Arkansas Administrative Code › Agency 054 - Arkansas Insurance Department › Rule 054.00.15-005 - Rule 43: Unfair Claims Settlement Practices

Current through Register Vol. 49, No. 6, June, 2024
§ 1.
Purpose
The purpose of this rule is to define certain minimum standards
			 which, if violated with such frequency as to indicate a general business
			 practice, will be deemed to constitute unfair claims settlement practices. Ark.
			 Code Ann. §§
								23-66-201 (1987), et seq., and
			 23-76-103
			 (1987),
			 23-76-119
			 (1987) and
			 23-94-204
			 (Supp. 1987) prohibit insurers, health maintenance organizations and risk
			 retention groups doing business in the State of Arkansas from engaging in
			 unfair claims settlement practices; and provide that, if any insurer or health
			 maintenance organization or risk retention group performs any of the acts or
			 practices proscribed by those sections with such frequency as to indicate a
			 general business practice, then those acts shall constitute an unfair or
			 deceptive act or practice in the business of insurance.
§ 2.
Authority
This rule is issued pursuant to the authority vested in the
			 Commissioner by Ark. Code Ann. §§
								23-61-108
			 (1987),
			 23-66-207
			 (1987),
			 23-76-125 (1987),
			 23-94-107 (Supp. 1987),
			 25-15-202
			 (1987), et seq., and other applicable provisions of Arkansas law.
§ 3.
Applicability and
		  scope
This rule applies to all persons, to all insurance policies and
			 insurance contracts and to all contracts, certificates, subscriber agreements,
			 or other evidences of coverage issued by insurers, health maintenance
			 organizations and risk retention groups, as applicable, except policies of
			 Workers' Compensation and Employer's Liability. This rule is not exclusive, and
			 other acts, not herein specified, may also be deemed to be a violation of Ark.
			 Code Ann. §§
								23-66-201 (1987), et seq., and
			 23-76-103
			 (1987), and
			 23-76-119
			 (1987).
§ 4.
Effective date
The amendments adopted to this Rule and Regulation under Section
			 9(a)(2) and 9(d), related to the advance written notice to claimants of statute
			 of limitations or time period limitations, shall only apply on and after
			 December 1, 2015. All other provisions of Rule and Regulation 43, not amended
			 in 2015, which existed prior to December 1, 2015, shall remain in
			 effect.
§ 5.
Definitions
The definitions of "person," "evidence of coverage," and of
			 "insurance policy or insurance contract" contained in the Trade Practices Act,
			 Ark. Code Ann. §
								23-66-203
			 (1987), and in Ark. Code Ann. §
								23-76-102
			 (1987), shall apply to this regulation and, in addition, where used in this
			 regulation:
(a) "Agent" or
		  "Representative" means any individual, corporation, association, partnership or
		  other legal entity authorized to represent an insurer, health maintenance
		  organization, or risk retention group with respect to a claim;
(b) "Automobile insurance" includes, but is
		  not limited to, insurance as defined under Ark. Code Ann.
		  23-89-301
		  (1987);
(c) "Claimant" means an
		  enrollee, a first party claimant, and/or a third party claimant, and includes
		  such claimant's designated legal representative and includes a member of the
		  claimant's immediate family designated by the claimant;
(d) "Complaint" means a written communication
		  primarily expressing a grievance;
(e) "First party claimant" means an
		  individual, corporation, association, partnership or other legal entity
		  asserting a right to payment or services under an insurance policy or contract,
		  or health care plan arising out of the occurrence of the contingency, loss,
		  injury, or illness covered by such policy, or contract, or plan;
(f) "Insurance Department Complaint" means a
		  written communication regarding a complaint transmitted by the Arkansas
		  Insurance Department;
(g) "Insurer"
		  means any person, or risk retention group licensed or registered to issue or
		  who issues any insurance policy or contract in this State;
(h) "Investigation" means all activities of
		  an insurer directly or indirectly related to determination of liabilities or
		  obligations under coverages afforded by a policy, contract, or health care
		  plan;
(i) "Notification of claim"
		  means any notification, whether in writing or by other means acceptable under
		  the terms of an insurance policy, contract, or health care plan to an insurer
		  or its agent by a claimant, which reasonably apprises the insurer of the facts
		  pertinent to a claim;
(j) "Risk
		  retention group" means a group as defined under Ark. Code Ann. §
		  23-94-102(10) (Supp. 1987);
(k)
		  "Third party claimant" means any individual, corporation, association,
		  partnership or other legal entity asserting a claim against any individual,
		  corporation, association, partnership or other legal entity insured under an
		  insurance policy or insurance contract; and
(l) "Workers' Compensation" includes, but is
		  not limited to, Longshoremen's and Harbor Workers' Compensation.
