ARTICLE ONE - - Right to Reasonable
Underwriting . . .
Insurers
may refuse to insure, deny access to any form of insurance, or
surcharge any applicant for Property and Casualty insurance based
upon . . .
- an applicant’s
history of policy cancellations for non-payment of premium .
.
- prior
claims experience involving at least Fifty Percent (50%) Comparative
Negligence on the part of the applicant (auto only) . .
- gross
disregard for the maintenance of the property to be insured
. .
- use of
the potential insured property for illegal purposes . .
- applicant’s
driving record (auto only) . .
- applicant’s
criminal record.
Insurers
may not increase the premiums of, or reduce the benefits of, any
policy or form of Property & Casualty insurance based upon
claims loss experience which does not involve more than Fifty
Percent (50%) comparative negligence on the part of the insured.
Other than
for reason of non-payment of premium, insurers may not cancel,
decline to renew, otherwise terminate or reduce the benefits of
a Property & Casualty insurance policy unless the insurer
can clearly demonstrate a high probability of . . .
- gross
disregard for maintenance of the insured property . .
- use of
the insured property for illegal purposes.
The insured
shall have the right to appeal to the Department of Insurance
an insurers’ decision to decline to insure, cancel, decline
to renew or otherwise terminate or reduce the benefits of a Property
& Casualty insurance policy.
The Director
of the Department of Insurance shall create (or cause to be created)
a Insurer’s Action Appellate Form for use by the insured.
The Director
of the Department of Insurance shall define an Appeal Fee to be
shared equally between the Insurer and Insured.
The Director
of the Department of Insurance shall establish (or cause to be
established) a program by which the insured’s Appeal Fee
can be waived in special circumstances.
The Director
of the Department of Insurance shall develop (or cause to be developed)
a procedure for the expedient resolution of the Appeal Process.
The decision
of the Appeal Process shall be binding upon both the insurer and
insured.
The insurer’s
action, having become subject to the Appeal Process, shall be
suspended pending the decision of the Appeal Process.
In the event
the insurer may prevail in the Appeal Process, the insurer’s
action that precipitated the Appeal Process shall take effect
no sooner that Thirty (30) Days following the Appeal Process decision.
Upon conclusion
of the Appeal Process, both the insurer and insured shall have
access to all records and documents that had been a part of the
Appeal Process. A reasonable clerical and copying fee will apply
for the duplication of these records and documents.
ARTICLE TWO - - Right to Reasonable Premiums . . .
The Department
of Insurance shall define Minimum Viability Standards for Property
& Casualty insurers.
Premium rate
increases of Five Percent (5%) or less may be implemented Thirty
(30) Days after filing a Notice of Rate Revision with the Department
of Insurance. Said Notice of Rate Revision shall include all lines
and forms of insurance written by the subject insurer and wholly
owned subsidiaries thereof.
All Notices
of Rate Revision shall be sworn to under oath and personally signed
by the insurer’s statutory agent. All Notices of Rate Revision
shall separately itemize the current and revised rates for all
lines and forms of insurance written by the subject insurer(s).
The Five Percent (5%) as expressed herein shall apply to the net
effect of the combined premiums charged for by the subject insurer(s).
Insurers
are limited to the filing of One (1) Notice of Rate Revision within
any Twelve (12) Month period.
Any false
or misleading information contained in the Notice of Rate Revision
shall expose the insurer’s signing statutory agent, and
those who provided information upon which the statutory agent
relied, to criminal prosecution under Consumer Fraud statutes
as well as civil and regulatory penalties.
The Department
of Insurance may, at their option and expense, perform Random
On-sight Audits of any insurer who has submitted a Notice of Rate
Revision, within Seven (7) Years of any such Notice of Rate Revision,
to determine the accuracy of the information contained in the
Notice of Rate Revision.
Premium Rate
Increases in excess of Five Percent (5%) annually require the
prior approval of the Department of Insurance and are subject
to a full accounting audit by the Department of Insurance and/or
their designated representative.
Said audit
shall be performed using Standards and Procedures defined by the
Department of Insurance to determine compliance with Minimum Viability
Standards.
Insurers
filing a Request for Rate Increase in excess of Five Percent (5%)
shall deposit funds in trust with the Department of Insurance
in an amount equal to 150% of the projected costs of the audit.
Excess audit costs will be paid by the insurer. Excess prepaid
audit cost deposits will defer to the Department of Insurance
to fund Random On-sight Audits of insurers who have filed a Notice
of Rate Revision.
The Department
of Insurance shall approve and/or modify requested rate increases
as may be necessary to comply with Minimum Viability Standards.
Requested rate increases found to be unnecessary to meet Minimum
Viability Standards shall be rejected by the Department of Insurance.
Insurers, for whom the Department of Insurance has approved a
rate increase in excess of Five Percent (5%), may not apply for
another rate increase or utilize the Notice of Rate Revision option
for Twelve (12) Months after approval.
Insurers
whose Request for Rate Increase in excess of Five Percent (5%)
has been rejected by the Department of Insurance may use the Notice
of Rate Revision option as outlined above but may not submit another
Request for Rate Increase in excess of Five Percent (5%) for Thirty
Six (36) Months after a Request for Rate Increase in excess of
Five Percent (5%) has been rejected.
