Minnesota Unfair Claims Practices Act Overview

Vocabulary flashcards focusing on specific statutory subdivisions, legal timeframes, and precedent-setting case law related to the Minnesota Unfair Claims Practices Act.

Minnesota Unfair Claims Practices Act

Legislation passed in $1984$ and codified at M.S. § 72A.20, 72A.23, and 72A.25 to regulate the insurance industry and prohibit unfair, deceptive, or fraudulent acts.

The Three Core Words of the Act

The words "prompt," "delay," and "reasonable" (or variations thereof) which are most prominently used throughout the Unfair Claims Practices Act.

General Business Practice

The standard of frequency required for a violation under M.S. § 72A.20, Subd. 12, though the Commissioner of Commerce is not required to show it for administrative enforcement.

M.S. § 8.31 (Private Attorney General Act)

A statute which provides that no individual violation of the Unfair Claims Practices Act constitutes a violation of its own provisions.

Subd. 4 - Notification of Claim Acknowledgement

The standard requiring insurers to acknowledge receipt of a claim within $10\,\text{business days}$ and promptly provide necessary forms/instructions unless settled within that timeframe.

Subd. 4 - Investigation Acceptance or Denial

The requirement to complete an investigation and inform the INSURED OR CLAIMANT of acceptance or denial within $30\,\text{business days}$, or provide reasons for any delay.

Subd. 4 - Statute of Limitations Notification

Requirement to advise an unrepresented claimant in writing of the expiration of a statute of limitations at least $60\,\text{days}$ prior to that expiration.

Subd. 4 - Fire Loss Documentation Limit

A prohibition against requiring an INSURED to provide documentation from more than $5\,\text{years}$ before or after the date of a fire loss, except for proof of ownership.

Subd. 5 - Settlement Payment Timing

Standard requiring the issuance of settlement payment within $5\,\text{business days}$ from the receipt of an agreement or the performance of specific conditions.

Subd. 6 - Automobile Total Loss Options

Insurers must offer either a comparable and available replacement auto at no cost other than the deductible, or a cash settlement including all applicable taxes and license fees.

Subd. 6 - Subrogation Deductible Recovery

Requirement that subrogation recovery from third parties must be shared at least on a proportionate basis with the insured's deductible share.

Subd. 6 - Window Glass Advisory

A mandatory disclosure informing the INSURED of their right to choose any glass vendor and prohibiting insurer pressure toward a specific repair location.

Subd. 7 - Standards for Releases

Insurers are prohibited from requesting a release that extends beyond the subject matter of the payment or stated as a final settlement on a check for future obligations.

Subd. 8 - Standards for Claim Denial

Standards requiring a reasonable investigation before denial and providing the INSURED with a written explanation of the policy provision or exclusion used as a basis.

Subd. 8a - Chemical Dependency Claim Reviewer

A reviewer who must document competency through specific education, such as a major in social work or nursing, and $480\,\text{hours}$ of supervised experience.

Subd. 9 - Commissioner Communication Standards

Requires insurers to respond to inquiries from the commissioner within $15\,\text{working days}$ and maintain complaint files for at least $4\,\text{years}$.

Subd. 10 - Scope

This section of the Unfair Claims Practices Act does not apply to worker’s compensation insurance.

Subd. 11 - Disclosure Mandatory

Requirement that an insurer disclose policy coverage and limits within $30\,\text{days}$ after a written request by A CLAIMANT.

Subd. 12 - Prejudgment Interest

The insurer is responsible for the insured's share of costs, disbursements, and prejudgment interest under M.S. § 549.09, even if it exceeds policy limits.

Subd. 13 - Improper Claim of Discount

Prohibits insurers from claiming a right to a reduced healthcare fee without a valid agreement with the provider for the specific patient involved.

Morris v. American Family Mut. Ins. Co.

A landmark Minnesota Supreme Court case holding that a private person does not have a cause of action for a violation of the Unfair Claims Practices Act.

Great West Cas. Co. v. Barnick

Case Law determining that an insurer is not obligated to pay prejudgment interest on a policy limits settlement reached before a lawsuit is commenced.

In The Matter of The Great American Ins. Co.

Court of Appeals ruling that established the Commissioner of Commerce does not need to show a "general business practice" to prove a statutory violation.

State ex rel. Hatch v. American Family Mutual Ins. Co.

Case confirming that the Commerce Commissioner's authority to bring actions for unfair trade practices is not exclusive and does not preclude the Attorney General.