Rhode Island Code of Regulations › Title 230 - Department of Business Regulation › Chapter 20 - Insurance › Subchapter 40 - Claims › Part 1 - Unfair Life, Accident and Health Claims Settlement Practices (230-RICR-20-40-1) › Section 230-RICR-20-40-1.4 - Claims Practices

Current through June 14, 2024
A. Every insurer,
				  upon receiving due notification of a claim shall, within fifteen (15) days of
				  the notification, provide necessary claim forms, instructions and reasonable
				  assistance so the insured can properly comply with company requirements for
				  filing a claim.
B. Upon receipt of
				  proof of loss from a claimant, the insurer shall begin any necessary
				  investigation of the claim within fifteen (15) days.
C. The insurer's standards for claims
				  processing shall be such that notice of claim or proof of loss submitted
				  against one policy issued by that insurer shall fulfill the insured's
				  obligation under any and all similar policies issued by that insurer and
				  specifically identified by the insured to the insurer to the same degree that
				  the same form would be required under any similar policy. If additional
				  information is required to fulfill the insured's obligation under similar
				  policies, the insurer may request the additional information. When it is
				  apparent to the insurer that additional benefits would be payable under an
				  insured's policy upon additional proofs of loss, the insurer shall communicate
				  to and cooperate with the insured in determining the extent of the insurer's
				  additional liability.
D. The
				  insurer shall affirm or deny liability on claims within a reasonable time and
				  shall offer payment within thirty (30) days of affirmation of liability if the
				  amount of the claim is determined and not in dispute. If portions of the claim
				  are in dispute, the insurer shall tender payment for those portions that are
				  not disputed within thirty (30) days.
E. With each claim payment, the insurer shall
				  provide to the insured an Explanation of Benefits that shall include the name
				  of the provider or services covered, dates of service, and a reasonable
				  explanation of the computation of benefits.
F. An insurer may not impose a penalty upon
				  any insured for noncompliance with insurer requirements for precertification
				  unless such penalty is specifically and clearly set forth in the
				  policy.
G. If a claim remains
				  unresolved for thirty (30) days from the date proof of loss is received, the
				  insurer shall provide the insured or, when applicable, the insured's
				  beneficiary, with a reasonable written explanation for the delay. In credit,
				  mortgage and assigned accident/health claims, the notice shall be provided to
				  the debtor/insured or medical provider in addition to the insured. If the
				  investigation remains incomplete, the insurer shall, forty-five (45) days from
				  the date of initial notification and every forty-five (45) days thereafter,
				  send to the claimant a letter setting forth the reasons additional time is
				  needed for investigation.
H. The
				  insurer shall acknowledge and respond within fifteen (15) days to any written
				  communications relating to a pending claim.
I. When a claim is denied, written notice of
				  denial shall be sent to the claimant within fifteen (15) days of the
				  determination. The insurer shall reference the policy provision, condition or
				  exclusion upon which the denial is based.
J. No insurer shall deny a claim upon
				  information obtained in a telephone conversation or personal interview with any
				  source unless the telephone conversation or personal interview is documented in
				  the claim file.
K. Insurers
				  offering cash settlements of first party long-term disability income claims,
				  except in cases where there is a bona fide dispute as to the coverage for, or
				  amount of, the disability, shall develop a present value calculation of future
				  benefits (with probability corrections for mortality and morbidity) 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.
L. No insurer shall indicate to a
				  first party claimant on a payment draft, check or in any accompanying letter
				  that said payment is "final" or "a release" of any claim unless the policy
				  limit has been paid or there has been a compromise settlement agreed to by the
				  first party claimant and the insurer as to coverage and amount payable under
				  the policy.
M. No insurer shall
				  withhold any portion of any benefit payable as a result of a claim on the basis
				  that the sum withheld is an adjustment or correction for an overpayment made on
				  a prior claim arising under the same policy unless:
a. The insurer has in its files clear,
				  documented evidence of an overpayment and written authorization from the
				  insured permitting the withholding procedure, or
b. The insurer has in its files clear,
				  documented evidence that:
1. The overpayment
				  was clearly erroneous under the provisions of the policy and if the overpayment
				  is not the subject of a reasonable dispute as to facts;
2. The error that resulted in the payment is
				  not a mistake of the law;
3. The
				  insurer has notified the insured within six (6) months of the date of the
				  error, except that in instances of error prompted by representations or
				  nondisclosures of claimants or third parties, the insurer notified the insured
				  within fifteen (15) days after the date the evidence of discovery of such error
				  is included in its file. For the purpose of this rule, the date of the error
				  shall be the day on which the draft for benefits is issued; and
4. The notice stated clearly the nature of
				  the error and the amount of the overpayment.