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Claim-handling guidelines.

Continuing our series of providing resource guides to help adjusting professionals stay abreast of each state's property and casualty claim-handling requirements, Claims presents an overview of the regulations that govern Midwestern states. This month's installment, which marks the third of a total of five special supplements, features protocols for 10 states. Next month, we'll cover the Rocky Mountain region.

Special thanks to Timothy Lynch and Anne Bandle from the law firm of Lynch and Associates in Anchorage, Alaska (www.northlaw.com), who compiled this essential information.

Legend

ACT TO BE PERFORMED

Advise the person presenting the claim in writing or other proper legal manner of the reason for the inability to affirm or deny coverage or a claim

Within 30 days after proof of loss statements have been received DE ADC 18 900 902 1.2.1.4

COMPLIANCE TIMEFRAME

REFERENCE

Illinois

Make a bona fide effort to communicate with all insureds and claimants where liability is reasonably clear and maintain evidence of effort to communicate in the claim file

Within 21 working days after a notification of loss 50 IL ADC 919.40

Acknowledge pertinent communications from a claimant or insured with respect to claim arising under policy

Within 15 working days from receipt of the communication 50 IL ADC 919.40; 215 ILCS 5 [section] 154.6(b)

Affirm or deny liability on claims Within a reasonable time 50 IL ADC 919.50(a)

Offer payment on claims if the amount of the claim is determined and not in dispute

Within 30 calendar days 50 IL ADC 919.50(a)

Tender payment for portions of the claim that are not in dispute and for which the payee is known

Within 30 calendar days 50 IL ADC 919.50(a)

On first party claims, if a settlement of a claim is less than the amount claimed, or if the claim is denied, provide a reasonable written explanation of the basis of the lower offer or denial. Include the policy definition, limitation, exclusion or condition upon which denial was based, and a Notice of Availability of the Department of Insurance.

Within 30 calendar days after the investigation and determination of liability is completed 50 IL ADC 919.50(a)(1)

If the claim is denied, provide the third party a reasonable written explanation of the basis of the denial

Within 30 calendar days after the initial determination of liability 50 IL ADC 919.50(a)

Report vexatious or unreasonable delay findings by a court of law to the Director of the Illinois Department of Insurance and enclose copy of findings and penalties, if any

Within 30 days after such findings 50 IL ADC 919.80(a); 215 ILCS 5 [section] 155

For automobile collision claim, make final payment or render the repaired automobile to the insured or third party claimant

Within 40 calendar days from the date of notification of the loss 50 IL ADC 919.80(b)(1)-(2)

If a first-party physical damage automobile claim remains unresolved for more than 40 calendar days from the date the claim is reported, provide a reasonable written explanation for the delay to the insured and include Notice of Availability of the Department of Insurance

Not specified 50 IL ADC 919.80(b)(2)

For automobile property damage liability claims, make final payment or render the repaired automobile to the insured or third party claimant

Within 60 calendar days from the date of notification of the loss 50 IL ADC 919.80(b)(1), (3)

If an automobile property damage liability claim remains unresolved for more than 60 calendar days from the date the claim is reported, provide a reasonable written explanation for the delay to the third-party claimant and include Notice of Availability of the Department of Insurance

Not specified 50 IL ADC 919.80(b)(3)

Make final payment on claims on policies of fire and extended coverage insurance

Within 40 calendar days from the date of notification of loss 50 IL ADC 919.80(b)(1); 50 IL ADC 918.80(d)(7)(A)

If claim on a policy of fire and extended coverage insurance remains unresolved for more than 75 calendar days from the date it is reported, or 25 calendar days after receipt of proof of loss, whichever is less, provide reasonable written explanation for the delay to the insured and include Notice of Availability of the Department of Insurance

Not specified 50 IL ADC 919.80(d)(7)(B)

For fire and extended coverage claim, supply copy of written estimate upon which settlement of partial losses is based to insured

Upon request of insured 50 IL ADC 919.80(d)(7)(B)

