Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-124 - STANDARDS FOR LIFE, ACCIDENT AND HEALTH INSURANCE CLAIMS › Section 482-1-124-.04 - Claims Practices

Current through Register Vol. 42, No. 9, June 28, 2024
(1) Every
			 insurer, upon receiving notification of a claim shall, within fifteen (15) days
			 of the notification, mail or otherwise provide necessary claim forms,
			 instructions or reasonable assistance so the claimant can properly comply with
			 the insurer's reasonable requirements for filing a claim.
(2) Upon receipt of proof of loss from a
			 claimant, the insurer shall begin processing the claim within fifteen (15)
			 days.
(3) The insurer's standards
			 for claims processing shall be such that notice of claim or proof of loss
			 submitted against one policy issued by that insurer shall fulfill the
			 claimant's obligation under any and all other similar policies issued by that
			 insurer and specifically identified by the claimant to the insurer to the same
			 degree that the same form would be required under any similar policy. If
			 additional information is required to fulfill the claimant's obligation under
			 similar policies, the insurer may request the additional information. If
			 multiple providers are involved, the insurer shall request any and all
			 available claim information from all known providers at one time. When the
			 insurer determines that additional benefits or proceeds would be payable under
			 an insured's policy upon additional proofs of loss, the insurer shall
			 communicate to and cooperate with the claimant in determining the extent of the
			 insurer's additional liability.
(4)
			 As to life insurance claims, upon receipt of proof of loss from a claimant, the
			 insurer shall affirm or deny liability, or inform the claimant that the claim
			 is being investigated, within the time set forth within the life insurance
			 policy not to exceed sixty (60) days. If the amount of the claim is determined
			 and not in dispute, payment should be made within a reasonable time. If
			 portions of the claim are in dispute, the insurer shall tender payment for
			 those portions that are not disputed within sixty (60) days of the date the
			 insurer determines those portions of the claim which are not disputed. If the
			 investigation remains incomplete, the insurer shall, forty-five (45) days from
			 the date of initial notification and every forty-five (45) days thereafter,
			 send to the claimant a letter stating that the claim is still under
			 investigation.
(5) With each health
			 insurance claim payment, the insurer shall provide to the claimant an
			 explanation of benefits that shall include the name of the provider and
			 services covered, dates of service, and a reasonable explanation of the
			 computation of benefits if applicable.
(6) Reimbursement of health claims shall be
			 handled as required by Section
			 27-1-17,
Code of Ala.
			 1975
.
(7) An insurer
			 may not impose a penalty upon any claimant under a health insurance policy for
			 noncompliance with insurer requirements for precertification unless such
			 penalty is specifically and clearly set forth in the policy.
(8) A reply shall be made within twenty (20)
			 days on all other pertinent written communications from a claimant which
			 requests a response.
(9) When a
			 claim is denied, written notice of denial shall be sent to the claimant within
			 fifteen (15) days of the determination that the claim should be denied. The
			 insurer shall state the reasons why the claim has been denied.
(10) No insurer shall deny a claim upon
			 information obtained in a telephone conversation or personal interview with any
			 source unless the telephone conversation or personal interview is documented in
			 the claim file.
(11) Insurers
			 offering cash settlements of first party long-term disability income claims,
			 except in cases where there is a bona fide dispute as to the coverage for, or
			 amount of, the disability, shall develop a present value calculation of future
			 benefits (with probability corrections for mortality and morbidity) utilizing
			 contingencies appropriate to the risk including, but not limited to mortality,
			 morbidity, and interest rate assumptions, etc. A copy of the amount so
			 calculated shall be given to and signed by the claimant at the time a
			 settlement is entered into.
(12)
			 Insurers shall not indicate to a claimant on a payment draft, check or in any
			 accompanying letter that said payment is "final" or "a release" of any claim
			 unless the policy limit has been paid or there has been a compromise settlement
			 agreed to by the claimant and the insurer as to coverage and amount payable
			 under the policy.
(13) Insurers
			 shall not withhold any portion of any benefit payable to a claimant under a
			 health insurance policy as a result of a claim on the basis that the sum
			 withheld is an adjustment or correction for an overpayment made on a prior
			 claim arising under the same policy unless both of the following occurs:
(a) The insurer has in its files clear,
			 documented evidence of an overpayment and written authorization from the
			 claimant permitting such withholding procedure.
(b) The insurer has in its files clear,
			 documented evidence that all of the following occurs:
1. The overpayment was clearly erroneous
			 under the provisions of the policy and if the overpayment is not the subject of
			 a reasonable dispute as to facts.
2. The error that resulted in the payment is
			 not a mistake of the law.
3. The
			 insurer has notified the claimant within six (6) months of the date of the
			 error, except that in instances of error prompted by representations or
			 nondisclosures of claimants or third parties, the health insurer notified the
			 claimant within fifteen (15) days after the date the evidence of discovery of
			 such error is included in its file. For the purpose of this rule, the date of
			 the error shall be the day on which the draft for benefits is issued.
4. Such notice stated clearly the nature of
			 the error and the amount of the overpayment.
Author:
Commissioner of Insurance