Relating to disclosures by liability insurers and policyholders to third-party claimants; providing an administrative penalty.
The legislation aims to enhance transparency and facilitate the claims process for individuals asserting claims against policyholders, thereby potentially expediting legal proceedings. This change may reduce the barriers faced by claimants in obtaining necessary information, allowing for a more informed pursuit of claims. Failure to comply with the disclosure requirements can result in an administrative penalty of up to $500, thereby imposing a financial incentive for insurers to adhere to the law and maintain ethical business practices.
House Bill 1682 pertains to the disclosure requirements set forth for liability insurers and policyholders when interacting with third-party claimants. The bill mandates that insurers must provide detailed information about liability policies upon written request from claimants asserting a claim that may be covered under the policy in question. This requirement includes the provision of a sworn statement that outlines essential policy details, such as the insurer's name, the insured parties, coverage limits, and any possible policy defenses that may be relevant to the claim. Furthermore, insurers are obligated to comply within 30 days of receipt of the request.
One point of contention surrounding HB 1682 could stem from the burden it imposes on insurance companies regarding compliance and the potential for administrative penalties. Insurers and policyholders may express concerns about the practicality of gathering and disclosing such comprehensive information within the stipulated timeframe. Another area of debate may center around balancing the claimant's right to information against the insurers' need to protect certain policy details that may be sensitive or that could affect their defense strategies in liability claims.