§ 27-304. Unfair claim settlement practices -- General business practice

   It is an unfair claim settlement practice and a violation of this subtitle for an insurer or nonprofit health service plan, when committed with the frequency to indicate a general business practice, to:

   (1) misrepresent pertinent facts or policy provisions that relate to the claim or coverage at issue;

   (2) fail to acknowledge and act with reasonable promptness on communications about claims that arise under policies;

   (3) fail to adopt and implement reasonable standards for the prompt investigation of claims that arise under policies;

   (4) refuse to pay a claim without conducting a reasonable investigation based on all available information;

   (5) fail to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;

   (6) fail to make a prompt, fair, and equitable good faith attempt, to settle claims for which liability has become reasonably clear;

   (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;

   (15) refuse to pay a claim for an arbitrary or capricious reason based on all available information;

   (16) fail to meet the requirements of Title 15, Subtitle 10B of this article for preauthorization for a health care service;

   (17) fail to comply with the provisions of Title 15, Subtitle 10A of this article; or

   (18) fail to act in good faith, as defined under § 27-1001 of this title, in settling a first-party claim under a policy of property and casualty insurance.

HISTORY: An. Code 1957, art. 48A, § 230A; 1997, ch. 35, § 2; 1998, ch. 111, § 2; ch. 112, § 2; ch. 755; 1999, ch. 71; 2007, ch. 150.