For fire and extended coverage claims, review and respond in writing to insured in regard to a written estimate obtained by insured and provide insured with the name of a repair shop or contractor that will make the repairs

Promptly upon receipt of written estimate obtained by insured 50 IL ADC 919.80(d)(7)(B)

Advise the insured in writing of the number of days the period within which the insured may bring suit under a residential fire and extended coverage policy was tolled and how many days are left before the expiration of the time to bring suit

At the time the claim is denied, in whole or in part 50 IL ADC 919.80(d)(8)(C)

Affirm or deny coverage of claim

Within a reasonable time after proof of loss statements have been completed 215 ILCS 5 [section] 154.6(i)

In the case of the denial of a claim or the offer of a compromise settlement, provide a reasonable and accurate explanation of the basis in the insurance policy or applicable law for such denial or compromise settlement

Promptly 215 ILCS 5 [section] 154.6(n)

Provide forms necessary to present claim with explanation of effective use of forms

Within 15 working days of a request 215 ILCS 5 [section] 154.6(o)

Wisconsin

Acknowledge pertinent communications with respect to claim

Within 10 consecutive days form receipt of a communication concerning a claim

WI ADC [section] Ins 6.11(3)(1); WI ADC [section] Ins 6.11(4)

Provide necessary claim forms, instructions and reasonable assistance to insureds and claimants

Within 10 consecutive days form receipt of a communication concerning a claim

WI ADC [section] Ins 6.11(3)(3); WI ADC [section] Ins 6.11(4)

Provide a reasonable explanation of the basis in the policy contract or applicable law for denial of a claim or for the offer of a compromise settlement

Within 10 consecutive days form receipt of a communication concerning a claim

WI ADC [section] Ins 6.11(3)(5); WI ADC [section] Ins 6.11(4)

West Virginia

Notify first-party claimant and the provider(s) of services covered under accident and sickness insurance and hospital and medical service corporation insurance policies whether the claim has been accepted or denied and the reasons therefore. Notice to the claimant is not required should benefits be assigned. Notice to the health core provider is not required if benefits are payable directly to the claimant

Within 15 calendar days form the filing of the proof of loss W. Va. Code [section] 33-11-4(9)(o)

Notify first party claimant in writing that more time is needed to investigate the claim

Within 15 calendar days from the date of the initial notification and every 30 calendar days thereafter, but no more than 90 calendar days from the first party claimant's filing of the proof of loss unless there is a dispute as to coverage, liability or damages, or the claimant has fraudulently caused or contributed to the loss W. Va. Code [section] 33-11-4(9)(o)

All communications and transactions emanating from or received by the insurer shall be dated by the insurer. A notation of the substance and date of all oral communications shall be contained in the claim tile. Insurers shall either make a notation in the tile or retain a copy of all forms mailed to claimants.

Not specified WV ADC 114-14-3

Acknowledge receipt of notification of claim. If acknowledgment is not made in writing, notate and date acknowledgment in claim file.

Within 15 working days of receiving notification unless full payment is made during that period of time WV ADC 114-14-5.1

Furnish the Insurance Commissioner with a complete written response to an inquiry other than a notice of third-party administrative complaint

Within 15 working days of the date appearing on the inquiry WV ADC 114-14-5.2

Reply to all other pertinent communications from a claimant which reasonably suggest that a response is expected

Within 15 working days of receipt of the communication WV ADC 114-14-5.3

Provide necessary claim forms, instructions, and reasonable assistance to first-party claimants Promptly upon receiving notification of a claim. If compliance is within 15 working days of notification of a claim, this satisfies the acknowledgment requirement above. WV ADC 114-14-5.4

Commence investigation of any claim filed by a claimant or a claimant's authorized representative

Within 15 working days of receipt of notice of claim WV ADC 114-14-6.2(a)

Provide to every first-party claimant or to 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 15 working days of receiving notice of the claim WV ADC 114-14-6.2(b)

Deny the claim in writing or make a written offer, subject to policy limits and, with respect to medical professional liability claims, subject to applicable statutory requirements

