Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-125 - STANDARDS FOR PROPERTY/CASUALTY INSURANCE CLAIMS › Section 482-1-125-.07 - Standards For Prompt, Fair And Equitable Settlements Applicable To All Insurers

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Within
			 thirty (30) days, or the number of days specified in the policy, after receipt
			 by the insurer of properly executed proofs of loss, the first party claimant
			 shall be advised of the status of acceptance or denial of the claim by the
			 insurer. No insurer shall deny a first party claim on the grounds of a specific
			 policy provision, condition or exclusion unless reference to such provision,
			 condition, or exclusion is included in the denial. The denial may be given to
			 the first party claimant in writing, verbally or electronically (e-mail). If
			 verbal, the file should clearly indicate the denial and reasons for the denial.
			 If the denial is in writing or electronic (e-mail), the file should contain a
			 copy of the denial letter or e-mail. If after the first party claim is denied,
			 the first party claimant requests a written denial, a written denial shall be
			 mailed within a reasonable time. Where there is a reasonable basis supported by
			 specific information available for review by the insurance regulatory authority
			 that the first party claimant has fraudulently caused or contributed to the
			 loss, the insurer is relieved from the requirements of this paragraph;
			 provided, however, that the first party claimant shall be advised of the
			 acceptance or denial of the first party claim within a reasonable time or any
			 time limit specified in the policy for full investigation after receipt by the
			 insurer of a properly executed proof of loss.
(2) If the insurer needs more time to
			 determine whether a first party claim should be accepted or denied, it shall so
			 notify the first party claimant within thirty (30) days or the time period
			 specified in the policy after receipt of the proofs of loss, giving the reasons
			 more time is needed. If the investigation remains incomplete, the insurer
			 shall, forty-five (45) days from the initial notification and every forty-five
			 (45) days thereafter, notify the first party claimant in writing, verbally or
			 electronically (e-mail) of the reasons additional time is needed for
			 investigation. Where there is a reasonable basis supported by specific
			 information available for review by the insurance regulatory authority for
			 suspecting that the first party claimant has fraudulently caused or contributed
			 to the loss, the insurer is relieved from the requirements of this paragraph;
			 provided, however, that the claimant shall be advised of the acceptance or
			 denial of the claim by the insurer within a reasonable time for full
			 investigation after receipt by the insurer of a properly executed proof of
			 loss. If the claim is in litigation for any reason, the above notification
			 guidelines will no longer apply to that particular claim.
(3) Insurers shall not refuse to adjust first
			 party claims on the basis that responsibility for payment should be assumed by
			 others except as may otherwise be provided by policy provisions, statute or
			 case law.
(4) No insurer shall
			 knowingly cease or prolong negotiations for settlement of a claim with the
			 intention of allowing the statute of limitations to expire. On an unresolved
			 claim affected by a statute of limitations, the insurer must give a first-party
			 claimant who is not represented by counsel written notice of the expiration
			 date, as it is understood by the insurer, of the statute of limitations and the
			 effect of expiration of such limitations period. Said notice must be sent to
			 any first-party claimant approximately forty-five (45) calendar days before the
			 date on which said limitations period may expire.
(5) No insurer shall knowingly make false
			 statements indicating that the rights of a third party claimant may be impaired
			 if a form or release is not completed within a given period of time.
(6) The insurer shall tender payment within
			 thirty (30) days or the time specified in the policy, after accepting
			 liability, reaching an agreement on the amount of the claim and receipt of any
			 documents necessary to consummate the settlement.
(7) No insurer shall request or require any
			 insured to submit to a polygraph examination unless authorized under the
			 applicable insurance contracts and state law.
(8) No insurer shall deny or fail to adjust
			 an otherwise valid third-party claim because of the failure of the insured to
			 cooperate unless the insurer proves the lack of cooperation is material,
			 substantial, and to the prejudice of the insurer.
Author:
Commissioner of Insurance
Statutory Authority:
Code of Ala.
				  1975
, §§
										27-2-17,
				  27-1-17,
				  27-1-19,
				  27-12-21,
				  27-12-24,
				  27-14-8,
				  27-14-11,
				  27-14-9.