tions). These minimum standards are all
basically protections for each individual
presenting a claim to an insurer, whether
an insured or third-party claimant.
Practically speaking, the unfair settlement practices legal schemes enacted
by each state define certain required actions as well as prohibited conduct which
constitutes “unfair” claims practices that
must be avoided.
With that in mind, none of the states’
legal authorities concerning unfair claims
settlement practices are identical, but
the states’ legal standards operate under
certain common themes of required and
unfair practices:
1. File and record documentation;
2. Required claim communications;
3. Disclosure and representation of
coverage provisions;
4. Standards for prompt investigations;
and
5. Standards for prompt, fair and
equitable settlements.
Every claims representative likely considers the insurer’s general duty of good faith and fair dealing when they
receive notice of a new claim, or at least
they should. But what is “fair” when it
comes to handling property and casualty
claims? Unfortunately, the answer could
be different in each of the 50 states. On
one hand, each state has provided a starting point for that consideration by issuing either a statutory or regulatory legal
standard advancing required and unfair
actions or practices in handling and settling property and casualty claims.
Most states utilize some version or por-
tion of the National Association of Insur-
ance Commissioners (“NAIC”) Model
Unfair Claims Settlement Practices Act
or Model Unfair Property/Casualty Set-
tlement Practices Regulations. However,
each state has its own modification or
specialization of those model legal au-
thorities, or has enacted its own unique
laws in order to accomplish the same goal
or purpose.
Generally, the purpose of these laws is
to set forth minimum standards for the
investigation and disposition of property
and casualty claims under insurance contracts (utilizing the purpose set out by
NAIC in the model statutes and regula-
9 Ways to Handle
P&C Claims Fairly
By George V. Pilat, Esq. and Terry L. Williams, Esq.