Within 10 working days of completing investigation WV ADC 114-14-6.3

Notify the claimant in writing if more than 30 calendar days from the date that a proof of loss from a first-party claimant or notice of claim from a third-patty claimant is received are needed to determine whether a claim should be accepted or denied, setting forth the reasons additional time is needed

Within 15 working days after the 30-day period expires WV ADC 114-14-6.7

If investigation remains incomplete, provide written notification of the delay to the claimant selling forth the reasons additional time is needed for investigation Every 45 calendar days until the investigation is complete WV ADC 114-14-6.7

Pay any amount finally agreed upon in settlement of all or part of any claim

Not later than 15 working days from the receipt of such agreement or the date of the performance by the claimant of any condition set by such agreement, whichever is later WV ADC 114-14-6.11

Give the first-party claimant who is not an attorney nor represented by an attorney written notice that the claimant's rights may be affected by a statute of limitations or a policy or contract time limit Not less than 30 days before the date on which such time limit expires WV ADC 114-14-6.12

Give the third-party claimant who is not an attorney nor represented by an attorney written notice that the claimant's rights may be affected by a statute of limitations or a policy or contract time limit Not less than 60 days before the date on which such time limit expires WV ADC 114-14-6.12

If any element of a physical damage claim arising under motor vehicle collision and comprehensive coverage remains unresolved mare than 15 working days from the date of receipt of proofs of loss, provide insured with a written explanation of the specific masons for the delay in the claim settlement unless reasonable grounds exist to suspect fraud or arson

Not specified for initial explanation but every 30 calendar days thereafter until all elements of the claim are either honored or rejected WV ADC 114-14-7.5

Ohio

Acknowledge receipt of claim to the first or third-party claimant

Within 15 calendar days after receipt of notice of a claim OAC [section] 3901-1-54(F)(2)

Make an appropriate reply to all other communications from a first or third-party claimant which reasonably suggests that a response is appropriate

Within 15 calendar days following receipt of communication OAC [section] 3901-1-54(F)(3)

Provide necessary claim forms, instructions and assistance to first or third-party claimant

Within 15 calendar days after receipt of notification of a claim OAC [section] 3901-1-07(C)(5)

Commence an investigation of any claim

Within 15 calendar days after receipt of notice of a claim OAC [section] 3901-1-07(C)(4)

Give written notification to the first or third-party claimant that states the need and reasons for additional time to complete the investigation

Notification shall be given within the 21 calendar day time flame following receipt of notice of claim and every 45 calendar days thereafter OAC [section] 3901-1-54(G)(1) see also OAC [section] 3901-1-07(C)(12)(a)

Give written notification to the first or third-party claimant that states the need and reasons for additional time to complete the investigation if not completed 90 calendar days after the initial letter setting forth the need for further time to investigate

Within 90 calendar days after the first letter setting out need for additional time. Send additional letter every 90 calendar days thereafter. OAC [section] 3901-1-07(C)(12)(b)

Pay pardon of the claim not in dispute

Within 10 calendar days after acceptance of the claim by insurer OAC [section] 3901-1-54(G)(6); see also OAC [section] 3901-1-07(C)(6)

Provide written notification to first or third-party claimant not represented by an attorney that his/her rights might be affected by a statute of limitation or a coverage provision relating to a time limit

At least 60 calendar days before the date on which the time limit might expire OAC [section] 3901-1-54(G)(5)

Pay amount agreed upon

Within 5 calendar days from receipt of agreement or performance by first or third-party claimant of any additional condition set by agreement whichever is later OAC [section] 3901-1-07(C)(16)

Tennessee

Tennessee has adopted a version of the Unfair Claim Settlement Practices Act. It is T.CA [section] 56-8-104. However, Tennessee has not adopted specific time frames for compliance with any of the provisions of that ant by either statute or regulation.

