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ENGROSSED HOUSE
BILL NO. 4279 By: Sneed and Phillips of the
House
and
Quinn of the Senate
An Act relating to insurance; amending 36 O.S. 2021,
Section 1250.5, which relates to acts by an insurer
constituting an unfair claim settlement pract ice;
modifying requirement applicability ; 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 p rovisions
are pertinent to a claim;
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2. Knowingly misrepresenting to claimants pertinent facts or
policy provisions relating to coverages at issue;
3. Failing to adopt and implement reasonable standards for
prompt investigations of claims arising under it s insurance policies
or insurance contracts;
4. Not attempting in good faith to effectuate prompt, fair and
equitable settlement of claims submitte d 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 requ ire a claimant to
give written notice of loss or proof of loss within a specified time
limit and which seek to relieve t he company of its obligation s if
the time limit is not complied with unless the failure to comply
with the time limit prejudices the rig hts of an insurer. Any policy
that specifies a time limit covering damage to a r oof due to wind or
hail must include a provision allowing 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;
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8. Requesting a claimant to s ign a release that extends beyond
the subject matter that gave rise to the claim payment;
9. Issuing checks, drafts or electronic payment in partial
settlement of a loss or c laim under a specified coverage which
contain language releasing an insurer or i ts 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 necessary unless the health insurer or
administrator, as define d in Section 1442 of this title, first
obtains an opinion from any provider of health care licensed b y law
and preceded by a medical examination or claim review, to the effect
that the services, procedures or supplies for which payment is being
denied were not medically necessary. Upon written request of a
claimant, treating physician, or hospital, the o pinion shall be set
forth in a written report, prepared and signed by the re viewing
physician. The report shall detail which specific services,
procedures, or supplies were not medically necessary, in the opinion
of the reviewing physician, and an explana tion of that conclusion.
A copy of each report of a reviewing physician sha ll 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
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to practice medicine and surgery, osteopathic medicine, po diatric
medicine, dentistry, chiropractic, or optometry, pursuant to the
state licensing provisions o f Title 59 of the Oklahoma Statutes;
11. Compensating a reviewing physician , as defined in paragraph
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 F raud
Prevention Act;
13. Compelling, without just cause, policyholders to i nstitute
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 t hem, when the
policyholders have made claims for amounts reasonably similar to the
amounts ultimately recovered;
14. Failing to maintain a complete re cord of all complaints
which it has received during the preceding three (3) years or since
the date of its last financial examination conducted or accepted by
the Commissioner, whic hever time is longer. This record shall
indicate the total number of compl aints, their classification by
line of insurance, the nature of each 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 ex pressing a grievance;
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15. Requesting a refund of all or a portion of a payment of a
claim made to a clai mant more than twelve (12) months or health 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 care provider, or
b. if the claimant or health care p rovider 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 health benefit
plan, or its agent, has provided a prea uthorization 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 claimant 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 f ailed 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, restrict or otherwise
terminate a policy of life insura nce, or charge a different rate
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based upon the lawful travel destination of an applicant or insured
as provided in Section 4024 of this title ; or
18. a. As a health insurer that provi des pharmacy benefits or
a pharmacy benefits manager that administers phar macy
benefits for a health plan, fail ing to include any
amount paid by an enrollee or on behalf of an enrollee
by another person when calculating t he enrollee's
total contribution to an out-of-pocket maximum,
deductible, copayment, coinsurance or other cos t-
sharing requirement.
b. If under federal law, application of subparagraph a of
this paragraph would result in health savings account
ineligibility under Section 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 the 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 subparagraph a of this paragraph shall
apply regardless of whether the minimum deduct ible has
been satisfied.
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SECTION 2. This act shall become effect ive November 1, 2022.
Passed the House of Representatives the 23rd day of March, 2022.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2022.
Presiding Officer of the Senate