PART IV. 
UNFAIR COMPETITION AND



DECEPTIVE
ACTS OR PRACTICES



 



§435E-41  Unfair methods of competition and
deceptive acts or practices.  The following are unfair methods of
competition and deceptive acts or practices with respect to cooperative
corporations or interindemnity arrangements under this chapter:



(1)  Making any false or misleading statement as to,
or issuing, circulating, or causing to be made, issued, or circulated, any
estimate, illustration, circular, or statement misrepresenting the terms of any
interindemnity arrangement or the benefits or advantages promised thereby, or
making any misleading representation or any misrepresentation as to the
financial condition of an interindemnity arrangement, or making any
misrepresentation to any participating member for the purpose of inducing or
tending to induce the member to lapse, forfeit, or surrender his or her rights
to indemnification under the interindemnity arrangement.  It shall be a false
or misleading statement to state or represent that a cooperative corporation or
interindemnity arrangement is or constitutes "insurance" or an
"insurance company" or an "insurance policy".



(2)  Making or disseminating or causing to be made or
disseminated before the public in this State, in any newspaper or other
publication, or any advertising device, or by public outcry or proclamation, or
in any other manner or means whatsoever, any statement containing any
assertion, representation, or statement with respect to such cooperative
corporations or interindemnity arrangements, or with respect to any person in
the conduct of such cooperative corporations or interindemnity arrangements,
which is untrue, deceptive, or misleading, and which is known, or which by the
exercise of reasonable care should be known, to be untrue, deceptive, or
misleading.  It shall be a false or misleading statement to state or represent
that a cooperative corporation or interindemnity arrangement is or constitutes
"insurance" or an "insurance company" or an "insurance
policy".



(3)  Entering into any agreement to commit, or by any
concerted action committing, any act of boycott, coercion, or intimidation
resulting in or tending to result in an unreasonable restraint of, or monopoly
in, such cooperative corporations or interindemnity arrangements.



(4)  Filing with any supervisory or other public
official, or making, publishing, disseminating, circulating, or delivering to
any person, or placing before the public, or causing directly or indirectly, to
be made, published, disseminated, circulated, or delivered to any person, or
placed before the public any false statement of financial conditions of such a
cooperative corporation or interindemnity arrangement with intent to deceive.



(5)  Making any false entry in any book, report, or
statement of such a cooperative corporation or interindemnity arrangement with
intent to deceive any agent or examiner lawfully appointed to examine into its
condition or into any of its affairs, or any public official to whom such a
cooperative corporation or interindemnity arrangement is required by law to
report or who has authority by law to examine into its conditions or into any
of its affairs, or, with like intent, wilfully omitting to make a true entry of
any material fact pertaining to a cooperative corporation or interindemnity
arrangement in any book, report, or statement of a cooperative corporation or
interindemnity arrangement.



(6)  Making or disseminating, or causing to be made or
disseminated, before the public in this State, in any newspaper or other publication,
or any other advertising device, or by public outcry or proclamation, or in any
other manner or means whatever, whether directly or by implication, any
statement that such a cooperative corporation or interindemnity arrangement is
insured against insolvency, or otherwise protected by law.



(7)  Knowingly committing or performing with such
frequency as to indicate a general business practice any of the following
unfair claims settlement practices:



(A)  Misrepresenting to claimants pertinent
facts or provisions relating to any coverage at issue.



(B)  Failing to acknowledge and act promptly
upon communications with respect to claims arising under such interindemnity
arrangements.



(C)  Failing to adopt and implement reasonable
standards for the prompt investigation and processing of claims arising under
such interindemnity arrangement.



(D)  Failing to affirm or deny coverage of
claims within a reasonable time after proof of claim requirements have been
completed and submitted by the participating member.



(E)  Not attempting in good faith to effectuate
prompt, fair, and equitable settlements of claims in which liability has become
reasonably clear.



(F)  Compelling participating members to
institute litigation to recover amounts due under an interindemnity arrangement
by offering substantially less than the amounts ultimately recovered in actions
brought by such participating members when such participating members have made
claims under such interindemnity arrangements for amounts reasonably similar to
the amounts ultimately recovered.



(G)  Attempting to settle a claim by a
participating member for less than the amount to which a reasonable person
would have believed he or she was entitled by reference to written or printed
advertising material accompanying or made part of an application for membership
in such an interindemnity arrangement.



(H)  Attempting to settle claims on the basis
of an interindemnity arrangement which was altered without notice to the
participating member.



(I)  Failing, after payment of a claim, to
inform participating members, upon request by them, of the coverage under which
payment has been made.



(J)  Making known to claimants a practice of
such cooperative corporation or interindemnity arrangement of appealing from
arbitration awards in favor of claimants for the purpose of compelling them to
accept settlements or compromises less than the amount awarded in arbitration.



(K)  Delaying the investigation or payment of
claims by requiring a claimant, or his or her physician, 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.



(L)  Failing to settle claims promptly, where
liability has become apparent, under one portion of an interindemnity
arrangement in order to influence settlements under other portions of the
interindemnity arrangement.



(M)  Failing to provide promptly a reasonable
explanation of the basis relied on in the interindemnity arrangement, in
relation to the facts of applicable law, or the denial of a claim or for the
offer of a compromise settlement.



(N)  Directly advising a claimant not to obtain
the services of an attorney.



(O)  Misleading a claimant as to the applicable
statute of limitations. [L 1977, c 182, pt of §1]