HARRY HUGHES, Governor                                    1629

WHICH HAS A MAIN OFFICE IN THIS STATE OR COVERING PERSONS WHO
RESIDE OR WORK WITHIN THIS STATE.

(2) THIS SECTION DOES NOT APPLY TO REINSURANCE,
WORKMEN'S COMPENSATION, OR SURETY.

(C)  THE FOLLOWING ACTIONS BY AN INSURER OR NONPROFIT HEALTH
SERVICE PLAN ARE UNFAIR CLAIM SETTLEMENT PRACTICES AND ARE
VIOLATIONS OF THIS SECTION:

(1)  MISREPRESENTING PERTINENT FACTS OR INSURANCE
POLICY PROVISIONS RELATING TO THE CLAIM AT ISSUE;

(2)  REFUSING TO PAY A CLAIM FOR AN ARBITRARY OR
CAPRICIOUS REASON BASED ON ALL AVAILABLE INFORMATION;

(3)  ATTEMPTING TO SETTLE A CLAIM ON THE BASIS OF AN
APPLICATION WHICH IS ALTERED WITHOUT NOTICE TO, OR THE KNOWLEDGE

OR CONSENT OF, THE INSURED;

(4)  FAILING TO INCLUDE WITH ANY CLAIM PAID TO AN
INSURED OR BENEFICIARY A STATEMENT SETTING FORTH THE COVERAGE
UNDER WHICH PAYMENT IS BEING MADE;

(5)  FAILING TO SETTLE A CLAIM PROMPTLY WHENEVER
LIABILITY IS REASONABLY CLEAR, UNDER ONE PORTION OF A POLICY IN
ORDER TO INFLUENCE SETTLEMENTS UNDER OTHER PORTIONS OF THE
POLICY; OR

(6)  FAILING PROMPTLY UPON REQUEST TO PROVIDE A
REASONABLE EXPLANATION OF THE BASIS FOR A DENIAL OF A CLAIM.

(D)  THE FOLLOWING ACTIONS BY AN INSURER OR NONPROFIT HEALTH
SERVICE PLAN, IF COMMITTED WITH SUCH FREQUENCY AS TO INDICATE A
GENERAL BUSINESS PRACTICE, ARE UNFAIR CLAIM SETTLEMENT PRACTICES
AND ARE VIOLATIONS OF THIS SECTION:

(1)  MISREPRESENTING PERTINENT FACTS OR INSURANCE
POLICY PROVISIONS RELATING TO THE COVERAGES AT ISSUE;

(2)  FAILING TO ACKNOWLEDGE AND ACT WITH REASONABLE
PROMPTNESS ON COMMUNICATIONS REGARDING 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 BASED ON ALL AVAILABLE INFORMATION;

(5)  FAILING TO AFFIRM OR DENY COVERAGE OF CLAIMS
WITHIN A REASONABLE TIME AFTER PROOF OF LOSS STATEMENTS HAVE BEEN
COMPLETED;