The Insurance Fair Conduct Act addressed unfair insurance practices in Washington.
The Insurance Fair Conduct Act is legislation that gave people who were denied insurance coverage or payment of claims the right to sue the insurance provider in Washington. Unfair insurance business practices were also addressed in the provisions. Enacted by Washington in 2007, this bill created procedures for claimants, or persons making a claim under the insurance policy, suing insurance companies and imposed penalties on insurers in violation of the act's provisions.
Enacted Laws
The Insurance Fair Conduct Act was enacted as two chapters in the revised code of Washington. Chapter 48.30, section 10 addressed remedies and penalties for insurance companies using unfair business practices. Chapter 48.30, section 15 cited court authority for violations and penalties for denials for insurance coverage and payment that are considered unreasonable. This section also provides the length of time an insurer has to address a denial of claim action before the court system becomes officially involved.
Unfair Practices
According to Chapter 48.30, section 10 of the Washington code, no person working in the business of insurance can use deceptive methods in insurance practices or against competing companies. Unreasonably denying coverage or payment of claim is also prohibited. This section gave the Washington Insurance Commissioner the ability to define what business practices are unfair. The commissioner is required to furnish a explanation and cite all the facts used in determining the legality of the business method under scrutiny. If an insurance company appeals the commissioner's decision, this statement is used as evidence in the superior court's review of the case.
Unreasonable Denial
Chapter 48.30, section 10 of the Washington statues provides that any person who is denied a claim or payment under an insurance policy without due reason can sue the insurer in the superior court. The person wishing to file must send a notice stating the basis for action to the insurance company and the Washington Office of the Insurance Commission 20 days before starting an action in court. If the insurer does not settle the matter within 20 days, the claimant can proceed with a court case without any further notification.
Penalites
An insurer found to be engaging in unfair business practices can be given a cease-and-desist order from the insurance commissioner. If the insurer continues to use the method 10 days after receiving the order, the commissioner can fine the insurer up to $250 for each violation. The commissioner can take further action if necessary, at the determination of the courts. A claimant who was unreasonably denied coverage or payment can sue the insurer for damages, attorney fees and other costs from the lawsuit.
Exemptions
The Insurance Fair Conduct Act does not apply to medical insurance claims. Even if medical services are part of an insurance policy that falls under this act, like a homeowner's policy, health claims still are not considered. These laws also do not apply to someone who is making a claim against another person's insurance policy, as may happen in car insurance. The notice of intent to sue must be sent to the insurer and commissioner by the specified time period, or the claimant risks having the lawsuit dismissed.
Tags: Fair Conduct, Insurance Fair, Insurance Fair Conduct, business practices, Chapter section, coverage payment, insurance policy
