Chapter 085 |
2019 -- H 6101 Enacted 07/02/2019 |
A N A C T |
RELATING TO INSURANCE -- UNFAIR CLAIMS SETTLEMENT PRACTICES ACT |
Introduced By: Representatives Corvese, Barros, and Williams |
Date Introduced: May 10, 2019 |
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. |
(a) Any of the following acts by an insurer, if committed in violation of § 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 § 31-5-33; |
(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 § 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; |
(19) Modifying any published manual, (i.e., motors, Motor’s Auto Repair Manual, |
mitchells Mitchells, or any automated appraisal system), relating to auto body repair without |
prior agreement between the parties; |
(20) Failing to use a manual or system in its entirety in the appraisal of a motor vehicle; |
(21) Refusing to compensate an auto body shop for documented charges as identified |
through industry-recognized software programs or systems for paint, body and refinishing |
materials in auto body repair claims; |
(22) Failing to comply with the requirements of § 31-47-12.1; |
(23) Failure to have an appraisal performed by a licensed appraiser where the motor |
vehicle has sustained damage estimated to exceed two thousand five hundred dollars ($2,500). |
Said The licensed appraiser referred to herein must be unaffiliated with the repair facility |
repairing the subject motor vehicle; must perform a physical inspection of the damaged motor |
vehicle; and may not perform an appraisal based upon pictures of the damaged motor vehicle; |
(24) Failure to perform an initial appraisal within three (3) business days after a request is |
received from an auto body repair shop, provided the damaged motor vehicle is on the premises |
of the repair shop when the request is made;, and failure to perform a supplemental appraisal |
inspection of a vehicle within four (4) business days after a request is received from an auto body |
repair shop;. The time limitations set forth in this subsection may be extended by mutual |
agreement between the auto body repair shop and the insurer; |
(25) Designating a motor vehicle a total loss if the cost to rebuild or reconstruct the motor |
vehicle to its pre-accident condition is less than seventy-five percent (75%) of the "fair-market |
value" of the motor vehicle immediately preceding the time it was damaged: |
(i) For the purposes of this subdivision, "fair-market value" means the retail value of a |
motor vehicle as set forth in a current edition of a nationally recognized compilation of retail |
values commonly used by the automotive industry to establish values of motor vehicles; |
(ii) Nothing herein shall be construed to require a vehicle be deemed a total loss if the |
total cost to rebuild or reconstruct the motor vehicle to its pre-accident condition is greater than |
seventy-five percent (75%) of the fair-market value of the motor vehicle immediately preceding |
the time it was damaged; and |
(iii) Nothing herein shall prohibit an insurance company from agreeing to deem a vehicle |
a total loss at the vehicle owner's request and with the vehicle owner's express written |
authorization, if the cost to rebuild or reconstruct the motor vehicle to its pre-accident condition is |
less than seventy-five percent (75%) of the "fair-market value" of the motor vehicle immediately |
preceding the time it was damaged.; |
(iv) If condition adjustments are made to the retail value of a motor vehicle designated a |
total loss, all such adjustments must be in accordance with the standards set forth in the current |
edition of a nationally recognized compilation of retail values, commonly used by the automotive |
industry, used by the insurer to determine the retail value of the vehicle; and all such adjustments, |
including prior damage deductions, must be itemized, fair, and reasonable; and |
(v) When a vehicle is deemed a total loss, if the insurer is not retaining the salvage, the |
insurer must notify the owner of the vehicle in writing of the requirements of obtaining both a |
salvage title and a reconstructed title from the department of motor vehicles pursuant to chapter 1 |
of title 31.; |
(26) Negotiating, or effecting the settlement of, a claim for loss or damage covered by an |
insurance contract with an unlicensed public adjuster acting on behalf of an insured. Nothing |
contained in this section shall be construed to preclude an insurer from dealing with any |
individual or entity that is not required to be licensed under chapter 10 of title 27. |
(b)(1) Nothing contained in subsections (a)(19), (a)(20), and (a)(21) of this section shall |
be construed to interfere with an auto body repair facility's contract with an insurance company. |
(2) If an insurance company and auto body repair facility have contracted under a direct |
repair program or any similar program thereto, the provisions of subsections (a)(19), (a)(20), and |
(a)(21) of this section shall not apply. |
(3) If the insured or claimant elects to have the vehicle repaired at a shop of his or her |
choice, the insurer shall not limit or discount the reasonable repair costs based upon the charges |
that would have been incurred had the vehicle been repaired by the insurer's chosen shop(s). |
SECTION 2. This act shall take effect upon passage. |
======== |
LC002548 |
======== |