Rhode Island 2024 Regular Session

Rhode Island House Bill H7974

Introduced
3/5/24  

Caption

Provides insured individuals with a private cause of action under the unfair claims settlement practices act.

Impact

The enactment of H7974 would significantly shift the landscape of insurance law in Rhode Island. By creating a private right of action, insured individuals would have more leverage against insurance companies, potentially leading to increased accountability and responsiveness from insurers. This change may lead to fewer unfair practices and enhance consumer protections, ensuring that individuals can seek damages if they face unjust treatment. Consequently, insurers may need to adapt their claims processing protocols to mitigate the risk of litigation and protect their reputations.

Summary

House Bill 7974 aims to amend the Unfair Claims Settlement Practices Act in Rhode Island by providing insured individuals with a private cause of action against insurance companies that engage in unfair claims practices. This legislative move is geared towards empowering consumers, allowing them to take legal action if they feel wronged by insurance providers. The bill highlights specific misconducts by insurers, such as failure to promptly address claims, misrepresentation of policy provisions, and refusal to acknowledge coverage within a reasonable time frame. These provisions reinforce the expectation of good faith and fair dealing in the processing of insurance claims.

Contention

Nonetheless, the bill is not without controversy. Critics argue that providing a private cause of action may lead to an increase in frivolous lawsuits, placing an undue strain on the legal system and prompting higher insurance premiums. Insurers may raise concerns about the additional compliance burden and costs associated with potentially more litigation. Moreover, there is apprehension regarding the adequacy of existing regulatory measures, suggesting that enhancements to administrative enforcement could be pursued instead of enabling private lawsuits. These sentiments reflect a broader debate on balancing consumer protections with the operational realities of the insurance industry.

Companion Bills

No companion bills found.

Previously Filed As

RI H5496

Unfair Claims Settlement Practices Act

RI H5536

Unfair Claims Settlement Practices Act

RI S0640

Unfair Claims Settlement Practices Act

RI H5418

Unfair Claims Settlement Practices Act

RI H5855

Unfair Claims Practices Act

RI S0925

Unfair Claims Practices Act

RI H5438

Causes Of Action

RI S1098

Causes Of Action

RI S0102

Board Of Medical Licensure And Discipline -- Prompt Processing Of Insurance Claims

RI H5165

Board Of Medical Licensure And Discipline -- Prompt Processing Of Insurance Claims

Similar Bills

No similar bills found.