Kentucky Administrative Regulations › Title 806 - PUBLIC PROTECTION CABINET - DEPARTMENT OF INSURANCE › Chapter 12 - Trade Practices and Frauds › Section 806 KAR 12:092 - Unfair life and health insurance claims settlement practices

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				304.2-165,
				304.3-200,
				304.3-210,
				304.12-010,
				304.12-220,
				304.12-230,
				304.12-235,
				304.29-341,
				304.32-270,
				304.38-200,
				342.325
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				304.2-110 provides that the Executive
				Director of Insurance may make reasonable regulations necessary for or as an
				aid to the effectuation of any provision of the Kentucky insurance code.
				KRS
				304.32-250 provides that the executive
				director may promulgate reasonable administrative regulations which he deems
				necessary for the proper administration of KRS 304.32.
				KRS
				304.38-150 provides that the Executive
				Director of Insurance may promulgate reasonable administrative regulations
				which he deems necessary for the proper administration of KRS 304.38. This
				administrative regulation defines unfair life and health insurance claims
				settlement practices.
Section 1.
			 Definitions. As used in this administrative regulation:
(1) "Agent" means any person authorized to
			 represent an insurer with respect to a claim;
(2) "Beneficiary" means, for the purpose of
			 life and health insurance, the party entitled to receive the proceeds or
			 benefits occurring under the policy in lieu of the insured;
(3) "Claimant" means an insured, the
			 beneficiary, or legal representative (e.g., administrator, executor, guardian,
			 or similar person) of the insured, including a member of the insured's
			 immediate family designated by the insured (the insurer may require written
			 proof of the designation), making the claim under a policy;
(4) "Claim file" shall mean any retrievable
			 electronic file, paper file, or combination of both;
(5) "Executive Director" means the executive
			 director of the Kentucky Office of Insurance;
(6) "Documentation" includes, but is not
			 limited to, all pertinent communications, transactions, notes, work papers,
			 claim forms, bills and, explanation of benefits forms relative to the
			 claim;
(7) "Good faith" means an
			 honest intention to abstain from taking any unconscientious advantage of
			 another, together with absence of all information, notice, or benefit or belief
			 of facts which render a transaction unconscientious;
(8) "Insured" means, for the purpose of life
			 or health insurance, the party named on a policy, certificate, or contract as
			 the individual with legal rights to the benefits provided by the policy,
			 certificate, or contract;
(9)
			 "Insurer" means any insurer, fraternal benefit society, nonprofit hospital,
			 medical, surgical, dental, and health service corporations and prepaid dental
			 plan organization, including agents and third party administrators;
(10) "Investigation" means all activities of
			 an insurer directly or indirectly related to the determination of liabilities
			 under coverages afforded by a policy, certificate or contract;
(11) "Notification of claim" means a notice
			 to the insurer that a loss has occurred or is about to be incurred;
(12) "Policy", "certificate" or "contract"
			 include any contract of an insurer providing indemnity or other coverage for
			 medical, health or hospital goods and services, but do not include contracts of
			 workers' compensation;
(13) "Proof
			 of loss" means written proofs, such as claim forms, medical bills, medical
			 authorizations, or other reasonable evidence of the claim that is ordinarily
			 required of all insureds or beneficiaries submitting the claims;
(14) "Reasonable explanation" means that
			 sufficient information shall be included in the explanation of benefits as to
			 enable the insured or beneficiary to compare the allowable benefits with policy
			 provisions and determine whether proper payment has been made;
(15) Delay or denial of a claim is "without
			 reasonable foundation" when there is no rational relationship between the
			 reasons for the delay or denial of a claim and the policy, certificate, or
			 contract, applicable law, or applicable facts;
(16) "Written communications" include all
			 correspondence, regardless of source or type, that is materially related to the
			 handling of the claim.