Chapter
526
2007 -- H 5547 SUBSTITUTE A AS AMENDED
Enacted 10/30/07
A N A C T
RELATING TO INSURANCE
- UNFAIR CLAIMS SETTLEMENT PRACTICES ACT - MOTOR VEHICLE REPARATIONS
Introduced By: Representative Arthur J. Corvese
Date
Introduced: February 28, 2007
It is
enacted by the General Assembly as follows:
SECTION
1. Section 27-9.1-4 of the General Laws in Chapter 27-9.1 entitled "Unfair
Claims
Settlement Practices Act" is hereby amended to read as follows:
27-9.1-4.
"Unfair claims practices" defined. -- Any of the following
acts by an insurer,
if
committed in violation of section 27-9.1-3, constitutes an unfair claims
practice:
(1) Misrepresenting to claimants and insured relevant facts or policy
provisions relating
to
coverage at issue;
(2) Failing to acknowledge and act with reasonable promptness upon pertinent
communications
with respect to claims arising under its policies;
(3) Failing to adopt and implement reasonable standards for the prompt
investigation and
settlement
of claims arising under its policies;
(4) Not attempting in good faith to effectuate prompt, fair, and equitable
settlement of
claims
submitted in which liability has become reasonably clear;
(5) Compelling insured, beneficiaries, or claimants to institute suits to
recover amounts
due
under its policies by offering substantially less than the amounts ultimately
recovered in suits
brought
by them;
(6) Refusing to pay claims without conducting a reasonable investigation;
(7) Failing to affirm or deny coverage of claims within a reasonable time after
having
completed
its investigation related to the claim or claims;
(8) Attempting to settle or settling claims for less than the amount that a
reasonable
person
would believe the insured or beneficiary was entitled by reference to written
or printed
advertising
material accompanying or made part of an application;
(9) Attempting to settle or settling claims on the basis of an application that
was
materially
altered without notice to, or knowledge or consent of, the insured;
(10) Making claims payments to an insured or beneficiary without indicating the
coverage
under which each payment is being made;
(11) Unreasonably delaying the investigation or payment of claims by requiring
both a
formal
proof of loss form and subsequent verification that would result in duplication
of
information
and verification appearing in the formal proof of loss form;
(12) Failing in the case of claims denials or offers of compromise settlement
to promptly
provide
a reasonable and accurate explanation of the basis of those actions;
(13) Failing to provide forms necessary to present claims within ten (10)
calendar days
of a
request with reasonable explanations regarding their use;
(14) Failing to adopt and implement reasonable standards to assure that the
repairs of a
repairer
owned by or required to be used by the insurer are performed in a workmanlike
manner;
(15) Misleading a claimant as to the applicable statute of limitations;
(16) Failing to respond to a claim within thirty (30) days, unless the insured
shall agree
to a
longer period;
(17) Engaging in any act or practice of intimidation, coercion, threat or
misrepresentation
of consumers rights, for or against any insured person, claimant, or
entity to
use a
particular rental car company for motor vehicle replacement services or
products; provided,
however,
nothing shall prohibit any insurance company, agent or adjuster from providing
to such
insured
person, claimant or entity the names of a rental car company with which
arrangements
have
been made with respect to motor vehicle replacement services; provided, that
the rental car
company
is licensed pursuant to Rhode Island general laws section 31-5-33; or
(18) Refusing to honor a "direction to pay" executed by an insured,
claimant, indicating
that the
insured or claimant, wishes to have the insurance company directly pay
his or her motor
vehicle
replacement vehicle rental benefit to the rental car company of the consumer's
choice;
provided,
that the rental car company is licensed pursuant to Rhode Island general laws
section
31-5-33.
Nothing in this section shall be construed to prevent the insurance company's
ability to
question
or challenge the amount charged, in accordance with its policy provisions, and
the
requirements
of the department of business regulation. and ;
(22)
Failing to comply with the requirements of Rhode Island general laws section
31-47-
12.1.
SECTION
2. Section 31-47-12.1 of the General Laws in Chapter 31-47 entitled "Motor
Vehicle
Reparations Act" is hereby amended to read as follows:
31-47-12.1.
Right to choose auto body repair facility. -- Any evidence of proof of
financial
responsibility or security shall include the following statement therein:
"Pursuant to
Rhode
Island insurance law, an insurance company cannot require that repairs be made
to a motor
vehicle
by any particular auto body repair shop or facility." in bold face print: "PURSUANT TO
RHODE
ISLAND LAW, THE CONSUMER HAS THE RIGHT TO CHOOSE THE REPAIR
FACILITY
TO COMPLETE REPAIRS TO A MOTOR VEHICLE. AN INSURANCE
COMPANY
MAY NOT INTERFERE WITH THE CONSUMER'S CHOICE OF REPAIRER."
SECTION
3. This act shall take effect on January 1, 2008.
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LC02152/SUB A/3
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