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3 AAC 26.040. Required claim communication

(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a first-party claim must:

(1) within 10 working days after receipt of notification of a claim, give written acknowledgement to the first-party claimant identifying the person handling the claim, including the person's name, address, telephone number, the firm name, and the file number; payment of the claim within 10 working days after notification is satisfactory acknowledgement; provision of necessary claim forms, written instructions, and assistance as required in (3) of this subsection is satisfactory acknowledgement; notification of a claim to an agent constitutes notification to the principal;

(2) within 15 working days after receipt, make an appropriate reply to all other communications from a first-party claimant which reasonably indicates that a response is expected; receipt of a communication by an agent constitutes receipt by the principal;

(3) upon receipt of notification of a claim, promptly provide necessary claim forms, instructions, and assistance so that the first-party claimant is able to comply with legal, policy, or contract provisions and other reasonable requirements.

(b) Any person transacting a business of insurance who participates in the investigations, adjustment, negotiation, or settlement of a third-party claim must:

(1) within 10 working days after notification of the claim from a third-party claimant, give written acknowledgement to the third-party claimant, identifying the person handling the claim, including the person's name, address, phone number, the firm name, and the file number; payment of the claim within 10 working days after notification is satisfactory acknowledgement; provision of necessary claim forms, written instructions, and assistance as required in (3) of this subsection is satisfactory acknowledgement; notification of a claim to an agent constitutes notification to the principal;

(2) within 15 working days after receipt, make an appropriate reply to all other communications from a third-party claimant which reasonably indicates that a response is expected; receipt of a communication by an agent constitutes receipt by the principal;

(3) upon receipt of notification of a claim from a third-party, promptly provide necessary claim forms, instructions and assistance that is reasonable so that the third-party claimant is able to comply with any reasonable requirement;

(4) within 10 working days after notification of a claim received from or on behalf of an insured, give written acknowledgement to the insured, identifying the person handling the claim, including the person's name, mailing address, telephone number, the firm name, and the file number; notification of a claim to an agent constitutes notification to the principal.

(c) If notification of a claim is received in the form of a suit, a demand for arbitration, application for adjudication, or other pleading, any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim shall comply with the rules of that particular forum rather than this section only so long as the claim is pending in that forum.

(d) This section does not apply to an insurance claim subject to AS 21.36.495 or other health insurance claim for which the insurer complies with AS 21.36.495 .

History: Eff. 5/6/89, Register 110; am 9/15/2004, Register 171; am 8/20/2016, Register 219

Authority: AS 21.06.090

AS 21.36.125

AS 21.36.495

Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031 , redesignated former AS 21.36.350 as AS 21.36.125 (c). As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125 (b)(6), to the authority citation that follows 3 AAC 26.040, deleting the citation to former AS 21.36.350 to reflect that the authority citation already includes a citation to AS 21.36.125 , the section where material formerly in AS 21.36.350 was relocated.

3 AAC 26.050. Standards for prompt investigation of claims

(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim shall promptly undertake the investigation of a claim after notification of the claim is received, and shall complete the investigation within 30 working days, unless the investigation cannot reasonably be completed using due diligence.

(b) Unless the notification of a claim is in the form of a suit, demand for arbitration, application for adjudication, or other pleading, or the claim becomes the subject of such litigation within 30 working days, the person transacting the business of insurance shall give written notification to the claimant that specifically states the need and reasons for additional investigative time and also specifies the additional time required to complete the investigation. That notification shall be given no later than the 30th working day after notification of the claim is first received.

(c) This section does not apply to an insurance claim subject to AS 21.36.495 or other health insurance claim for which the insurer complies with AS 21.36.495 .

History: Eff. 5/6/89, Register 110; am 9/15/2004, Register 171; am 8/20/2016, Register 219

Authority: AS 21.06.090

AS 21.36.125

AS 21.36.495

Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031 , redesignated former AS 21.36.350 as AS 21.36.125 (c). As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125 (b)(6), to the authority citation that follows 3 AAC 26.050, deleting the citation to former AS 21.36.350 to reflect that the authority citation already includes a citation to AS 21.36.125 , the section where material formerly in AS 21.36.350 was relocated.

3 AAC 26.060. Disclosure and representation of coverage provisions

Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim:

(1) shall fully disclose to a first-party claimant all relevant benefits and other provisions of coverage under which a claim may be covered;

(2) may not deny a claim on the ground that the first-party claimant failed to exhibit the property without written proof of demand and the unwarranted delay or refusal by the first-party claimant to do so;

(3) may not, except where there is a time limit specified in the coverage document, make statements, written or otherwise, requiring a first-party claimant to give written notice of loss, statement of claim, proof of loss, or similar affidavit within a specified time limit;

(4) may not request a first-party claimant to agree to a compromise or enter into a release that extends beyond the subject matter that gives rise to the claim payment; and

(5) may not issue a check, draft, warrant or other claim payment in partial settlement of a loss or claim under a specified coverage, which contains language that releases or compromises the issuer or its principal from any other liability.