Michigan

Acknowledge and act upon communications with respect to claims

Promptly M.C.L.A. 599.2026(1)(b)

Affirm or deny coverage of claim

Within a reasonable time after proof of less statements have been completed M.C.L.A. 599.2026(1)(e)

Provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable taw for denial of a claim or for the offer of a compromise settlement

Promptly M.C.L.A. 599.2026(1)(n)

Pay benefits to insured, individual or entity directly entitled to benefits under insured's contract of insurance, or a third party tort claimant

On a timely basis M.C.L.A. 500.2006(1)

Specify in writing the materials that constitute a satisfactory proof of loss

Not later than 30 days after receipt of a claim unless the claim is settled within the 30 days M.C.L.A. 500.2006(3)

Pay amount supported by proof of loss where proof of loss is not supplied as to entire claim

Within 60 days after receipt of proof of loss M.C.L.A. 500.2006(3)

Pay remainder of claim that is later supported by proof of loss

Within 60 days after receipt of proof of loss M.C.L.A. 500.2006(3)

Indiana

Conduct investigation of the matters alleged in a complaint received from the commissioner of insurance

Promptly IC 27-4-1-5.6(b)

Provide to the commissioner of insurance and the complaining party a written report containing the specific reasons for actions taken on the claim, the specific reasons for any inaction on the claim, and if the claim has not been settled, a good faith estimate of the time required for settlement

Within 20 business days from the date of receipt of the complaint IC 27-4-1-5.6(b)(1)--(3)

Acknowledge and ant upon communications with respect to claim

Promptly IC 27-4-1-4.5(2)

Affirm or deny coverage of claim

Within a reasonable time after proof of less statements have been completed IC 27-4-1-4.5(5)

Provide 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

Promptly IC 27-4-1-4.5(14)

Kentucky

Acknowledge receipt of claim to a first or third-party claimant

Within 15 working days after notification of a claim 806 KAR 12:095 [section] 5(1)

Make an appropriate reply to all other communications from a first or third-party claimant which reasonably suggests that a response is expected

Within 15 working days following receipt of communication 806 KAR 12:095 [section] 5(3)

Provide necessary claim forms, instructions and assistance to first-party claimant

Reasonable time after receipt 806 KAR 12:095 [section] 6(1)(a)

Affirm or deny liability on first and third-party claim

Reasonable time after receipt 806 KAR 12:095 [section] 6(1)(a) & [section] 6(6)

Pay all claim to first-party claimant

Within 30 working clays after receipt of notice and proof of claim KRS 304.12-235; 806 KAR 12:095 [section] 6(1)(a) & [section] 6(6)

Give written notification to first-party claimant that states the need and reasons for additional investigative time No later than 30 calendar days after receipt of the proof of loss 806 KAR 12:095 [section] 6(2)(a)

Pay portion of the claim not in dispute

Within 30 calendar days after receipt of a properly executed statement of due proof of loss 806 KAR 12:095 [section] 6(1)(a) [section] 6(6)

Provide additional written notification to first-party claimant that the investigation remains incomplete and the reasons

Within 45 calendar days from the first notification and no more than every 45 calendar days thereafter until the investigation is complete 806 KAR 12:095 [section] 6(2)(b)

Provide written notification to first-party claimant not represented by an attorney that his/her rights might be affected by a statute of limitation, coverage prevision or other time limit

At least 3O calendar days before the date on which the time limit might expire 806 KAR 12:095 [section] 6(4)

Missouri

Provide forms necessary to present claims with reasonable explanations regarding their use

Within 15 calendar days of a request. Compliance within 10 working days of notification of claim constitutes compliance with the acknowledgment requirement below. MO ST 375.1007(13); 20 MO ADC 100-1.030(3)

Acknowledge receipt of notification of claim from first-party claimant, g acknowledgement is not made in writing, notate and date claim file.

Within 10 working days of receiving notification 20 MO ADC 100-1.030(1)

Reply to communication from any claimant which reasonably suggests that a response is expected

Within 10 working days 20 MO ADC 100-1.030(2)

Complete investigation of a claim

Within 30 days after notification of claim 20 MO ADC 100.1.040

Advise the first-party claimant of the acceptance or denial of the claim. Denial must be in writing and a copy maintained in the claim file.

