(a) No person shall commit or perform with such frequency as to indicate a general business practice any of the following:
(1) Knowingly misrepresent pertinent facts or insurance policy provisions relating to the claim at issue;
(2) Refuse to pay a claim for a reason that is arbitrary or capricious based on all available information;
(3) Attempt to settle a claim on the basis of an application which is altered without notice to, or the knowledge or consent of, the insured;
(4) Fail to include with a claim paid to an insured or beneficiary a statement setting forth the coverage under which payment is being made;
(5) Fail to settle a claim promptly whenever liability is reasonably clear under one portion of a policy in order to influence settlements under other portions of the policy; or
(6) Fail promptly upon request to provide a reasonable explanation of the basis for a denial of a claim.
(b) No person shall commit or perform with such frequency as to indicate a general business practice any of the following:
(1) Knowingly misrepresent pertinent facts or insurance policy provisions relating to coverage at issue;
(2) Fail to acknowledge and act reasonably promptly upon communication with respect to claims arising under insurance policies;
(3) Fail to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
(4) Refuse to pay claims without conducting a reasonable investigation;
(5) Fail to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed or after having completed its investigation related to the claims;
(6) Not attempt in good faith to effectuate prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear;
(7) Compel insureds or beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in actions brought by the insureds or beneficiaries;
(8) Attempt to settle a claim for less than the amount to which a reasonable person would believe the insured or beneficiary was entitled by reference to written or printed advertising material accompanying or made part of an application or policy;
(9) Attempt to settle claims on the basis of an application which was materially altered without notice to or knowledge or consent of the insured;
(10) Make claims payments to an insured or beneficiary without indicating the coverage under which each payment is being made;
(11) Make known to insureds or claimants of a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises of less than the amount awarded in arbitration;
(12) Unreasonably delay the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form;
(13) Fail, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such action; or
(14) Make false or fraudulent statements or representations on, or relative to an application for, a policy, for the purpose of obtaining a fee, commission, money, or other benefit from a provider or individual person.
(c) The Commissioner may impose a penalty of up to $1,000 for each violation of subsection (a) of this section or of a regulation promulgated under subsection (a) of this section. The Commissioner may impose a penalty for violations of subsection (b) of this section as provided in § 31-4305 , § 31-2602.24 , § 31-2502.03 , and § 31-1105 .
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