History: Eff. 5/6/89, Register 110

Authority: AS 21.06.090

AS 21.36.125

Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031 , redesignated former AS 21.36.350 as AS 21.36.125 (c). As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125 (b)(6), to the authority citation that follows 3 AAC 26.060, deleting the citation to former AS 21.36.350 to reflect that the authority citation already includes a citation to AS 21.36.125 , the section where material formerly in AS 21.36.350 was relocated.

3 AAC 26.070. Standards for prompt, fair, and equitable settlements

(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a first-party claim:

(1) shall advise a first-party claimant in writing of the acceptance or denial of the claim within 15 working days after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss unless another time limit is specified in the insurance policy, insurance contract, or other coverage document; payment of the claim within this time limit constitutes written acceptance; a written denial of the claim must state the specific provisions, conditions, exclusions, and facts upon which the denial is based; if additional time is needed to determine whether the claim should be accepted or denied, written notification giving the reasons that more time is needed shall be given to the first-party claimant within the deadline. While the investigation remains incomplete, additional written notification shall be provided 45 working days from the initial notification, and no more than every 45 working days thereafter giving the reasons that additional time is necessary to complete the investigation; if there is a reasonable basis supported by specific information for suspecting that a first-party claimant has fraudulently caused or wrongfully contributed to the loss, and the basis is documented in the claim file, this reason need not be included in the written request for additional time to complete the investigation or the written denial; however, within a reasonable time for completion of the investigation and after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss, the first-party claimant shall be advised in writing of the acceptance or denial of the claim;

(2) shall, within 30 working days after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss, pay those portions of the claim not in dispute;

(3) may not fail to settle first-party claims on the basis that responsibility for payment must be assumed by others, except as may be expressly provided by provisions of the insurance policy, insurance contract, or other coverage document.

(b) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a third-party claim may not make any statement that indicates that the rights of a third-party claimant may be impaired if a form, compromise, release, or similar document is not completed within a given period of time, unless the statement is given for the purpose of notifying the third-party claimant of an applicable statute of limitation.

(c) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim may not continue negotiations for settlement of the claim directly with any claimant who is neither an attorney nor represented by an attorney to a time when the claimant's rights might be affected by a statute of limitation, coverage provision, or other time limit, unless written notice is given to the claimant clearly stating the time limit that might be expiring and its effect upon the claim; such a written notice shall be given at least 60 calendar days before the date on which the time limit might expire.

(d) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim shall pay a judgment or settlement of the claim including advances, partial settlements, or similar payments

(1) with a negotiable check payable in cash to the payee upon presentation to a bank located in this state; if the check is not drawn upon a bank having a physical location in this state, the check must be payable in cash upon presentation to at least one bank having a physical location in this state;

(2) by electronic funds transfer; or

(3) by prepaid card product, if approved by the director.

(e) The provisions of (a), (b), and (c) of this section do not apply to an insurance claim subject to AS 21.36.495 or other health insurance claim for which the insurer complies with AS 21.36.495 .

History: Eff. 5/6/89, Register 110; am 9/15/2004, Register 171; am 8/20/2016, Register 219

Authority: AS 21.06.090

AS 21.36.125

AS 21.36.495

AS 21.96.030

Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031 , redesignated former AS 21.36.350 as AS 21.36.125 (c), and renumbered former AS 21.89.030 as AS 21.96.030 . As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125 (b)(6), to the authority citation that follows 3 AAC 26.070, so that the citation to former AS 21.89.030 now refers to the renumbered statute, AS 21.96.030 . In addition, the regulations attorney deleted the citation to former AS 21.36.350 , to reflect that the authority citation already includes a citation to AS 21.36.125 , the section where material formerly in AS 21.36.350 was relocated.

3 AAC 26.075. Arbitration

An insurer may include an arbitration provision in an insurance contract subject to the following:

(1) the insurer and the insured must agree to the arbitration provision;

(2) the arbitration provision must describe the manner for

(A) initiating the arbitration process; and

(B) appointing the arbitrator; the descriptions required in (A) of this paragraph and this subparagraph may be accomplished by reference to a specific arbitration entity or arbitration rules;

(3) the insurer and the insured must agree to the venue of an arbitration proceeding before the proceeding begins; if no agreement on the venue of an arbitration proceeding is reached, the insurer, insured, or both jointly may request the director to make the venue determination after a hearing;

(4) a participant in an arbitration proceeding must have the option of participating by telephone;

(5) except as otherwise provided in AS 21.96.020 (f), AS 09.43 must govern the agreement to arbitrate; and

(6) the insurer must retain in the insurer's records documentation to establish the insurer or the insurer's agent specifically informed the insured, before the insured entering into the insurance contract, of

(A) the arbitration provision in the insurance contract; and

(B) the right of a participant in an arbitration proceeding to participate by telephone; the insurer shall retain the documentation required under this paragraph for the longer of four years or until the arbitration provision is no longer in effect or contested.

History: Eff. 8/20/2016, Register 219

Authority: AS 21.06.090

AS 21.36.125

AS 21.42.120

AS 21.42.130

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