The NAII, in a letter to Kansas Insurance Commissioner Kathleen Sebelius, stated that proposed Kansas regulations requiring insurers to treat third-party property damage claims the same as first-party claims is “unnecessary, illogical and will pose numerous problems.”
NAII Counsel Ann Weber also indicated that it was questionable whether the Department had authority to adopt a regulation specifying how third-party claims are to be evaluated.
She cited, as a “perfect illustration” of an illogical provision in the regulation, a mandate for an insurer to reopen a claim file within five days after a claimant states they are unable to buy an automobile for the amount of the proposed settlement. “More often than not, the settlement draft issued to a third-party claimant does not reflect solely the cost of a single automobile property loss” Weber stated.
“The settlement may have taken into account the negligence of the claimant and other parties, etc., in addition to the incorporation of bodily injury damages,” she continued. “Most alarming, however, is the fact that parties to a civil action will no longer be able to rely on the execution of a release to resolve a claim. This undoubtedly poses a direct conflict with established statutory law and case law in Kansas,” she concluded.
Weber also found problems with the regulation’s definition of a “local market area” for determining the fair market value of a comparable car. Now set at 25 miles, she pointed out that with Internet technology widely available price comparisons can be more easily determined, and urged that the area be increased to 150 miles.
The letter concluded that “there is no compelling need in Kansas to broaden the rule for evaluating property coverage for first-party claims to third-party claimants. There has been no indication that the regulations and statutes presently on the books in Kansas have not been adequate to sufficiently deal with any complaints regarding third-party claims handling.”
Topics Legislation Claims Kansas
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