Insurers doing business in California must comply with the requirements of California Fair Claims Settlement Practices Regulations (the Regulations) or face the ire of, and attempts at financial punishment from, the California Department of Insurance (CDI). That punishment is now in question because some courageous insurers fought the CDI and succeeded before an administrative law judge.
Regardless of difficulties in assessing punishment, the state requires all who are involved in the claims process—even if only tangentially—to be trained with regard to claims handling in compliance with the Regulations and attest to completion of such training under oath or that the claims person has read and understood the Regulations.
It is necessary that insurance personnel who are engaged in any way in the presentation, processing, or negotiation of insurance claims in California familiarize themselves with the Regulations. Counsel for insurers and policyholders should also be informed, as they help set a minimum standard for insurance claims handling.
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