Kansas Administrative Regulations › Agency 40 - INSURANCE DEPARTMENT › Article 1 - GENERAL › Section 40-1-34 - Unfair claims settlement practices

Current through Register Vol. 43, No. 28, July 11, 2024
The national association of insurance commissioners' "unfair
				claims settlement practices model regulation," January 1981 edition, is hereby
				adopted by reference, subject to the following exceptions:
(a) Section 1 is not adopted.
(b) The first sentence of section 2 is not
			 adopted.
(c) In section 2, the
			 phrase "Section 4(9) of the Act" is replaced with the phrase "K.S.A.
			 40-2404, and amendments thereto."
(d) In section 3, the phrase "Section 2 of
			 the Unfair Trade Practice Act" is replaced with the phrase "K.S.A.
			 40-2404, and amendments thereto."
(e) Section 8(d) is not adopted.
(f) Section 8 is amended by the addition of
			 the following subsection: "(e) An insurer shall not attempt to settle a loss
			 with a first party claimant on the basis of a cash settlement which is less
			 than the amount the insurer would pay if repairs were made, other than in total
			 loss situations, unless such amount is agreed to by the insured."
(g) Section 8 is further amended by the
			 addition of the following subsection: "(f) If a claim is denied for reasons
			 other than those described in section 8(a) and is made by any other means than
			 writing, an appropriate notation shall be made in the claim file of the
			 insurer."
(h) Section 8 is further
			 amended by the addition of the following subsection: "(g) Insurers shall not
			 fail to settle first party claims on the basis that responsibility for payment
			 should be assumed by others except as may otherwise be provided by policy
			 provisions."
(i) Section 8 is
			 further amended by the addition of the following subsection: "(h) Insurers
			 shall not continue negotiations for settlement of a claim directly with a
			 claimant who is neither an attorney nor represented by an attorney when the
			 claimant's rights may be affected by a statute of limitations or a policy or a
			 contract time limit, without giving the claimant written notice that the time
			 limit may be expiring and may affect the claimant's rights. Such notice shall
			 be given to first party claimants thirty days and to third party claimants
			 sixty days before the date on which such time limit may expire."
(j) Section 8 is further amended by the
			 addition of the following subsection: "(i) No insurer shall make statements
			 which indicate that the rights of a third party claimant may be impaired if a
			 form or 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."
(k) Section 9(a) is amended by deleting the
			 phrase "first party."
(l) In
			 section 9(a), subsection (1) is amended by replacing the word "insured" with
			 the word "claimant."
(m) In
			 section 9(a), subsection (2) is not adopted by reference and is replaced with
			 the following language: "The insurer may elect to pay a cash settlement, based
			 upon the actual cost, less any deductible provided in the policy, to purchase a
			 comparable automobile including all applicable taxes, license fees and other
			 fees incident to transfer of evidence of ownership of a comparable automobile.
			 Such cost shall be determined by any source or method for determining
			 statistically valid fair market value that meets both of the following
			 criteria:"
"(A) The source or method's
			 database, including nationally recognized automobile evaluation publications,
			 shall provide values for at least eighty-five percent (85%) of all makes and
			 models of private passenger vehicles for the last fifteen (15) model years
			 taking into account the values for all major options for such vehicles; and"
"(B) the source, method, or
			 publication shall provide fair market values for a comparable automobile based
			 on current data available for the local market area as defined in subsection
			 (j)(2)."