) Failing to
adopt and implement reasonable procedures to commence an investigation of any
claim filed by either a first party or third party claimant, or by such
claimant's authorized representative, within twenty-one days of receipt of
notice of claim;
(5) Failing to
mail or furnish claimant or the claimant's authorized representative, a
notification of all items, statements and forms, if any, which the insurer
reasonably believes will be required of such claimant, within fifteen days of
receiving notice of claim, unless the insurer, based on the information then in
its possession does not yet know all such requirements, then such notification
shall be sent, within a reasonable time;
(6) Not offering first party or third party
claimants, or their authorized representatives who have made claims which are
fair and reasonable and in which liability has become reasonably clear, amounts
which are fair and reasonable as shown by the insurer's investigation of the
claim, providing the amounts so offered are within policy limits and in
accordance with the policy provisions;
(7) Compelling insureds to institute suits to
recover amounts due under its policies by offering substantially less
than the
amounts ultimately recovered in suits brought by them when such insureds have
made claims for amounts reasonably similar to the amounts ultimately
recovered;
(8) 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;
(9) Attempting settlement or compromise of
claims on the basis of applications which were altered without notice to, or
knowledge, or consent of insureds;
(10) Attempting to settle or compromise
claims for less than the amount which the insureds had been led reasonably to
believe they were entitled to, by written or printed advertising material
accompanying or made part of an application;
(11) Attempting to delay the investigation or
payment of claims by requiring an insured and his physician 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;
(12) Failing to advise
the first party claimant or the claimant's authorized representative, in
writing or by other means so long as an appropriate notation is made in the
claim file of the insurer, of the acceptance or rejection of the claim, within
twenty-one days after receipt by the insurer of a properly executed proof of
loss;
(a) Failing to notify such claimant or
the claimant's authorized representative, within twenty-one days after receipt
of such proof of loss, that the insurer needs more time to determine whether
the claim should be accepted or rejected;
(b) Failing to send a letter to such claimant
or, the claimant's authorized representative, stating the need for further time
to investigate the claim, if such claim remains unsettled ninety days from the
date of the initial letter setting forth the need for further time to
investigate;
(c) Failing to send to
such claimant or authorized representative every ninety days after the first
ninety-day claim investigation period, a letter setting forth the reasons
additional time is needed for investigation, unless the delay is caused by
factors beyond the insurer's control;
(13) Failing to advise such claimant or
claimant's authorized representative, of the amount offered, if such claim is
accepted in whole or in part;
(14)
Refusing payments of claims solely on the basis of the insured's request to do
so without making an independent evaluation of the insured's liability based
upon all available information;
(15) Failing to adopt and implement
reasonable standards for the proper handling of written communications,
primarily expressing grievances, received by the insurer from insureds or
claimants;
(16) Failing to pay any
amount finally agreed upon in settlement of all or part of any claim or
authorized repairs to be made upon final agreement not later than five days
from the receipt of such agreement by the insurer at the place from which the
payment or authorization is to be made or from the date of the performance by
the claimant of any condition set by such agreement, whichever is
later.
(17) For purposes of this
rule, the following definitions shall apply;
(a) "Investigation" shall mean all activities
of the company related directly or indirectly to the determining of liabilities
under the coverages afforded by the policy. This shall include, but not be
limited to, a bona fide effort to contact all insureds and claimants within a
reasonable period after notification of loss. Evidence of a bona fide effort
must be maintained in the file. The investigation shall be deemed concluded
upon the company's affirmation or denial of liability.
(b) "Notice of Claim" as applied to an
insurer shall include notification given to an agent of an insurer.
(c) "Settlement of claims" shall mean all
activities of the company related directly or indirectly to the determination
of the extent of damages due under coverages afforded by the policy. This shall
include, but not be limited to, the requiring or preparing of repair
estimates.
(d) "Days" means
calendar days. However, when the last day of a time limit stated in this rule
falls on a Saturday, Sunday or holiday, the time limit is extended to the next
immediate following day that is not a Saturday, Sunday or holiday.
(D) Severability
If any paragraph, term, or provision of this rule be adjudged
invalid for any reason, such judgment shall not affect, impair, or invalidate
any other paragraph, term, or provision of this rule, but the remaining
paragraphs, terms, and provisions shall be in and continue in full force and
effect.
