Mississippi State Representative Steve Holland is sponsoring House Bill 754 to make insurance companies pay their claims in a timely manner. According to the pending legislation, claims must be paid within 90 days after the insurer receives first notice of loss.
One section of the bill is particularly noteworthy for insurers. The bill states that if benefits are not paid on a timely basis and there is later a ruling against an insurer by a court of law, the benefits paid to the insured, an individual, or entity directly entitled to the benefits under the contract of insurance, or third party tort claimant, shall bear simple interest that will begin to accrue 30 days from the date that the initial insurance claim was filed at the rate of 12 percent per year. The interest will be paid in addition to and at the time of payment of loss, the bill states.
If the bill is passed, the 90-day window will give special investigation units little time to conduct research for suspected fraud. The legislation is set to take effect on July 1, 2008.
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