Oklahoma Administrative Code › Title 260 - Office of Management and Enterprise Services › Chapter 65 - Construction and Properties › Subchapter 1 - Construction Contracting › Section 260:65-1-9 - Prequalification of insurance carriers, bonding companies and surety companies

Current through Vol. 41, No. 20, July 1, 2024
(a) Pursuant to 61
				O.S., Section 204A.(11), the Department shall prequalify as good and sufficient
				insurance carriers, bonding companies and surety companies using the following
				criteria:
(1) The insurance carrier, bonding
				company or surety company must be licensed to do business in the State of
				Oklahoma pursuant to 61 O.S., Section 134.
(2) The insurance carrier, bonding company or
				surety company must have prior experience with insuring or bonding construction
				projects within the State of Oklahoma.
(3) The insurance carrier, bonding company or
				surety company cannot have been deemed in default by the State of Oklahoma in
				connection with prior construction insurance or bonds on State construction
				projects.
(4) The insurance
				carrier, bonding company or surety company shall not have a prior history of
				committing the following unfair claims settlement practices:
(A) Not attempting in good faith to
				effectuate prompt, fair and equitable settlement of claims or demands submitted
				in which liability has become reasonably clear.
(B) Compelling claimants or obligees, without
				just cause, to institute suits to recover amounts due under the insurance
				policy, insurance contract or bond by offering substantially less than the
				amounts ultimately recovered in suits brought by them or refusing to make an
				offer, when such claimants or obligees have made claims for amounts reasonably
				similar to the amounts ultimately recovered.
(C) Failing to fully disclose to claimants or
				obligees benefits, coverages, or other provisions of any insurance policy,
				insurance contract or bond, when such benefits, coverages or other provisions
				are pertinent to a claim.
(D)
				Knowingly misrepresenting to claimants or obligees pertinent facts, policy or
				bond provisions relating to the coverages at issue.
(E) Failing to adopt and implement reasonable
				standards for prompt investigations of claims or demands on bonds arising under
				its insurance policy, insurance contract or bonds.
(F) Except where there is a time limit
				specified in the policy or bond, making statements, written or otherwise, which
				require a claimant or obligee to give written notice of loss or proof of loss
				within a specified time limit and which seek to relieve the company of its
				obligations if such a time limit is not complied with unless the failure to
				comply with such time limit prejudices an insurer's or bonding company's
				rights.
(G) Requesting a claimant
				or obligee to sign a release that extends beyond the subject matter that gave
				rise to the claim or demand payment.
(H) Failing to promptly pay claims that have
				no reasonably apparent defect or impropriety.
(I) Failing to notify the insured or obligee
				in writing within 30 calendar days of receipt of claim or demand that the claim
				is defective and/or lacks substantiating documentation, providing the insured
				or obligee reasons or basis for the determination.
(J) Issuing checks or drafts in partial
				settlement of a claim or demand with language which releases an insurer, surety
				company, or bonding company from its total liability.
(K) Colluding in any way with other parties
				to a construction claim or dispute in an effort to jointly steer a decision
				against the State, including but not limited to sharing legal counsel with the
				Contractor.
(5) An
				insurance carrier that has received a notice to cease and desist from the
				Oklahoma Insurance Department within the previous five years shall not be
				eligible.
(6) A bonding company
				shall demonstrate an "A" rating as determined by an insurance bond rating
				company acceptable to the Director.