Unfair Claims Law Amended

The Connecticut Joint Judiciary Committee recently introduced a bill intended to reinforce unfair claim settlement laws by removing language that requires the practice to occur regularly.

House Bill 6065 aims to abolish the condition that anyone who suspects an unfair claim settlement practice has to prove that the practice is carried out with regular occurrence, thereby classifying it as a general business practice. Currently, an unfair claim settlement practice in Connecticut can only be instituted if the event is shown to be part of an ongoing pattern and not just a one-time occasion.

House Bill 6065 proposes to remove that condition from the law and maintains that a practice is unfair whether it occurs once or multiple times. The bill will rewrite section one of the Connecticut general statutes, but the unfair claim settlement practices that are already listed will stay the same. The bill mainly changes any references to plural activities, indicating a single unfair act.

The current law states that an unfair claim settlement practice is constituted by “failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies.” It also has been amended to keep insurers accountable by stating that the insurer must adhere to those standards.

The amended act is scheduled to take effect Oct. 1, 2007.