Arkansas Administrative Code › Agency 054 - Arkansas Insurance Department › Rule 054.00.00-003 - Rule and Regulations 43 - Unfair Claims Settlement Practices

Current through Register Vol. 49, No. 6, June, 2024
Section 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 as
			 well as to provide minimum standards which govern claims handling procedures of
			 insurers, health maintenance organizations, risk retention groups, and any
			 other persons hereafter defined in this rule, without regard to a general
			 business practice where so specified in this rule. 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.
Section 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), Ark. Code Ann. §
								23-76-125 to
			 enforce Ark. Code Ann. §
								23-76-118(b)(2)
			 related to prohibiting balance billing in Section 6 C (4) of this Rule, and
			 other applicable provisions of Arkansas law.
Section 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). Unless otherwise expressly stated in this Rule, to constitute a
			 violation of any section of this Rule, there shall be required the finding of a
			 pattern or general business practice as described in Ark. Code Ann. §
								23-66-201 (1987), et seq.
Section 4.
Effective
		  date
The effective date of this rule shall be March 1, 2000 for all
			 provisions of this rule except for Sections VI. B. 2. and VI. C. 2. which shall
			 be effective on July 1, 2000.
Section
		  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)
		  "Non-Disability Insurer" means 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 §§
								23-62-101,
		  23-62-102,
		  23-62-104,
		  23-62-105,
		  23-62-106,
		  23-62-107,
		  23-62-107,
		  23-62-108.
		  "Non-Disability Insurer" includes a risk retention group as defined in Ark.
		  Code Ann. §
								23-94-201 as
		  well an automobile liability insurer providing medical and hospital benefits
		  coverage under Ark. Code Ann. §
								23-89-202(1).
(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 Care Insurer" means an insurer
		  that issues policies or contracts providing coverage for expenses associated
		  with the treatment of an illness or injury. For purposes of this regulation,
		  unless otherwise stated, the term "Health Care Insurer" shall include a
		  self-insured governmental or church plan, as well as third party administrators
		  which administer or adjust disability benefits for a health care insurer. A
		  Health Care Insurer 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
		  Care Insurer 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. §§
								23-62-104,
		  23-62-105,
		  23-62-106, and
		  23-62-107
		  providing medical or hospital benefits for accidental injury or
		  disability.
(n) "Health Maintenance
		  Organization" means any person or organization defined as a health maintenance
		  organization under Ark. Code Ann. §
								23-76-102(6).
(o) "Health Care Claimant" means a person who
		  has made a request to a Health Care Insurer or Health Maintenance Organization
		  for a coverage determination, a request for payment of medical benefits, or a
		  request for preauthorization or approval of a health or medical benefit in
		  accordance with the terms of the insurance contract or health care plan of the
		  Health Care Insurer or Health Maintenance Organization. "
(p) "Clean Claim" means a claim by a Health
		  Care Claimant for payment of medical benefits from a Health Care Insurer or
		  Health Maintenance Organization, which is submitted to a Health Care Insurer
		  or-Health Maintenance Organization on a claim form [AIDFORM# Provider &
		  HF1500] with all of the required fields correct and completed in accordance
		  with the filing requirements of the Health Care Insurer or Health Maintenance
		  Organization. A "Clean Claim" does not include the following claims:
(1) a claim which is not received by the
		  Health Care Insurer or Health Maintenance Organization within forty-five (45)
		  calendar days after the date of treatment by the medical provider or clinic,
		  or, if incurred in a hospital or facility, after the date of
		  discharge;
(2) a claim which
		  requires the Health Care Insurer or Health Maintenance Organization to obtain
		  additional information from a provider or Health Care Claimant to initiate
		  claims processing;
(3) a claim
		  which requires the Health Care Insurer or Health Maintenance Organization to
		  obtain information on student eligibility or on over age dependents;
(4) a claim which requires the Health Care
		  Insurer or Health Maintenance Organization to obtain medical records from a
		  provider in order to determine if the services rendered by the provider are
		  covered under the terms of the insurance contract; and
(5) a claim which is related to a Health Care
		  Insurer's or Health Maintenance Organization's investigation of possible
		  fraud.
(q) "Health Care
		  Claim" means a claim by a Health Care Claimant to a Care Insurer or Health
		  Maintenance Organization for a coverage determination, a request for payment of
		  medical benefits, or a request for preauthorization or approval from a Health
		  Care Insurer in accordance with the terms of the Plan.
(r) "Urgent Care Claim" means a Health Care
		  Claim by a Health Care Claimant to a Health Care Insurer or Health Maintenance
		  Organization for medical care or treatment with respect to which the
		  application of the time periods for making non-urgent care determinations could
		  seriously jeopardize the life or health of the Health Care Claimant or the
		  ability of the Health Care Claimant to regain maximum function, or, in the
		  opinion of a physician with knowledge of the claimant's medical condition,
		  would subject the claimant to severe pain that cannot be adequately managed
		  without the care or treatment that is subject of the claim. In addition, any
		  claim that a physician with knowledge of the Health Care Claimant's medical
		  condition determines as claim involving urgent care under this section of the
		  rule shall be treated as a claim involving urgent care.