Section 0780-01-05-.08 - STANDARDS FOR PROMPT, FAIR AND EQUITABLE SETTLEMENTS APPLICABLE TO PROPERTY AND CASUALTY INSURERS(1) Within sixty (60) days after receipt by the insurer of properly completed and executed proofs of loss and such information or documents required under the policy, the first party claimant shall be advised of the acceptance or denial of liability for the claim by the insurer. No insurer shall deny a claim without providing a basis for the denial. Upon request, any denial must be given to the first party claimant in writing and the claim file of the insurer shall contain documentation of the denial as required by rule 0780-01-05-.05. (a) Where there is a reasonable basis supported by specific information available for review by the department that the first party claimant has fraudulently caused, contributed to, or misrepresented the loss, the insurer is relieved from the requirements of paragraph 0780-01-05-.08(1); provided, however, that the first party claimant shall be advised of the acceptance or denial of liability for the claim within a reasonable time for full investigation after receipt by the insurer of a properly completed and executed proof of loss.(2) If the insurer needs more time to determine whether liability for a first party claim should be accepted or denied, it shall so notify the first party claimant within sixty (60) days after receipt of the proofs of loss and such information or documents required under the policy, giving the reasons more time is needed. If the investigation remains incomplete, the insurer shall, sixty (60) days from the initial notification and every sixty (60) days thereafter, send to the first party claimant a letter setting forth the reasons additional time is needed for investigation.(a) Where there is a reasonable basis supported by specific information available for review by the department for suspecting that the first party claimant has fraudulently caused, contributed to, or misrepresented the loss, the insurer is relieved from the requirements of paragraph 0780-01-05-.08(2); provided, however, that the claimant shall be advised of the acceptance or denial of liability for the claim by the insurer within a reasonable time for full investigation after receipt by the insurer of a properly completed and executed proof of loss.(3) The insurer shall, within thirty (30) days after concluding a coverage investigation, notify the first party claimant of the findings of the investigation. Paragraphs 0780-01-05-.08(1) and (2) shall apply at the time the notice of investigation closure is sent.(4) Insurers shall not fail to settle first party claims on the basis that responsibility for payment should be assumed by others except as may otherwise be provided by policy provisions.(5) Insurers shall give notice of an applicable statute of limitations to first party claimants at least thirty (30) days before the date on which such statute of limitations may expire.(6) The insurer shall tender payment within thirty (30) days of affirmation of liability, if the amount of the claim is determined and not in dispute, unless the policyholder does not want payment within thirty (30) days.(7) No insurer shall request or require any insured to submit to a polygraph examination unless authorized under the applicable insurance contracts and state law.(8) If, after an insurer denies a claim in its entirety, the first party claimant objects in writing to such denial, the insurer shall notify the first party claimant in writing that he or she may file a complaint with the department, Consumer Insurance Services, 500 James Robertson Parkway, Nashville, Tennessee 37243, 1-800-342-4029, or may submit the complaint request for review electronically to that section's complaint link for insurance complaints, currently found at: https://tn.gov/commerce/topic/commerce-file-a-complaint.(9) An insurer shall notify a policyholder of his or her right to choose a vendor to complete repairs of damages covered under the policy, unless use of a specified vendor is provided pursuant to the terms of the policy. If a notice is made by means other than writing, an appropriate notation of the notice shall be made in the claim file of the insurer and dated.(10) No insurer shall cancel a personal residential property policy in effect for sixty (60) days or more, if the sole reason for the cancellation of the policy is that a claim is pending with the insurer.(11) Pursuant to T.C.A. § 56-7-113, no insurance company shall increase a premium or cancel a personal residential property policy solely on the basis of an inquiry or inquiries by an insured regarding the insured's personal residential property policy or a loss under the policy.Tenn. Comp. R. & Regs. 0780-01-05-.08
Original rules filed July 11, 2017; effective 10/9/2017.Authority: T.C.A. §§ 56-2-201, 56-2-202, 56-2-301, 56-7-113, 56-8-101 through 56-8-120, 56-8-105, 56-8-108, and 56-8-110.