PART IV. UNFAIR COMPETITION AND

DECEPTIVEACTS OR PRACTICES

 

§435E-41  Unfair methods of competition anddeceptive acts or practices.  The following are unfair methods ofcompetition and deceptive acts or practices with respect to cooperativecorporations 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, anyestimate, illustration, circular, or statement misrepresenting the terms of anyinterindemnity arrangement or the benefits or advantages promised thereby, ormaking any misleading representation or any misrepresentation as to thefinancial condition of an interindemnity arrangement, or making anymisrepresentation to any participating member for the purpose of inducing ortending to induce the member to lapse, forfeit, or surrender his or her rightsto indemnification under the interindemnity arrangement.  It shall be a falseor misleading statement to state or represent that a cooperative corporation orinterindemnity arrangement is or constitutes "insurance" or an"insurance company" or an "insurance policy".

(2)  Making or disseminating or causing to be made ordisseminated before the public in this State, in any newspaper or otherpublication, or any advertising device, or by public outcry or proclamation, orin any other manner or means whatsoever, any statement containing anyassertion, representation, or statement with respect to such cooperativecorporations or interindemnity arrangements, or with respect to any person inthe conduct of such cooperative corporations or interindemnity arrangements,which is untrue, deceptive, or misleading, and which is known, or which by theexercise of reasonable care should be known, to be untrue, deceptive, ormisleading.  It shall be a false or misleading statement to state or representthat a cooperative corporation or interindemnity arrangement is or constitutes"insurance" or an "insurance company" or an "insurancepolicy".

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

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

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

(6)  Making or disseminating, or causing to be made ordisseminated, 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 anyother manner or means whatever, whether directly or by implication, anystatement that such a cooperative corporation or interindemnity arrangement isinsured against insolvency, or otherwise protected by law.

(7)  Knowingly committing or performing with suchfrequency as to indicate a general business practice any of the followingunfair claims settlement practices:

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

(B)  Failing to acknowledge and act promptlyupon communications with respect to claims arising under such interindemnityarrangements.

(C)  Failing to adopt and implement reasonablestandards for the prompt investigation and processing of claims arising undersuch interindemnity arrangement.

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

(E)  Not attempting in good faith to effectuateprompt, fair, and equitable settlements of claims in which liability has becomereasonably clear.

(F)  Compelling participating members toinstitute litigation to recover amounts due under an interindemnity arrangementby offering substantially less than the amounts ultimately recovered in actionsbrought by such participating members when such participating members have madeclaims under such interindemnity arrangements for amounts reasonably similar tothe amounts ultimately recovered.

(G)  Attempting to settle a claim by aparticipating member for less than the amount to which a reasonable personwould have believed he or she was entitled by reference to written or printedadvertising material accompanying or made part of an application for membershipin such an interindemnity arrangement.

(H)  Attempting to settle claims on the basisof an interindemnity arrangement which was altered without notice to theparticipating member.

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

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

(K)  Delaying the investigation or payment ofclaims by requiring a claimant, or his or her physician, to submit apreliminary claim report, and then requiring the subsequent submission offormal proof of loss forms, both of which submissions contain substantially thesame information.

(L)  Failing to settle claims promptly, whereliability has become apparent, under one portion of an interindemnityarrangement in order to influence settlements under other portions of theinterindemnity arrangement.

(M)  Failing to provide promptly a reasonableexplanation of the basis relied on in the interindemnity arrangement, inrelation to the facts of applicable law, or the denial of a claim or for theoffer of a compromise settlement.

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

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