Ill. Admin. Code tit. 50, § 919.70 - Required Claims Practices - Life, Accident and Health Companies
a) Required
Practices.
1) Insurance companies shall
utilize the following guidelines to search for additional policies or insurance
coverages on the life of an insured upon notification of death of the insured.
Companies selling group life insurance policies or credit life insurance
policies for which the company does not maintain records of the certificate
holders shall be exempt from the requirements of this subsection (a)(1).
A) Upon submission of a death claim form
pursuant to an insurance contract, insurers shall conduct a search for other
policies on the decedent's life.
B)
The company shall investigate additional policy files identified by the search,
for which liability is not immediately verified, and complete a determination
of liability no later than 6 months following the claim filing date.
C) Where such other policies exist, the
insurer shall notify the policy owner (if different than the insured) and the
beneficiary and arrange for payment pursuant to the policies.
D) Insurers shall adopt a written claim
processing standard and methodology that will allow the company to process a
death or endowment or other claim being presented against a life insurance or
accidental death or dismemberment policy.
E) The company, as a part of its claim
processing standard and methodology, shall inquire for every claim filed with
the company for death benefits about other names by which the insured may have
been known, such as maiden name, hyphenated name, nickname, derivative form of
first and middle name or an alias. If the filer of the claim form includes such
additional name information on the claim form or if the company otherwise knows
about other names by which the insured may have been known, the company shall
include this information as a part of its search criteria to determine whether
additional policies exist.
F) Claim
records shall be maintained that demonstrate that the insurer has followed the
written claim processing standard and methodology required by this subsection
(a)(1).
2) If a claim
remains unresolved for 45 days from the date it is reported, the company shall
provide the insured or, when applicable, the insured's beneficiary, with a
reasonable written explanation for the delay. In credit or mortgage claims, the
notice must be provided to the debtor/insured in addition to the policyholder.
Notice of availability of the Department of Insurance shall accompany the
written explanation to the insured beneficiary.
3) If a company is under contract for direct
filing of claims either with a provider or another carrier on behalf of the
insured, the requirement for acknowledgment of claims or notice requirements
are waived provided the insured has otherwise received prior notice of such
arrangements. If a claim remains unresolved for more than 90 days from the date
the administrator provides notice to the company, the notice of delay, as
specified in subsection(a)(1), shall be required. Nothing in this Section shall
waive the written notice requirement for denial of a claim.
4) A disability claim settlement on a lump
sum basis shall be accompanied with a written explanation of the basis of the
settlement including a comparison of the different modes of
settlement.
b) Improper
Practices or Procedures.
1) No company shall
settle a claim involving both a covered and non-covered condition, on a
percentage basis of contributing loss, unless said percentage is reasonable
under the circumstances and the insured is provided with written explanation.
The basis for settlement must be maintained in the file.
2) No company shall undertake any activity
that has the effect of misrepresenting policy provisions or otherwise unduly
influencing the insured to settle a disability claim on a lump sum
basis.
Notes
Amended at 28 Ill. Reg. 9253, effective July 1, 2004
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