Section Ins 6.11 - Insurance claim settlement practices(1) PURPOSE. This rule is to promote the fair and equitable treatment of policyholders, claimants and insurers by defining certain claim adjustment practices which are considered to be unfair methods and practices in the business of insurance. The rule implements and interprets applicable statutes including but not limited to ss. 601.04(3), 601.01(2), and 645.41(3), Stats.(2) SCOPE. This rule applies to the kinds of insurance identified in s. Ins 6.75, transacted by insurers as defined in s. 600.03(27), Stats., and nonprofit service plans subject to ch. 613, Stats.(3) UNFAIR CLAIM SETTLEMENT PRACTICES. (a) Any of the following acts, if committed by any person without just cause and performed with such frequency as to indicate general business practice, shall constitute unfair methods and practices in the business of insurance:1. Failure to promptly acknowledge pertinent communications with respect to claims arising under insurance policies.2. Failure to initiate and conclude a claims investigation with all reasonable dispatch.3. Failure to promptly provide necessary claims forms, instructions and reasonable assistance to insureds and claimants under its insurance policies.4. Failure to attempt in good faith to effectuate fair and equitable settlement of claims submitted in which liability has become reasonably clear.5. Failure upon request of a claimant, to promptly provide a reasonable explanation of the basis in the policy contract or applicable law for denial of a claim or for the offer of a compromise settlement.6. Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages involved.7. Failure to affirm or deny coverage of claims within a reasonable time after proof of loss has been completed.8. Failure to settle a claim under one portion of the policy coverage in order to influence a settlement under another portion of the policy coverage.9. Except as may be otherwise provided in the policy contract, the failure to offer settlement under applicable first party coverage on the basis that responsibility for payment should be assumed by other persons or insurers.10. Compelling insureds and claimants to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them.11. Refusing payment of claims solely on the basis of the insured's request to do so without making an independent evaluation of the insured's liability based upon all available information.12. Failure, where appropriate, to make use of arbitration procedures authorized or permitted under any insurance policy.13. Adopting or making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.(b) Any of the following acts committed by any person shall constitute unfair methods and practices in the business of insurance:1. Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages involved.2. Failure to make provision for adequate claims handling personnel, systems and procedures to effectively service claims in this state incurred under insurance coverage issued or delivered in this state.3. Failure to adopt reasonable standards for investigation of claims arising under its insurance policies.4. Violating the requirements established in s. 632.85, Stats.(4) PROMPT DEFINED. Except where a different period is specified by statute or rule and except for good cause shown, the terms "prompt" and "promptly" as used in this rule shall mean responsive action within 10 consecutive days from receipt of a communication concerning a claim.(5) PENALTY. The commission of any of the acts listed in sub. (3) (a) or (b) 2. or 3. shall subject the person to revocation of license to transact insurance in this state. Violations of this rule or any order issued thereunder shall subject the person violating the same to s. 601.64, Stats.Wis. Admin. Code Office of the Commissioner of Insurance Ins 6.11
Cr. Register, October, 1971, No. 190, eff. 11-1-71; am. (1), Register, September, 1973, No. 213, eff. 10-1-73; am. (2), Register, February, 1974, No. 218, eff. 3-1-74; emerg. am. (2), eff. 6-22-76; am. (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; correction in (1) made under s. 13.93(2m) (b) 7, Stats., Register, April, 1992, No. 436, eff. 5-1-92; cr. (3) (b) 4., Register, February, 2000, No. 530, eff. 3-1-00.