Utah Admin. Code R590-191-8 - Unfair Claim Settlement Practices

The commissioner finds that the following acts or general business practices are unfair claim settlement practices and are misleading, deceptive, unfairly discriminatory, overreaching, or an unreasonable restraint on competition:

(1) concealing from or failing to fully disclose to a claimant a benefit, limitation, exclusion, coverage, or other relevant provision of a contract or policy under which a claim is presented;

(2) denying or threatening to deny a claim, rescinding, canceling, or threatening to rescind or cancel coverage under a policy for a reason that is not clearly described in the contract or policy as a reason for denial, cancellation, or rescission;

(3) refusing to settle a claim without conducting a reasonable investigation;

(4) refusing to provide a written basis for denying a claim upon demand of a claimant;

(5) failing to provide a claimant with a written explanation of the evidence of an investigation or the claim file materials supporting a denial of a claim based on misrepresentation or fraud, if misrepresentation or fraud is the basis for the denial;

(6) compensating an employee, producer, or contractor an amount based on savings to the insurer due to reducing or denying a claim;

(7) making a claim settlement to a claimant without a statement or explanation that describes the coverage under which the settlement is made and how the settlement amount was calculated;

(8) failing to settle a claim following receipt of a proof of loss if liability is reasonably clear to influence another claim settlement under another portion of the policy or under another policy;

(9) advising a claimant not to obtain the services of an attorney or other advocate, or suggesting a claimant will receive less money if an attorney is used to:

(a) pursue a claim; or

(b) advise on the merits of a claim;

(10) misleading a claimant about applicable statutes of limitation;

(11) issuing a check or a draft in partial settlement that contains language that releases an insurer from total liability;

(12)

(a) a policy issued before May 5, 2008, that fails to pay interest at the legal rate, under Title 15, Chapter 1, Interest, on an amount that is overdue;

(b) a claim is overdue if not settled within 15 days of completing the investigation; and

(13) a policy issued on or after May 5, 2008, that fails to pay interest under Section 31A-22-428.

Notes

Utah Admin. Code R590-191-8

Amended by Utah State Bulletin Number 2023-17, effective 8/22/2023