Administrative Code

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Virginia Administrative Code
Title 14. Insurance
Agency 5. State Corporation Commission, Bureau of Insurance
Chapter 400. Rules Governing Unfair Claim Settlement Practices

14VAC5-400-40. Misrepresentation of policy provisions.

A. No insurer shall fail to fully disclose to a first party claimant all pertinent benefits, coverages, or other provisions of an insurance policy under which a claim is presented and document the claim file accordingly.

B. No person shall misrepresent benefits, coverages, or other provisions of any insurance policy when such benefits, coverages, or other provisions are pertinent to a claim.

C. No insurer shall deny a claim for failure of a first party claimant to submit to physical examination or for failure of the first party claimant to exhibit property unless there is documentation of breach of the policy provisions in the claim file.

D. No insurer shall deny a claim based on the failure of a claimant to give written notice of loss or give notice of loss within a specified period of time unless either or both requirements are policy conditions. If a policy requires a demonstration of prejudice for a claimant's failure to comply with a notice condition, an insurer shall not be relieved of its obligations under the policy unless the failure to comply with the notice condition prejudices the insurer's rights.

E. No insurer shall request a first party claimant to sign a release that extends beyond the subject matter that gave rise to the claim. An insurer shall not include with any payment or in any accompanying correspondence an indication that payment is "final" or "a release" of any claim unless the policy limit has been paid or a compromise settlement has been agreed to by the first party claimant.

F. No insurer shall issue a payment in partial settlement of a loss or claim for a specific coverage that contains language purporting to release the insurer or its insured from total liability.

Statutory Authority

§§ 12.1-13, 38.2-223, and 38.2-510 of the Code of Virginia.

Historical Notes

Derived from Regulation 12, Case No. 19961, § 5, eff. September 15, 1978; amended, Virginia Register Volume 33, Issue 22, eff. January 1, 2018.

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