ARTICLE THREE - - Right to Reasonable Recovery . . .
Uninsured
Motorist and Under-Insured Motorist Coverage shall include (unless
offered as a separate coverage) the right of the consumer to recover
all forms of Property Damage loss that flows from the covered
incident. Such Property Damage recovery benefit, when offered
as a separate coverage, shall be included with the Uninsured Motorist
and Under-Insured Motorist Coverages unless the policyholder signs
a separate waiver specifically rejecting such coverage. The policyholder
shall be provided a duplicate copy of said signed rejection.
Physical
Damage Coverage (i.e. Collision, Comprehensive, etc) shall include
(unless offered as a separate coverage) the right of the consumer
to recover any documented loss in market value of the insured
property that flows from the covered incident. Such Loss in Market
Value benefit, when offered as a separate coverage, shall be included
with any Physical Damage coverage unless the policyholder signs
a separate waiver specifically rejecting such coverage. The policyholder
shall be provided a duplicate copy of said signed rejection.
Any Property
and Casualty insurer that writes Physical Damage coverage that
allows the insurer to evaluate Physical Damage claims on the basis
of utilizing parts or materials not produced, licensed or approved
by the Original Equipment Manufacturer shall provide written notice
to the policyholder that such contractual right is held by the
insurer. Said notice shall inform the policyholder of any real
or potential consequences related to the use of such generic parts
and shall require the signature of the policyholder acknowledging
notification of such insurer right and the real or potential consequences
thereof. The Director of the Department of Insurance shall define
the factors to be included in the description of “Real or
Potential Consequences” which must include the impact on
any pre-existing manufacturer’s warranty(s) and the impact
on the post-repair resale value of the insured property when non-OEM
parts are utilized. The policyholder shall be provided a duplicate
copy of said signed notification.
That portion
of a Physical Damage policy commonly referred to as the “Appraisal
Clause” shall include the option of having a third party
to the process (umpire, referee, third appraiser, etc) be appointed
by a “Court of Jurisdiction”. If the “Appraisal”
process should result in a settlement increase of Twenty Five
Percent (25%) or more, the insurer shall reimburse to the policyholder
all costs incurred relative to participating in the “Appraisal”
process. Upon request of the policyholder, the insurer shall tender
payment to the policyholder in an amount equal to the highest
offer of settlement made by the insurer prior to the “Appraisal
Clause” being invoked.
When an insurer
steers, directs, suggests or otherwise encourages the use of a
specific repair facility or group of facilities, and a consumer
chooses to utilize such facility, the insurer shall warrant the
damaged property to be fully restored to pre-loss level of appearance,
function, safety and warranty protection. If an insurer becomes
involved directly or indirectly in defining the scope and/or method
of repair to be employed in addressing covered damage, said insurer
shall warrant repairs against defects in workmanship and/or materials.
Said warranties, as referenced herein, shall be for the balance
of any existing manufacturer warranty or five (5) years, whichever
is greater. Said warranties shall be transferable to a buyer in
due course of the repaired property. All Original Equipment Manufacturer
repair guidelines will be strictly adhered to. If any repair falls
short of this level of restoration, the insurer shall pay whatever
re-repair or additional repair cost is necessary to achieve pre-loss
appearance, function and safety. No insurer shall require any
consumer to return to the same repairer for any additional work
necessary. Such re-repair or additional repair, as referenced
herein, shall not be subject to any policy contract limitations.
Insurer shall provide comparable substitute transportation during
the time re-repairs or additional repairs are being performed.
All repaired
vehicles, for which insurance funds were involved in payment of
the repairs, shall display a permanent record of the insurance
claim information in a conspicuous location in the engine compartment
of the repaired vehicle. Said permanent record shall be affixed
to the repaired vehicle by an authorized representative of the
insurer when the repairs have been fully completed but prior to
delivery of the repaired vehicle back to the owner. Said claim
information shall identify the insurer, claim number, date of
loss, date of warranty inception (if applicable), identity of
the individual affixing the record and the name and phone number
of the repairing facility.
The Department
of Insurance, upon petition to and order from a Court of Jurisdiction,
shall have the authority to require any insurance carrier to comply
with any/all statutes/regulations governing the conduct of an
insurance carrier in first party claim situations be applied to
third party liability situations.
ARTICLE FOUR - - Right to Reasonable Enforcement . . .
The Director
of the Department of Insurance, or their designated representative,
shall, after a thorough investigation of a Consumer Complaint
where a departure from the code of conduct as outlined herein
is found to exist, impose a fine against the insurer of no less
than Five Thousand Dollars ($5,000.00) and no more than the Director
of the Department of Insurance deems appropriate to discourage
such mis-conduct in the future. The cost of the complaint investigation
shall be added to the amount of the fine.
ARTICLE FIVE - - Right to Insurer Accountability . . .
The code
of conduct as outlined herein, as well as the investigatory files
relative to a given insurer, shall be admissible in any civil
action alleging violations hereof.
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