Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 6 - General › Section Ins 6.11 - Insurance claim settlement practices

Current through June 24, 2024
(1) PURPOSE. This
			 rule is to promote the fair and equitable treatment of policyholders, claimants
			 and insurers by defining certain claim adjustment practices which are
			 considered to be unfair methods and practices in the business of insurance. The
			 rule implements and interprets applicable statutes including but not limited to
			 ss.
			 601.04(3),
			 601.01(2),
			 and
			 645.41(3),
			 Stats.
(2) SCOPE. This rule applies
			 to the kinds of insurance identified in s.
			 Ins
			 6.75, transacted by insurers as defined in s.
			 600.03(27),
			 Stats., and nonprofit service plans subject to ch. 613, Stats.
(3) UNFAIR CLAIM SETTLEMENT PRACTICES.
(a) Any of the following acts, if committed
			 by any person without just cause and performed with such frequency as to
			 indicate general business practice, shall constitute unfair methods and
			 practices in the business of insurance:
1.
			 Failure to promptly acknowledge pertinent communications with respect to claims
			 arising under insurance policies.
2. Failure to initiate and conclude a claims
			 investigation with all reasonable dispatch.
3. Failure to promptly provide necessary
			 claims forms, instructions and reasonable assistance to insureds and claimants
			 under its insurance policies.
4.
			 Failure to attempt in good faith to effectuate fair and equitable settlement of
			 claims submitted in which liability has become reasonably clear.
5. Failure upon request of a claimant, to
			 promptly provide a reasonable explanation of the basis in the policy contract
			 or applicable law for denial of a claim or for the offer of a compromise
			 settlement.
6. Knowingly
			 misrepresenting to claimants pertinent facts or policy provisions relating to
			 coverages involved.
7. Failure to
			 affirm or deny coverage of claims within a reasonable time after proof of loss
			 has been completed.
8. Failure to
			 settle a claim under one portion of the policy coverage in order to influence a
			 settlement under another portion of the policy coverage.
9. Except as may be otherwise provided in the
			 policy contract, the failure to offer settlement under applicable first party
			 coverage on the basis that responsibility for payment should be assumed by
			 other persons or insurers.
10.
			 Compelling insureds and claimants to institute suits to recover amounts due
			 under its policies by offering substantially less than the amounts ultimately
			 recovered in suits brought by them.
11. Refusing payment of claims solely on the
			 basis of the insured's request to do so without making an independent
			 evaluation of the insured's liability based upon all available
			 information.
12. Failure, where
			 appropriate, to make use of arbitration procedures authorized or permitted
			 under any insurance policy.
13.
			 Adopting or making known to insureds or claimants a policy of appealing from
			 arbitration awards in favor of insureds or claimants for the purpose of
			 compelling them to accept settlements or compromises less than the amount
			 awarded in arbitration.