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Kentucky's Unfair claims Settlement Practices Act

304.12-230 Unfair claims settlement practices.
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It is an unfair claims settlement practice for any person to commit or perform any of the
following acts or omissions:
(1) Misrepresenting pertinent facts or insurance policy provisions relating to coverages
at issue;
(2) Failing to acknowledge and act reasonably promptly upon communications with
respect to claims arising under insurance policies;
(3) Failing to adopt and implement reasonable standards for the prompt investigation of
claims arising under insurance policies;
(4) Refusing to pay claims without conducting a reasonable investigation based upon
all available information;
(5) Failing to affirm or deny coverage of claims within a reasonable time after proof of
loss statements have been completed;
(6) Not attempting in good faith to effectuate prompt, fair and equitable settlements of
claims in which liability has become reasonably clear;
(7) Compelling insureds to institute litigation to recover amounts due under an
insurance policy by offering substantially less than the amounts ultimately
recovered in actions brought by such insureds;
(8) Attempting to settle a claim for less than the amount to which a reasonable man
would have believed he was entitled by reference to written or printed advertising
material accompanying or made part of an application;
(9) Attempting to settle claims on the basis of an application which was altered without
notice to, or knowledge or consent of the insured;
(10) Making claims payments to insureds or beneficiaries not accompanied by statement
setting forth the coverage under which the payments are being made;
(11) 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;
(12) Delaying the investigation or payment of claims by requiring an insured, claimant,
or the physician of either to submit a preliminary claim report and then requiring the
subsequent submission of formal proof of loss forms, both of which submissions
contain substantially the same information;
(13) Failing to promptly settle claims, where liability has become reasonably clear, under
one (1) portion of the insurance policy coverage in order to influence settlements
under other portions of the insurance policy coverage;
(14) Failing to promptly provide a reasonable explanation of the basis in the insurance
policy in relation to the facts or applicable law for denial of a claim or for the offer
of a compromise settlement; or
(15) Failing to comply with the decision of an independent review entity to provide
coverage for a covered person as a result of an external review in accordance with
KRS 304.17A-621, 304.17A-623, and 304.17A-625.
Effective: July 14, 2000
History: Amended 2000 Ky. Acts ch. 262, sec. 18, effective July 14, 2000. -- Amended
1988 Ky. Acts ch. 225, sec. 19, effective July 15, 1988. -- Created 1984 Ky. Acts
ch. 171, sec. 2, effective July 13, 1984.