Section 0780-01-05-.11 - STANDARDS FOR PROMPT, FAIR AND EQUITABLE SETTLEMENTS APPLICABLE TO ALL LIFE INSURERS(1) Every insurer, upon receiving due notification of a claim filed, shall, within thirty (30) days of the notification, provide necessary claim forms, instructions and reasonable assistance so the first party claimant can properly comply with company requirements for filing a claim.(2) Upon receipt of proof of loss from a first party claimant, the insurer shall begin any necessary investigation of the claim within thirty (30) days.(3) The insurer's standards for claims processing shall be such that notice of claim or proof of loss submitted against one policy issued by that insurer shall fulfill the insured's obligation under any and all similar policies issued by that insurer and specifically identified by the insured to the insurer to the same degree that the same form would be required under any similar policy. If additional information is required to fulfill the insured's obligation under similar policies, the insurer may request the additional information. When it is apparent to the insurer that additional benefits would be payable under an insured's policy upon additional proofs of loss, the insurer shall communicate to and cooperate with the insured in determining the extent of the insurer's additional liability. Life insurers shall also operate in accordance with T.C.A. §§ 56-7-3401 through 56-7-3406 by searching for persons as defined in T.C.A. § 56-7-3403(8) against the social security death master file (DMF) and notifying beneficiaries about potential claims such persons may have against the company.(4) The insurer shall affirm or deny liability on claims within a reasonable time and shall offer payment within thirty (30) days of affirmation of liability if the amount of the claim is determined and not in dispute. If portions of the claim are in dispute, the insurer shall tender payment for those portions that are not disputed within thirty (30) days.(5) If a claim remains unresolved for sixty (60) days from the date proof of loss is received, the insurer shall provide the insured or, when applicable, the insured's beneficiary, or the insurance producer or other designated representative responsible for communicating with the beneficiary, with a reasonable explanation for the delay. If the investigation remains incomplete, the insurer shall, sixty (60) days from the date of initial notification and every sixty (60) days thereafter, send to the claimant a letter setting forth the reasons additional time is needed for investigation.(6) The insurer shall acknowledge and respond within thirty (30) days to any written communications relating to a pending claim.(7) When a claim is denied, written notice of denial shall be sent to the first party claimant within thirty (30) days of the determination. The insurer shall reference the policy provision, condition or exclusion upon which the denial is based.(8) No insurer shall deny a claim upon information obtained in a telephone conversation or personal interview with any source unless the telephone conversation or personal interview is documented in the claim file.(9) No insurer shall indicate to a first party claimant on a payment draft, check or in any accompanying letter that said payment is "final" or "a release" of any claim unless the policy limit has been paid or there has been a compromise settlement agreed to by the first party claimant and the insurer as to coverage and amount payable under the policy.(10) Pursuant to T.C.A. § 56-1-106, if the department makes a request for information from an insurer concerning a complaint filed against the insurer, the insurer must respond to the request within (30) days from the date the request is received by the insurer.(11) If, after an insurer denies a claim in its entirety, the first party claimant objects in writing to such denial, the insurer shall notify the first party claimant or their legally authorized representative in writing that he or she may file a complaint with the department, Consumer Insurance Services, 500 James Robertson Parkway, Nashville, Tennessee 37243, 1-800-342-4029, or may submit the request for review electronically to that section's website, currently found at: https://tn.gov/commerce/topic/commerce-file-a-complaint.Tenn. Comp. R. & Regs. 0780-01-05-.11
Original rules filed July 11, 2017; effective 10/9/2017.Authority: T.C.A. §§ 56-1-106, 56-2-301, 56-7-3401 through 56-7-3406, 56-8-101 through 56-8-120, 56-8-105, 56-8-108, and 56-8-110.