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SENATE FLOOR VERSION
April 11, 2022
ENGROSSED HOUSE
BILL NO. 3495 By: McEntire and Phillips of
the House
and
Montgomery of the Senate
An Act relating to insurance; amending 36 O.S. 2021,
Section 1250.5, which relates to acts by an insurer
constituting unfair claim settl ement practice;
modifying acts considered unfair claim settlement
practices; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 1250.5, is
amended to read as follows:
Section 1250.5 Any of the following acts by an insurer, if
committed in violation of Section 1250.3 of this title, constitutes
an unfair claim settlement practice exclusive of paragraph 16 of
this section which shall be applicable solely to health benefit
plans:
1. Failing to fully disclose to first -party claimants,
benefits, coverages, or other provisions of any insurance policy or
insurance contract when the benefits, coverages or other provisions
are pertinent to a claim;
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2. Knowingly misrepresenting to claimants pertinent facts or
policy provisions relating to coverages at i ssue;
3. Failing to adopt and implement reasonable standards for
prompt investigations of claims arising under i ts insurance policies
or insurance contracts;
4. Not attempting in good faith to effectuate prompt, fair and
equitable settlement of claims su bmitted in which liability has
become reasonably clear;
5. Failing to comply with the provisions of Section 1219 of
this title;
6. Denying a claim for failure to exhibit the property without
proof of demand and unfounded refusal by a claimant to do so;
7. Except where there is a time limit specified in the policy,
making statements, written or otherwise, which req uire a claimant to
give written notice of loss or proof of loss within a specified time
limit and which seek to relieve the company of its obli gations if
the time limit is not complied with unless the failure to comply
with the time limit prejudices the ri ghts of an insurer. Any policy
that specifies a time limit covering damage to a roof due to wind or
hail must allow the filing of claims after the first anniversary but
no later than twenty -four (24) months after the date of the loss, if
the damage is not evident without inspection;
8. Requesting a claimant to sign a release that extends beyond
the subject matter that gav e rise to the claim payment;
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9. Issuing checks, drafts or electronic payment in partial
settlement of a loss or claim under a specified coverage which
contain language releasing an insurer or its insured from its total
liability;
10. Denying payment to a claimant on the grounds that services,
procedures, or supplies provided by a treating physician or a
hospital were not medically necess ary unless the health insurer or
administrator, as defined in Section 1442 of this title, first
obtains an opinion from any provider of health care licensed by law
and preceded by a medical examination or claim review, to the effect
that the services, proc edures or supplies for which payment is being
denied were not medically necessary. Upon written request of a
claimant, treating physician, or hospital, the opinion shall be set
forth in a written report, prepared and signed by the reviewing
physician. The report shall detail which specific services,
procedures, or supplies were not medically necessary, in the opinion
of the reviewing physician, and an explanation of that conclusion.
A copy of each report of a reviewing physician shall be mailed by
the health insurer, or administrator, postage prepaid, to the
claimant, treating physician or hospital requesting same within
fifteen (15) days after receipt of the written request. As used in
this paragraph, "physician" means a person holding a valid license
to practice medicine and surgery, osteopathic medicine, podiatric
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medicine, dentistry, chiropractic, or optometry, pursua nt to the
state licensing provisions of Title 59 of the Oklahoma Statutes;
11. Compensating a reviewing physician, as defined in paragr aph
10 of this section, on the basis of a percentage of the amount by
which a claim is reduced for payment;
12. Violating the provisions of the Health Care Fraud
Prevention Act;
13. Compelling, without just cause, policyholders to institute
suits to recover amounts due under its insurance policies or
insurance contracts by offering substantially less than the amounts
ultimately recovered in suits brought by them, when the
policyholders have made claims for amounts reasonably similar to the
amounts ultimately recovered;
14. Failing to maintain a complete record of all complaints
which it has received during the preceding t hree (3) years or since
the date of its last financial examination conducted or accepted by
the Commissioner, whichever time is longer. This record shall
indicate the total number of complaints, their classification by
line of insurance, the nature of eac h complaint, the disposition of
each complaint, and the time it took to process each complaint. For
the purposes of this paragraph, "complaint" means any written
communication primarily expressing a grievance;
15. Requesting a refund of all or a portion of a payment of a
claim made to a claimant more than twelve (12) months or a health
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care provider more than twenty-four (24) eighteen (18) months after
the payment is made. This paragraph shall not apply:
a. if the payment was made because of fraud committed by
the claimant or health car e provider, or
b. if the claimant or health care provider has otherwise
agreed to make a refund to the insurer for overpayment
of a claim;
16. Failing to pay, or requesting a refund of a payment, for
health care services covered under the policy if a heal th benefit
plan, or its agent, has provided a preauthorization or
precertification and verification of eligibility for those health
care services. This paragraph shall not apply if:
a. the claim or payment was made because of fraud
committed by the claima nt or health care provider,
b. the subscriber had a preexisting exclusion under the
policy related to the service provided, or
c. the subscriber or employer failed to pay the
applicable premium and all grace periods and
extensions of coverage have expired;
17. Denying or refusing to accept an application for life
insurance, or refusing to renew, cancel, re strict or otherwise
terminate a policy of life insurance, or charge a different rate
based upon the lawful travel destination of an applicant or insured
as provided in Section 4024 of this title; or
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18. As a health insurer that provides pharmacy benefits or a
pharmacy benefits manager that administers pharmacy benefits for a
health plan, failing to include any amount paid by an enrollee or on
behalf of an enrollee by anoth er person when calculating the
enrollee's total contribution to an out -of-pocket maximum,
deductible, copayment, coinsurance or other cost-sharing
requirement.
However, if, under federal law, application of this paragraph
would result in health savings account ineligibility under Sect ion
223 of the federal Internal Revenue Code, as amended , this
requirement shall apply only for health savings accounts with
qualified high-deductible health plans with respect to the
deductible of such a plan after t he enrollee has satisfied the
minimum deductible, except with respect to items or services that
are preventive care pursuant to Section 223(c)(2)(C) of the federal
Internal Revenue Code, as amended, in which case the requirements of
this paragraph shall apply regardless of whether the minimum
deductible has been satisfied.
SECTION 2. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
April 11, 2022 - DO PASS