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A review of the Model Act and Regulations as originally drafted by the National Association of Insurance Commissioners (NAIC) demonstrates that their intent was for violations to be dealt with through the imposition of administrative remedies rather than judicial penalties in civil litigation. The requirements imposed such as (1) acknowledging receipt of a claim within a relatively brief time period; (2) responding in writing to communications; and (3) providing assistance and forms without requiring a showing of specific harm flowing from a violation makes judicial remedies such as a directed verdict of bad faith and/or the imposition of monetary damages a penalty that often does not match the behavior.

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