(m) "Health Carrier" means a health
		  maintenance organization, hospital medical service corporation or a disability
		  insurance company, that issues Health Insurance Contracts as defined in
		  Subsection 5(s) of this rule. For purposes of this rule, unless otherwise
		  stated, the term "Health Carrier" shall include a self-insured governmental or
		  church plan, as well as third party administrators that administer or adjust
		  disability benefits for a disability insurer, hospital medical service
		  corporation, health maintenance organization, self-insured governmental plan or
		  self-insured church plan. A Health Carrier does not include an automobile
		  insurer paying medical or hospital benefits under Ark. Code Ann. §
								23-89-202(1)
		  nor shall it include a self-insured employer health benefits plan. A Health
		  Carrier also does not include any person, company, or organization, licensed or
		  registered to issue or who issues any insurance policy or insurance contract in
		  this State as described in Ark. Code Ann. §§
								23-62-102,
		  23-62-104,
		  23-62-105,
		  23-62-106, and
		  23-62-107
		  providing medical or hospital benefits for accidental injury or
		  disability.
(n) "Health Claimant"
		  means a Health Insured, a provider holding a valid assignment from the Health
		  Insured, or a provider contracted with a Health Carrier, who is claiming a
		  benefit under a Health Insurance Contract.
(o) "Health Claim Processing" or "to process
		  a health claim" means to pay the claim, to deny the claim or to notify the
		  Health Claimant in accordance with Subsection 12(b) and Subsection 13(a) of
		  this rule that the Health Carrier needs additional information to process the
		  Health Claim.
(p) "Health Claim
		  Processing Date" or "Health Claim Payment Date" is the date the Health Carrier
		  transmits or mails its claim payment, claim denial or notice of the need for
		  additional information to the Health Claimant.
(q) "Clean Claim" means a claim for payment
		  of health care expenses that is Submitted on a HCFA 1500, on a UB92, in a
		  format required by the Health Insurance Portability and Accountability Act of
		  1996 ("HIPAA"), or on the carrier's standard claim form with all required
		  fields completed in accordance with the Health Carrier's published claim filing
		  requirements. A Clean Claim shall not include a claim (1) for payment of
		  expenses incurred during a period of time for which premiums are delinquent,
		  (2) for benefits under a Medicare supplement policy if the claim is not
		  accompanied by an explanation of Medicare benefits or the Explanation of
		  Medicare Benefits ("EOMB") has not been otherwise received by the Health
		  Carrier, or (3) for which the Health Carrier needs additional information in
		  order to resolve one or more of the issues listed in Subsection 13(b) of this
		  rule.
(r) "Contracted Provider"
		  means a provider that contracts with a Health Carrier to provide services for
		  "Health Insureds" of such carrier.
(s) "Health Insurance Contract" means a
		  disability insurance policy, a hospital medical service corporation contract, a
		  health maintenance organization contract or a plan document issued or provided
		  by a Health Carrier as defined in Subsection 5(m) of this rule. Health
		  Insurance Contract shall not include a disability income insurance policy, a
		  long-term care contract, a hospital indemnity contract, an accident only
		  contract, or any other form of disability insurance policy that provides a
		  benefit as a result of a sickness or accident that does not directly cover
		  expenses related to health care treatment the insured receives.
(t) "Health Insured" means an individual who
		  is a covered person under a "Health Insurance Contract."
(u) "Health Policyholder" means the person
		  who owns the "Health Insurance Contract" and is responsible to pay premiums for
		  the "Health Insurance Contract."
(v) "Provider" means a physician, hospital or
		  other appropriately licensed health care provider.