California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 7.5 - Unfair or Deceptive Acts or Practices in the Business of Insurance › Article 1 - Fair Claims Settlement Practices Regulations › Section 2695.7 - Standards for Prompt, Fair and Equitable Settlements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) No insurer shall discriminate in its
				  claims settlement practices based upon the claimant's age, race, gender,
				  income, religion, language, sexual orientation, ancestry, national origin, or
				  physical disability, or upon the territory of the property or person
				  insured.
(b) Upon receiving proof
				  of claim, every insurer, except as specified in subsection
				  2695.7(b)(4)
				  below, shall immediately, but in no event more than forty (40) calendar days
				  later, accept or deny the claim, in whole or in part. The amounts accepted or
				  denied shall be clearly documented in the claim file unless the claim has been
				  denied in its entirety.
(1) Where an insurer
				  denies or rejects a first party claim, in whole or in part, it shall do so in
				  writing and shall provide to the claimant a statement listing all bases for
				  such rejection or denial and the factual and legal bases for each reason given
				  for such rejection or denial which is then within the insurer's knowledge.
				  Where an insurer's denial of a first party claim, in whole or in part, is based
				  on a specific statute, applicable law or policy provision, condition or
				  exclusion, the written denial shall include reference thereto and provide an
				  explanation of the application of the statute, applicable law or provision,
				  condition or exclusion to the claim. Every insurer that denies or rejects a
				  third party claim, in whole or in part, or disputes liability or damages shall
				  do so in writing.
(2) Subject to
				  the provisions of subsection
				  2695.7(k),
				  nothing contained in subsection
				  2695.7(b)(1)
				  shall require an insurer to disclose any information that could reasonably be
				  expected to alert a claimant to the fact that the subject claim is being
				  investigated as a suspected fraudulent claim.
(3) Written notification pursuant to this
				  subsection shall include a statement that, if the claimant believes all or part
				  of the claim has been wrongfully denied or rejected, the claimant may have the
				  matter reviewed by the California Department of Insurance, and shall include
				  the address and telephone number of the unit of the Department which reviews
				  claims practices.
(4) The time
				  frame in subsection
				  2695.7(b) shall
				  not apply to claims arising from policies of disability insurance subject to
				  Section
				  10123.13 of
				  the California Insurance Code, disability income insurance subject to Section
				  10111.2 of
				  the California Insurance Code or mortgage guaranty insurance subject to Section
				  12640.09(a)
				  of the California Insurance Code, and shall not apply to automobile repair
				  bills arising from policies of automobile collision and comprehensive insurance
				  subject to Section
				  560 of the
				  California Insurance Code. All other provisions of subsections
				  2695.7(b)(1), (2), and
				  (3) are applicable.