Ch. 35

1997 LAWS OF MARYLAND

(7) COMPEL INSUREDS TO INSTITUTE LITIGATION TO RECOVER
AMOUNTS DUE UNDER POLICIES BY OFFERING SUBSTANTIALLY LESS THAN THE
AMOUNTS ULTIMATELY RECOVERED IN ACTIONS BROUGHT BY THE INSUREDS;

(8) ATTEMPT TO SETTLE A CLAIM FOR LESS THAN THE AMOUNT TO
WHICH A REASONABLE PERSON WOULD EXPECT TO BE ENTITLED AFTER STUDYING
WRITTEN OR PRINTED ADVERTISING MATERIAL ACCOMPANYING, OR MADE PART
OF, AN APPLICATION;

(9) ATTEMPT TO SETTLE A CLAIM BASED ON AN APPLICATION THAT IS
ALTERED WITHOUT NOTICE TO, OR THE KNOWLEDGE OR CONSENT OF, THE
INSURED;

(10) FAIL TO INCLUDE WITH EACH CLAIM PAID TO AN INSURED OR
BENEFICIARY A STATEMENT OF THE COVERAGE UNDER WHICH THE PAYMENT IS
BEING MADE;

(11) MAKE KNOWN TO INSUREDS OR CLAIMANTS A POLICY OF
APPEALING FROM ARBITRATION AWARDS IN ORDER TO COMPEL INSUREDS OR
CLAIMANTS TO ACCEPT A SETTLEMENT OR COMPROMISE LESS THAN THE AMOUNT
AWARDED IN ARBITRATION;

(12) DELAY AN INVESTIGATION OR PAYMENT OF A CLAIM BY
REQUIRING A CLAIMANT OR A CLAIMANT'S LICENSED HEALTH CARE PROVIDER TO
SUBMIT A PRELIMINARY CLAIM REPORT AND SUBSEQUENTLY TO SUBMIT FORMAL
PROOF OF LOSS FORMS THAT CONTAIN SUBSTANTIALLY THE SAME INFORMATION;

(13) FAIL TO SETTLE A CLAIM PROMPTLY WHENEVER LIABILITY IS
REASONABLY CLEAR UNDER ONE PART OF A POLICY, IN ORDER TO INFLUENCE
SETTLEMENTS UNDER OTHER PARTS OF THE POLICY;

(14) FAIL TO PROVIDE PROMPTLY A REASONABLE EXPLANATION OF THE
BASIS FOR DENIAL OF A CLAIM OR THE OFFER OF A COMPROMISE SETTLEMENT; OR

(15) FAIL TO MEET THE REQUIREMENTS OF TITLE 19, SUBTITLE 13 OF
THE HEALTH - GENERAL ARTICLE FOR PREAUTHORIZATION FOR A HEALTH CARE
SERVICE.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 230A (d).

In item (1) of this section, the reference to the "claim" at issue is added to
conform to § 27-303(1) of this subtitle.

Defined terms: "Insurer" § 1-101
"Person" § 1-101
"Policy" § 1-101

27-305. PENALTIES.

(A) FOR VIOLATION OF § 27-303.

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