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Capital IconMinnesota Legislature

HF 312

as introduced - 87th Legislature (2011 - 2012) Posted on 02/02/2011 09:06am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to insurance; requiring health insurers to honor the patient's assignment
of benefits; amending Minnesota Statutes 2010, section 72A.201, subdivision 4.


Section 1.

Minnesota Statutes 2010, section 72A.201, subdivision 4, is amended to

Subd. 4.

Standards for claim filing and handling.

The following acts by an
insurer, an adjuster, a self-insured, or a self-insurance administrator constitute unfair
settlement practices:

(1) except for claims made under a health insurance policy, after receiving
notification of claim from an insured or a claimant, failing to acknowledge receipt of the
notification of the claim within ten business days, and failing to promptly provide all
necessary claim forms and instructions to process the claim, unless the claim is settled
within ten business days. The acknowledgment must include the telephone number of the
company representative who can assist the insured or the claimant in providing information
and assistance that is reasonable so that the insured or claimant can comply with the policy
conditions and the insurer's reasonable requirements. If an acknowledgment is made by
means other than writing, an appropriate notation of the acknowledgment must be made in
the claim file of the insurer and dated. An appropriate notation must include at least the
following information where the acknowledgment is by telephone or oral contact:

(i) the telephone number called, if any;

(ii) the name of the person making the telephone call or oral contact;

(iii) the name of the person who actually received the telephone call or oral contact;

(iv) the time of the telephone call or oral contact; and

(v) the date of the telephone call or oral contact;

(2) failing to reply, within ten business days of receipt, to all other communications
about a claim from an insured or a claimant that reasonably indicate a response is
requested or needed;

(3)(i) unless provided otherwise by clause (ii) or (iii), other law, or in the policy,
failing to complete its investigation and inform the insured or claimant of acceptance or
denial of a claim within 30 business days after receipt of notification of claim unless
the investigation cannot be reasonably completed within that time. In the event that the
investigation cannot reasonably be completed within that time, the insurer shall notify
the insured or claimant within the time period of the reasons why the investigation is not
complete and the expected date the investigation will be complete. For claims made under
a health policy the notification of claim must be in writing;

(ii) for claims submitted under a health policy, the insurer must comply with all of
the requirements of section 62Q.75;

(iii) for claims submitted under a health policy that are accepted, the insurer must
notify the insured or claimant no less than semiannually of the disposition of claims of the
insured or claimant. Notwithstanding the requirements of section 72A.20, subdivision
37, this notification requirement is satisfied if the information related to the acceptance of
the claim is made accessible to the insured or claimant on a secured Web site maintained
by the insurer. For purposes of this clause, acceptance of a claim means that there is no
additional financial liability for the insured or claimant, either because there is a flat
co-payment amount specified in the health plan or because there is no co-payment,
deductible, or coinsurance owed;

(4) where evidence of suspected fraud is present, the requirement to disclose their
reasons for failure to complete the investigation within the time period set forth in clause
(3) need not be specific. The insurer must make this evidence available to the Department
of Commerce if requested;

(5) failing to notify an insured who has made a notification of claim of all available
benefits or coverages which the insured may be eligible to receive under the terms of a
policy and of the documentation which the insured must supply in order to ascertain

(6) unless otherwise provided by law or in the policy, requiring an insured to give
written notice of loss or proof of loss within a specified time, and thereafter seeking to
relieve the insurer of its obligations if the time limit is not complied with, unless the
failure to comply with the time limit prejudices the insurer's rights and then only if the
insurer gave prior notice to the insured of the potential prejudice;

(7) advising an insured or a claimant not to obtain the services of an attorney or
an adjuster, or representing that payment will be delayed if an attorney or an adjuster
is retained by the insured or the claimant;

(8) failing to advise in writing an insured or claimant who has filed a notification of
claim known to be unresolved, and who has not retained an attorney, of the expiration of
a statute of limitations at least 60 days prior to that expiration. For the purposes of this
clause, any claim on which the insurer has received no communication from the insured
or claimant for a period of two years preceding the expiration of the applicable statute
of limitations shall not be considered to be known to be unresolved and notice need not
be sent pursuant to this clause;

(9) demanding information which would not affect the settlement of the claim;

(10) unless expressly permitted by law or the policy, refusing to settle a claim of an
insured on the basis that the responsibility should be assumed by others;

(11) failing, within 60 business days after receipt of a properly executed proof of loss,
to advise the insured of the acceptance or denial of the claim by the insurer. No insurer
shall deny a claim on the grounds of a specific policy provision, condition, or exclusion
unless reference to the provision, condition, or exclusion is included in the denial. The
denial must be given to the insured in writing with a copy filed in the claim file;

(12) denying or reducing a claim on the basis of an application which was altered or
falsified by the agent or insurer without the knowledge of the insured;

(13) failing to notify the insured of the existence of the additional living expense
coverage when an insured under a homeowners policy sustains a loss by reason of a
covered occurrence and the damage to the dwelling is such that it is not habitable;

(14) failing to inform an insured or a claimant that the insurer will pay for an
estimate of repair if the insurer requested the estimate and the insured or claimant had
previously submitted two estimates of repairdeleted text begin.deleted text endnew text begin;
new text end

new text begin (15) in connection with a claim under a health plan or other health insurance
coverage, failing to honor a patient's assignment of benefits requiring the insurer to make
the payment on the claim directly to the health care provider if:
new text end

new text begin (i) the provider is in the network of providers covered under the patient's health plan
or other health insurance coverage under which the claim was submitted; and
new text end

new text begin (ii) the insurer received the assignment of benefits no later than two days before
making payment on the claim.
new text end

new text begin Clause (15) applies regardless of whether the assignment of benefits form signed by
the patient made payment directly to the provider optional on the part of the insurer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2011, and applies to claims
submitted on or after that date.
new text end