HARRY HUGHES, Governor

3671

(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;

(6)  FAILING TO MAKE A GOOD FAITH ATTEMPT PROMPTLY,
FAIRLY, OR EQUITABLY TO SETTLE CLAIMS FOR WHICH LIABILITY HAS
BECOME REASONABLY CLEAR;

(7)  COMPELLING INSUREDS TO INSTITUTE LITIGATION TO
RECOVER AMOUNTS DUE UNDER AN INSURANCE POLICY BY OFFERING