20-462

20-462. Timely payment of claims

A. From and after July 15, 1986 any first party claim not paid within thirty days
after the receipt of an acceptable proof of loss by the insurer which contains all
information necessary for claim adjudication shall be required to pay interest at the
legal rate from the date the claim is received by the insurer. The interest shall be
calculated on the amount the insurer is legally obligated to pay according to the terms
of the insurance contract under which the claim is being submitted.

B. For purposes of determining whether the claim has been paid within thirty days,
the date of payment shall be deemed to have been received by the addressee on the date
shown by the postmark or other official mark of the United States mail stamped on the
payment envelope. If the receipt disputes the date where there is no mark or the mark is
not legible, the sender may establish the mailing or transfer date by competent evidence.

C. This section shall not apply to:

1. Claims submitted for payment under medicare, title XVIII of the social security
act (42 United States Code section 1301).

2. Claims submitted under a medicare supplement contract where, according to the
terms of the supplement contract, claims will be based upon the amount paid by medicare.

3. The payment of a claim shall not be overdue during any period in which the
insurer is unable to pay such claim because there is no recipient who is legally able to
give a valid release for such payment, or in which the insurer is unable to determine who
is entitled to receive such payment, if the insurer has promptly notified the claimant of
such inability and has offered in good faith to promptly pay said claim upon
determination of who is entitled to receive such payment.

4. Claims submitted to a person who is the processing agent for a foreign insurer
or other person providing an insurance program for retirees residing in Arizona.

5. Claims denied in good faith within thirty days after receipt of acceptable
proofs of loss.

D. This section shall apply only to claims that are to be paid by the insurer
directly to the insured, to a beneficiary named in the contract, or to a provider who has
been assigned the right to receive benefits under the contract by the insured.