3 CCR 702-5-1-14-4 - Rules
A. Timely Decisions
and Payment of Benefits
1. Penalties
a. All insurers authorized to write property
and casualty insurance policies in Colorado, shall make a decision on claims
and/or pay benefits due under the policy within sixty (60) days after receipt
of a valid and complete claim unless there is a reasonable dispute between the
parties concerning such claim, and provided the insured has complied with the
terms and conditions of the policy of insurance.
b. If an insurer fails to make a decision
and/or pay benefits due under the policy within sixty (60) days after a valid
and complete claim has been received, and there is not a reasonable dispute
between the parties, and the insured has complied with the terms and conditions
of the policy of insurance, the Commissioner of Insurance may impose the
following penalties to be paid by the insurer to the insured:
(1) If the claim is $100.00 or less, the
penalty shall not be more than $20.00;
(2) If the claim is more than $100.00, the
penalty shall be 8 percent annual interest on the amount of benefits due,
computed from the latest of the time a valid and complete claim is received,
the reasonable dispute was resolved, or the insured complied with the terms and
conditions of the policy, until the time the benefits due are paid by the
insurer.
c. In addition
to such penalties payable to the claimant, the Commissioner of
Insurance, after notice and hearing, may assess a civil penalty against any insurer of $100.00 per day for each day benefit payments are delayed more than sixty (60) days after a valid and complete filing of the claim unless there is a reasonable dispute between the parties concerning such claim.
2.
Conditions
a. A valid and complete claim is
deemed received by the insurer when:
(1) All
information and documents necessary to prove the insured's claim have been
received by the insurer;
(2) A
reasonable investigation of the information submitted has been completed by the
insurer, in compliance with §
10-3-1104, C.R.S.;
(3) The terms and conditions of the policy
have been complied with by the insured;
(4) Coverage under the policy for the insured
has been established for the claim submitted;
(5) There are no indicators on the claim
requiring additional investigation before a decision can be made;
and/or
(6) All repairs have been
satisfactorily completed and the insured has given authorization to pay;
and/or
(7) Negotiations or
appraisals to determine the value of the claim have been completed;
and/or
(8) Any litigation on the
claim has been finally and fully adjudicated.
b. A reasonable dispute may include, but is
not limited to:
(1) Information necessary to
make a decision on the claim has not been submitted or obtained;
(2) Conflicting information is submitted or
obtained and additional investigation is necessary;
(3) The insured is not in compliance with the
terms and conditions of the policy;
(4) Coverage under the policy for the loss
claimed has not been determined;
(5) Indicators are present in the application
or submission of the claim and additional investigation is necessary;
(6) Litigation is commenced on the claim;
or
(7) Negotiations or appraisals
are in process to determine the value of a claim.
3. A good faith offer by the
insurer to the insured within sixty (60) days after the receipt of a valid and
complete claim satisfies the requirements under this regulation.
4. If claims for benefits are processed by a
third party administrator or other entity acting on behalf of the insurer, or
if the insured is represented by a third party, the failure of the third party
to comply with the terms of the policy or this regulation, shall be the failure
of the insurer or insured respectively.
5. In all actions initiated under this
regulation, the insured shall have the burden of proving to the Commissioner of
Insurance that he/she submitted a valid and complete claim to the
insurer.
6. The insurer shall have
the burden of proving to the Commissioner of Insurance that a reasonable
dispute existed.
7. If it is
determined that benefits are due to the insured, the insurer must issue a
payment to the insured within sixty (60) days of a valid and complete claim
being received, if all the conditions in the definition herein are
met.
8. In the event of a
significant catastrophe resulting in multiple claims, an insurer may notify the
Commissioner of Insurance of the nature and extent of the catastrophe and
request a deviation or exemption from this regulation.
B. Reasonable Investigation
1. The Commissioner of Insurance recognizes
that the scope of an investigation can be determined, in part, to be reasonable
based on the terms and conditions of the policy and the facts and circumstances
of each claim. It may include, but is not limited to:
a. Reports from police or other law or fire
enforcement authorities;
b. Scene
investigations;
c. Photographs,
videotaped evidence;
d.
Surveillance information;
e.
Statements or reports from the insureds, claimants, other parties, witnesses,
or anyone who may have knowledge of elements of the claim;
f. Repair estimates;
g. Reports from relevant experts;
h. Credit reports and financial
information;
i. Information on
prior, concurrent or subsequent claims; or
j. Other relevant information.
2. Documentation that a reasonable
investigation has been conducted shall be maintained in the claim file. Such
documentation may include, but is not limited to:
a. Adjuster's log notes;
b. Copies of written
communications;
c. Written reports
used in the investigation of a claim;
d. Status reports;
e. Evidence of payments; or
f. Other relevant information.
3. When an investigation is
incomplete or is otherwise continued and the insurer has not paid the claim
within the time required under section 4.A.1. above, the insurer shall
immediately notify the insured or the insured's representative, if applicable,
of the reason(s) the claim has not been paid. Additionally, if the claim is not
paid within the time requirement under section 4.A.1., above, the insurer
shall, every thirty (30) days thereafter, send to the insured or the insured's
representative a letter setting forth the reason(s) additional time is needed
for investigation. This requirement is not intended to alter any terms of the
contract between the insurer and insured regarding their respective rights,
duties, and obligations and the law involving such matters.
4. If the claim has not been paid because an
investigation is underway, the insurer shall document in the claim file the
actions being taken to investigate the claim and the efforts being made to
promptly conclude the investigation.
5. The claim file documentation required by
this regulation will be reviewed by the Division of Insurance during an
investigation of a complaint or during a market conduct examination to
determine if the requirements of §
10-3-1104(1)(h),
C.R.S. and this regulation have been met.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.