Connecticut Gov. Dannel Malloy last week signed a bill that aims to help resolve insurance disputes after catastrophic events.
The bill, first introduced by the state’s insurance department, gives the department the legal authority to set up a mediation program for claims disputes arising from catastrophic events. Any mediation costs would be borne by the insurers.
The bill, H.B. 6549, was signed by the governor on June 21 and will take effect beginning Oct. 1, 2013.
The bill states that the insurance department shall establish a mediation program for claims disputes for loss or damage to personal or real property that arises under a claimant’s (A) personal risk insurance policy other than a private passenger non-fleet automobile insurance policy, (B) condominium association master policy, or (C) unit owners’ association property insurance policy, as a result of a catastrophic event. A catastrophic event would be defined as an event for which the governor has declared a state of emergency.
The mediation program would not apply to flood insurance coverage issued by the National Flood Insurance Program.
Any company licensed to write the lines of insurance described in the bill would be required to participate in the mediation program.
The mediation program would be available for any dispute between a claimant and the insurer arising from a catastrophic event in which the difference between the parties is at least $5,000, notwithstanding any applicable deductible. The parties could also agree to mediate a dispute involving a lesser amount.
The bill stipulates that the insurance commissioner would designate an entity as the commissioner’s designee to carry out the mediation. The insurer would be required to pay the mediation fee to the designated entity within five days of receiving an invoice from the entity.
The bill states that a claimant’s right to request mediation would not affect any other right the claimant may have to redress the dispute — including any remedies specified in the policy or any right provided by law.
The bill also states that the insurance commissioner would adopt regulations to implement the provisions. Such regulations would include, (1) the form and manner of notification by the insurer to an insured of the right to mediation, (2) the forms and procedures for a claimant or an insurer to request a mediation proceeding, and (3) the requirements for an insurer’s participation at the mediation hearing.
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