Governor Gregoire Signs Insurance Fair Conduct Act into Law

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Governor Gregoire Signs Insurance Fair Conduct Act into Law

On May 15, 2007, Governor Christine Gregoire signed the Insurance Fair Conduct Act into law. The Act allows recovery of uncapped treble damages for unreasonable denial of a claim for coverage or payment of benefits, and recovery of uncapped treble damages for violation of

certain insurance regulations.

To whom does this Act apply?

All those engaged in the "business of insurance" are subject to the Act, except for health plans offered by health carriers. Because long-term care insurance, disability income, employersponsored self-funded health plans, and dental- and vision-only coverages do not fall within the definition of "health plans," those insurers, too, may be subject to this provision, where not otherwise preempted.

Who may bring a claim under this Act?

Any "first party claimant" who has been unreasonably denied coverage or a claim for benefits may bring a claim under this Act, provided the claimant serves advance notice to the insurer as required under the Act. "First party claimant" means anyone asserting a right to payment as a

covered person under an insurance policy or contract.

"First party claimant" likely includes an insured seeking coverage under a liability policy protecting an insured from a third-party suit.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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