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REFERENCE TITLE: workers' compensation insurance; claim processing |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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HB 2455 |
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Introduced by Representative Farnsworth E
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AN ACT
AMENDING SECTION 23‑930, ARIZONA REVISED STATUTES; RELATING TO WORKERS' COMPENSATION ENFORCEMENT.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 23-930, Arizona Revised Statutes, is amended to read:
23-930. Unfair claim processing practices; bad faith; civil penalties
A. The commission has exclusive jurisdiction as prescribed in this section over complaints involving that arise out of claim processing, including alleged unfair claim processing practices or bad faith by an employer, self‑insured employer, insurance carrier or claims processing representative relating to any aspect of this chapter. The commission shall investigate allegations of unfair claim processing or bad faith either on receiving a complaint or on its own motion. THE REMEDIES that are PROVIDED IN THIS SECTION ARE THE SOLE AND EXCLUSIVE ADMINISTRATIVE AND JUDICIAL REMEDIES AVAILABLE FOR ALL COMPLAINTS AND CAUSES OF ACTION ARISING OUT OF CLAIM PROCESSING.
B. If the commission finds that unfair claim processing or bad faith has occurred in the handling of a particular claim THERE is NO EVIDENCE AND NO LEGAL BASIS TO SUPPORT AN INTENTIONAL DENIAL OR DELAY IN PAYMENT OF BENEFITS, it shall award the claimant, in addition to any benefits it finds are due and owing, a benefit penalty of twenty‑five per cent of the benefit amount ordered to be paid or five hundred dollars, whichever is more. THE COMMISSION MUST FIND THAT THE CLAIMANT HAS SUSTAINED ECONOMIC DAMAGE, A PERMANENT AGGRAVATION OF THE COMPENSABLE INJURY OR GREATER PERMANENT DISABILITY AS A RESULT OF THE CLAIM PROCESSING THAT IS NOT REMEDIED BY THE AWARD OF BENEFITS BEFORE A PENALTY CAN BE AWARDED TO THE CLAIMANT. THE PENALTY AWARDED TO THE CLAIMANT IS UP TO FIVE THOUSAND DOLLARS FOR EACH FINDING OF WRONGFUL CLAIM PROCESSING, UNFAIR CLAIM PROCESSING OR BAD FAITH.
C. IF THE COMMISSION FINDS THAT THERE IS NO EVIDENCE AND NO LEGAL BASIS TO SUPPORT AN INTENTIONAL DENIAL OR DELAY IN PAYMENT OF BENEFITS AND FINDS THAT THE CLAIMANT DID NOT SUSTAIN THE ECONOMIC DAMAGE OR PHYSICAL INJURY PRESCRIBED IN SUBSECTION B OF THIS SECTION, THE COMMISSION MAY IMPOSE A CIVIL PENALTY OF UP TO ONE THOUSAND DOLLARS FOR EACH VIOLATION FOUND.
C. D. If the commission finds that an employer, self‑insured employer, insurance carrier or claim processing representative has a history or pattern of repeated unfair claim processing practices or bad faith, it may impose a civil penalty of up to one ten thousand dollars for each violation found. The civil penalty shall be deposited, pursuant to sections 35‑146 and 35‑147, in the state general fund.
E. IF THE COMMISSION FINDS THAT THERE IS NO EVIDENCE AND NO LEGAL BASIS TO SUPPORT A COMPLAINT OF WRONGFUL CLAIM PROCESSING, UNFAIR CLAIM PROCESSING OR BAD FAITH RECEIVED FROM THE CLAIMANT OR THE CLAIMANT’S REPRESENTATIVE, THE COMMISSION SHALL IMPOSE A CIVIL PENALTY AGAINST THE PERSON FILING THE COMPLAINT OF UP TO ONE THOUSAND DOLLARS FOR EACH COMPLAINT. THE CIVIL PENALTY SHALL BE DEPOSITED, PURSUANT TO SECTIONS 35-146 AND 35-147, IN THE STATE GENERAL FUND.
F. IN ASSESSING AN APPROPRIATE PENALTY, THE COMMISSION SHALL CONSIDER THE SERIOUSNESS OF THE VIOLATION, THE HISTORY AND EXTENT OF PREVIOUS VIOLATIONS, ACTIONS TAKEN TO RECTIFY OR MINIMIZE THE CONSEQUENCES OF THE VIOLATION AND THE PENALTY NECESSARY TO DETER FUTURE VIOLATIONS.
D. G. Any party aggrieved by an order of the commission under this section may request a hearing pursuant to section 23‑947. The hearing and decision shall be conducted pursuant to the provisions of section 23‑941. The award or order of the administrative law judge is subject to review pursuant to sections 23‑942, 23‑943 and 23‑951.
E. H. The commission shall adopt by rule a definition of unfair claim processing practices and bad faith. In adopting a rule under this subsection, the commission shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the commission's own experience in processing workers' compensation claims and the workers' compensation and insurance laws of this state.
F. I. This section shall does not be construed as limiting limit or interfering interfere with the authority of the department of insurance as provided by law to regulate any insurance carriers, including the jurisdiction of the department of insurance over unfair claim settlement practices as provided in section 20‑461.