Missouri Code of State Regulations › Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE › Division 100 - Insurer Conduct › Chapter 1 - Improper or Unfair Claims Settlement Practices › Section 20 CSR 100-1.050 - Standards for Prompt, Fair, and Equitable Settlement of Claims

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This amendment updates and clarifies
				  standards for prompt, fair and equitable settlements regarding claims under
				  health benefit plans, and clarifies how interest is applied to death benefit
				  claims. This amendment also updates language regarding estimates as stated in
				  the NAIC model.
PURPOSE: This rule effectuates or aids in the
				  interpretation of sec tions 375.1007(3) and 375.1007(4), RSMo.
(1) Standards for Prompt, Fair, and Equitable
				Settlements Applicable to All Insurers, (excluding electronically submitted
				claims under health benefit plans subject to sections
				376.383
				to
				376.384,
				RSMo).
(A) Within fifteen (15) working days
				after the submission of all forms necessary to establish the nature and extent
				of any claim, the first-party claimant shall be advised of the acceptance or
				denial of the claim by the insurer. No insurer shall deny any claim on the
				grounds of a specific policy provision, condition or exclusion unless reference
				to that provision, condition or exclusion is included in the denial. The denial
				must be given to the claimant in writing and the claim file of the insurer
				shall contain a copy of the denial.
(B) If a claim is denied for reasons other
				than those described in subsection (1)(A), an appropriate notation shall be
				made in the claim file of the insurer.
(C) If the insurer needs more time to
				determine whether a claim should be accepted or denied, it shall so notify the
				first-party claimant within the time otherwise allotted for acceptance or
				denial, giving the reasons more time is needed. If the investigation remains
				incomplete, the insurer, within forty-five (45) days from the date of the
				initial notification and every forty-five (45) days after, shall send the
				claimant a letter setting forth the reasons additional time is needed for
				investigation.
(D) No insurer shall
				fail to settle any first-party claim on the basis that responsibility for
				payment should be assumed by others except as otherwise may be provided by
				policy provisions.
(E) No insurer
				shall continue negotiations or settlement of any claim directly with a claimant
				who is neither an attorney nor represented by an attorney until the claimant's
				rights may be affected by a statute of limitations or a policy time limit,
				without giving the claimant written notice that the time limit may be expiring
				and may affect the claimant's rights. The notice shall be given to first-party
				claimants thirty (30) days and to third-party claimants sixty (60) days before
				the date on which the time limit may expire.
(F) No insurer shall make any statement which
				indicates that the rights of a third-party claimant may be impaired if a form
				of release is not completed within a given period of time unless the statement
				is given for the purpose of notifying the third-party claimant of the provision
				of a statute of limitations.
(G)
				All insurers offering cash settlements of first-party long-term disability
				income claims shall develop a present value calculation of future benefits
				utilizing contingencies, such as mortality, morbidity, and interest rate
				assumptions, etc., appropriate to the risk. A copy of the amount so calculated
				shall be given to the insured and signed by him/her at the time a settlement is
				entered into, and a copy of the amount with the calculations shall be given to
				the insured at the time the insured is first approached regarding settlement.
				This acknowledgment of advice of probable value of the contract, together with
				a copy of the calculations used to arrive at the amount, shall be maintained in
				the claim file whenever a cash settlement is accepted by the insured. This
				regulation does not apply to the settlement of liability insurance claims or
				structured settlements made in settlement of liability insurance claims. The
				furnishing of a present value calculation to an insured is not construed to
				imply or impose any liability on the insurer.
(H) shall include interest at nine percent
				(9%) per annum, unless another rate has been agreed upon, from the date of
				death of the insured until the date the claim is paid. For death benefit claims
				on all life insurance policies, consistent with section
				408.020,
				interest accrues at the rate of nine percent (9%) per annum, unless a different
				interest rate is specified in the policy, from the date of death of the insured
				until the date the claim is paid if the insurer fails to pay the policy
				proceeds within thirty (30) days of submission of proof of death and receipt of
				all necessary proofs of loss. Interest at the same rate continues to accrue on
				any unpaid interest not included with the death benefit payment.