UNOFFICIAL COPY 25 RS BR 318
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AN ACT relating to unfair claims settlement practices. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
ď˘Section 1. KRS 304.12-230 is amended to read as follows: 3
It is an unfair claims settlement practice for any person to commit or perform any of the 4
following acts or omissions: 5
(1) Misrepresenting pertinent facts or insurance policy provisions relating to coverages 6
at issue; 7
(2) Failing to acknowledge and act reasonably promptly upon communications with 8
respect to claims arising under insurance policies; 9
(3) Failing to adopt and implement reasonable standards for the prompt investigation of 10
claims arising under insurance policies; 11
(4) Refusing to pay claims without conducting a reasonable investigation based upon 12
all available information; 13
(5) Failing to affirm or deny coverage of claims within a reasonable time after proof of 14
loss statements have been completed; 15
(6) Not attempting in good faith to effectuate prompt, fair, and equitable settlements of 16
claims in which liability has become reasonably clear; 17
(7) Compelling insureds to institute litigation to recover amounts due under an 18
insurance policy by offering substantially less than the amounts ultimately 19
recovered in actions brought by such insureds; 20
(8) Attempting to settle a claim for less than the amount to which a reasonable person 21
[man] would have believed he or she was entitled by reference to written or printed 22
advertising material accompanying or made part of an application; 23
(9) Attempting to settle claims on the basis of an application which was altered without 24
notice to, or knowledge or consent of the insured; 25
(10) Making claims payments to insureds or beneficiaries not accompanied by statement 26
setting forth the coverage under which the payments are being made; 27 UNOFFICIAL COPY 25 RS BR 318
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(11) Making known to insureds or claimants a policy of appealing from arbitration 1
awards in favor of insureds or claimants for the purpose of compelling them to 2
accept settlements or compromises less than the amount awarded in arbitration; 3
(12) Delaying the investigation or payment of claims by requiring an insured, claimant, 4
or the physician of either to submit a preliminary claim report and then requiring 5
the subsequent submission of formal proof of loss forms, both of which 6
submissions contain substantially the same information; 7
(13) Failing to promptly settle claims, where liability has become reasonably clear, 8
under one (1) portion of the insurance policy coverage in order to influence 9
settlements under other portions of the insurance policy coverage; 10
(14) Failing to promptly provide a reasonable explanation of the basis in the insurance 11
policy in relation to the facts or applicable law for denial of a claim or for the offer 12
of a compromise settlement; 13
(15) Failing to comply with the decision of an independent review entity to provide 14
coverage for a covered person as a result of an external review in accordance with 15
KRS 304.17A-621, 304.17A-623, and 304.17A-625; 16
(16) Knowingly and willfully failing to comply with the provisions of KRS 304.17A-17
714 when collecting claim overpayments from providers;[ or] 18
(17) Knowingly and willfully failing to comply with the provisions of KRS 304.17A-19
708 on resolution of payment errors and retroactive denial of claims; or 20
(18) Altering an independent adjuster's, staff adjuster's, or public adjuster's report in 21
connection with a homeowner's insurance claim without providing the insured 22
the following for each alteration that has the effect of reducing or materially 23
altering the estimate of loss or any portion of the estimate of loss: 24
(a) A detailed description of the alteration that was made; 25
(b) A detailed explanation of why the alteration was made; 26
(c) The name of the person who ordered the alteration; and 27 UNOFFICIAL COPY 25 RS BR 318
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(d) The date the alteration was made. 1