Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-30 - Trade practices › THE UNFAIR CLAIMS SETTLEMENT PRACTICES REGULATION › Section 284-30-330 - Specific unfair claims settlement practices defined

Current through Register Vol. 24-14, July 15, 2024
The following are hereby defined as unfair methods of
				  competition and unfair or deceptive acts or practices of the insurer in the
				  business of insurance, specifically applicable to the settlement of
				  claims:
(1) Misrepresenting pertinent
				facts or insurance policy provisions.
(2) Failing to acknowledge and act reasonably
				promptly upon communications with respect to claims arising under insurance
				policies.
(3) Failing to adopt and
				implement reasonable standards for the prompt investigation of claims arising
				under insurance policies.
(4)
				Refusing to pay claims without conducting a reasonable investigation.
(5) Failing to affirm or deny coverage of
				claims within a reasonable time after fully completed proof of loss
				documentation has been submitted.
(6) Not attempting in good faith to
				effectuate prompt, fair and equitable settlements of claims in which liability
				has become reasonably clear. In particular, this includes an obligation to
				promptly pay property damage claims to innocent third parties in clear
				liability situations. If two or more insurers share liability, they should
				arrange to make appropriate payment, leaving to themselves the burden of
				apportioning liability.
(7)
				Compelling a first party claimant to initiate or submit to litigation,
				arbitration, or appraisal to recover amounts due under an insurance policy by
				offering substantially less than the amounts ultimately recovered in such
				actions or proceedings.
(8)
				Attempting to settle a claim for less than the amount to which a reasonable
				person would have believed he or she was entitled by reference to written or
				printed advertising material accompanying or made part of an
				application.
(9) Making a claim
				payment to a first party claimant or beneficiary not accompanied by a statement
				setting forth the coverage under which the payment is made.
(10) Asserting to a first party claimant a
				policy of appealing arbitration awards in favor of insureds or first party
				claimants for the purpose of compelling them to accept settlements or
				compromises less than the amount awarded in arbitration.
(11) Delaying the investigation or payment of
				claims by requiring a first party claimant or his or her physician to submit a
				preliminary claim report and then requiring subsequent submissions which
				contain substantially the same information.
(12) Failing to promptly settle claims, where
				liability has become reasonably clear, under one portion of the insurance
				policy coverage in order to influence settlements under other portions of the
				insurance policy coverage.
(13)
				Failing to promptly provide a reasonable explanation of the basis in the
				insurance policy in relation to the facts or applicable law for denial of a
				claim or for the offer of a compromise settlement.
(14) Unfairly discriminating against
				claimants because they are represented by a public adjuster.
(15) Failing to expeditiously honor drafts
				given in settlement of claims. A failure to honor a draft within three working
				days after notice of receipt by the payor bank will constitute a violation of
				this provision. Dishonor of a draft for valid reasons related to the settlement
				of the claim will not constitute a violation of this provision.
(16) Failing to adopt and implement
				reasonable standards for the processing and payment of claims after the
				obligation to pay has been established. Except as to those instances where the
				time for payment is governed by statute or rule or is set forth in an
				applicable contract, procedures which are not designed to deliver payment,
				whether by check, draft, electronic funds transfer, prepaid card, or other
				method of electronic payment to the payee in payment of a settled claim within
				fifteen business days after receipt by the insurer or its attorney of properly
				executed releases or other settlement documents are not acceptable. Where the
				insurer is obligated to furnish an appropriate release or settlement document
				to a claimant, it must do so within twenty working days after a settlement has
				been reached.
(17) Delaying
				appraisals or adding to their cost under insurance policy appraisal provisions
				through the use of appraisers from outside of the loss area. The use of
				appraisers from outside the loss area is appropriate only where the unique
				nature of the loss or a lack of competent local appraisers make the use of
				out-of-area appraisers necessary.
(18) Failing to make a good faith effort to
				settle a claim before exercising a contract right to an appraisal.
(19) Negotiating or settling a claim directly
				with any claimant known to be represented by an attorney without the attorney's
				knowledge and consent. This does not prohibit routine inquiries to a first
				party claimant to identify the claimant or to obtain details concerning the
				claim.
Statutory Authority:
					 RCW
					  48.02.060 and
					 48.30.010. 09-11-129 (Matter No. R
					 2007-08), §
											284-30-330, filed 5/20/09,
					 effective 8/21/09. Statutory Authority:
					 RCW
					  48.02.060,
					 48.44.050 and
					 48.46.200. 87-09-071 (Order R
					 87-5), §
											284-30-330, filed 4/21/87.
					 Statutory Authority:
					 RCW
					  48.02.060 and
					 48.30.010. 78-08-082 (Order R
					 78-3), §
											284-30-330, filed 7/27/78,
					 effective 9/1/78.