The Unfair Claim Settlement Practices Act

The Unfair Claim Settlement Practices Act provides that no insurer may engage in unfair claim settlement practices. Examples of unfair claim settlement practices are:

• The intentional misrepresentation to a claimant any pertinent facts or policy provisions which relate to the coverage at issue
• The failure to acknowledge, with reasonable promptness, relevant communications relating to a claim
• The failure to adopt and implement reasonable standards for the prompt investigation of a claim
• The lack of attempt to make a prompt, fair and equitable settlement of a claim in which liability is reasonably clear
• Compelling a policyholder to initiate a lawsuit in order to recover amounts due by reason of policy coverage or offering to settle for an amount considerably less than is ultimately recovered by the claimant
• The failure of any insurer to maintain complete records of all complaints received during a specified number of previous years, or since the date of the last examination by the insurance commissioner, whichever is shorter
• Committing other actions which may be defined as unfair claim settlement practices