Within 15 working days after the submission of all forms necessary to establish the nature and extent of any claim 20 MO ADC 100-1.050(1)(A)

Notify the first-party claimant that more lime is needed for determination of whether claim should be accepted or denied and give the reasons why more lima is needed

Within 15 working days after the submission of all forms necessary to establish the nature and extent of any claim 20 MO ADC 100-1.050(1)(C)

If investigation remains incomplete, send the claimant a letter setting forth the mesons additional time is needed for investigation

Within 45 days from the date of the initial notification and every 45 days after 20 MO ADC 100-1.050(1)(C)

Give first-party claimant who is neither an attorney nor represented by an attorney written notice that the statute of limitations or a policy time limit may be expiring and may affect the claimant's rights

30 days before the date on which the time limit may expire 20 MO ADC 100-1.050(1)(E)

Give third-party claimant who is neither an attorney nor represented by an attorney written notice that the statute of limitations or a policy time limit may be expiring and may affect the claimant's rights

60 days before the date on which the time limit may expire 20 ADC 100-1.050(1)(E)

Give insured copy of present value calculation of future benefits when offering cash settlements of first-party long-term disability income claims and have insured sign it

At the time the settlement is entered into and at the time the insured is first approached regarding settlement 20 MO ADC 100-1.050(1)(G)

Iowa

Disclose to first-party claimants all pertinent benefits, coverages, or other provisions of a policy or contract under which a claim is presented

Not specified IA ADC 191-15.41(1)

Advise first-party property claimant of the acceptance or denial of the claim. Denial must be in writing. Claim file must contain documentation of denial.

Within 30 days after receipt of properly executed proofs of loss IA ADC 191-15.41(2)

Where there is a reasonable basis supported by specific information available for review by the commissioner that the first-party claimant has fraudulently caused or contributed to the loss, advise the claimant of the acceptance or denial of the claim

Within a reasonable time for full investigation after receipt of a properly executed proof of loss IA ADC 191-15.41(2)

Notify first-party claimant that more time is needed to determine whether a first-party claim should be accepted or denied giving the reasons more time is needed

Within 30 days after receipt of the proof of loss IA ADC 191-15.41(3)

If the investigation remains incomplete, send claimant a letter setting forth the reasons additional time is needed for investigation. Not required if there is a reasonable basis supported by specific information available for review by the commissioner that the first-party claimant has fraudulently caused or contributed to the loss.

45 days from the initial notification and every 45 days thereafter IA ADC 191-15.41(3)

Affirm or deny liability on claims Within a reasonable time IA ADC 191-15.41(6)

Tender payment if the amount of the claim is determined and not in dispute

Within 30 days of affirmation of liability IA ADC 191-15.41(6)

In claims where multiple coverages are involved, tender payments which are not in dispute under one of the coverages where the payee is known

Within 30 days if such payment would terminate the insurer's known liability under that coverage IA ADC 191-15.4(6)

Acknowledge receipt of notification of claim. If acknowledgment is not written, notate and date claim file.

Within 15 days of receipt of notice unless payment is made within that period of time IA ADC 191-15.42(1)

Furnish the Iowa Insurance Division with an adequate response, in duplicate, to any inquiry regarding a claim

Within 21 days of receipt of such inquiry IA ADC 191-15.42(2)

Reply to all pertinent communications from a claimant which reasonably suggest that a response is expected

Within 15 days IA ADC 191-15.42(3)

Provide necessary claim forms, instructions and reasonable assistance to first-party claimants

Upon receiving notification of claim. If accomplished within 15 days of notification of a claim, acknowledgement requirement above is satisfied. IA ADC 191-15.42(4)
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Title Annotation:MIDWEST REGION
Publication:Claims
Date:Oct 1, 2008
Words:3911
Previous Article:Protecting adjusters from fraud traps: continuing coverage of unfair claim settlement practices.
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