Cochran, Davis & Associates, P.C. Ace Your Deposition and California Fair Claims Practices...

Cochran, Davis & Associates, P.C.

Ace Your Deposition Ace Your Deposition and California Fair and California Fair Claims Practices Claims Practices

CertificationCertificationJoan E. Cochran, Esq.Joan E. Cochran, Esq.

Jeff Bolson, Esq.Jeff Bolson, Esq.Cochran, Davis & Associates, P.C.Cochran, Davis & Associates, P.C.


Outline of TopicsOutline of Topics• Deposition Preparation TechniquesDeposition Preparation Techniques• Reading and Understanding Body LanguageReading and Understanding Body Language• Rules to Follow While TestifyingRules to Follow While Testifying• Dealing with Difficult AttorneyDealing with Difficult Attorney• Case Study of Way Cool Modeling AgencyCase Study of Way Cool Modeling Agency• Adjusting to the UnexpectedAdjusting to the Unexpected• Proper Methods of Handling California Proper Methods of Handling California

ClaimsClaims• California Fair Claims Settlement PracticesCalifornia Fair Claims Settlement Practices


Importance of Body Importance of Body LanguageLanguage

• 55% of communication is non-verbal55% of communication is non-verbal• 38% of communication is voice 38% of communication is voice

inflectioninflection• Only 7% is actual communicationOnly 7% is actual communication

• ““Actions speak louder than words”Actions speak louder than words”


Everyone Participate in this Everyone Participate in this ExperimentExperiment

• Oath to Tell the Truth Before the Oath to Tell the Truth Before the Deposition BeginsDeposition Begins

• Everyone raise your right handEveryone raise your right hand• Freeze your hand positionFreeze your hand position• Position of your hand, fingers and Position of your hand, fingers and

arm can give messages as to your arm can give messages as to your testimonytestimony


5 Things Learned From 5 Things Learned From the Position of Your Handthe Position of Your Hand

• If Hand Rigid and Fingers Wide ApartIf Hand Rigid and Fingers Wide Apart– Terrified and will tell the whole truthTerrified and will tell the whole truth

• If Hand Straight Up and Finger Tightly TogetherIf Hand Straight Up and Finger Tightly Together– Analytical HonestyAnalytical Honesty

• If Hand and Fingers Bent ForwardIf Hand and Fingers Bent Forward– Will Lie and cover the truthWill Lie and cover the truth

• If Two Fingers Together and Two Fingers ApartIf Two Fingers Together and Two Fingers Apart– Analytical Honesty and Readily Type HonestyAnalytical Honesty and Readily Type Honesty

• If Hand Bent BackIf Hand Bent Back– Bend over backwards to convince you but is telling a Bend over backwards to convince you but is telling a

lielie


Oath of NixonOath of Nixon


Oath of JFKOath of JFK


Body LanguageBody Language• Eye BrowsEye Brows• EyesEyes• MouthMouth• Hand GesturesHand Gestures• Body StanceBody Stance• VoiceVoice• Head IndicationsHead Indications


Body Gestures to AvoidBody Gestures to Avoid• Scratching the head or neckScratching the head or neck• Jiggling of FeetJiggling of Feet• Moving your body in the ChairMoving your body in the Chair• Faking SmileFaking Smile• Rolling Eyes from the left and then to Rolling Eyes from the left and then to

the rightthe right• Chewing GumChewing Gum• Breathing HeavyBreathing Heavy• Avoiding Eye ContactAvoiding Eye Contact


Body Language to AvoidBody Language to Avoid• Talking too quicklyTalking too quickly

– Voice FlattensVoice Flattens– Loses ToneLoses Tone– Volume DropsVolume Drops

• Avoid Touching Your NoseAvoid Touching Your Nose– Shows Hiding SomethingShows Hiding Something

• Rubbing ChinRubbing Chin– Shows Holding Back the TruthShows Holding Back the Truth


Body Language to AvoidBody Language to Avoid• Avoid tapping fingers Avoid tapping fingers • Avoid Running Fingers Through Avoid Running Fingers Through

Your HairYour Hair• Avoid FidgetingAvoid Fidgeting

– Shows you are nervous and want to run Shows you are nervous and want to run awayaway


Dealing with an Dealing with an Intimidating AttorneyIntimidating Attorney

• Practice Actions showing ConfidencePractice Actions showing Confidence• Hand Shake – firm but openHand Shake – firm but open• Eye ContactEye Contact• Look opposing counsel squarely in the eye Look opposing counsel squarely in the eye

on introduction.on introduction.• During deposition, if he is intimidating During deposition, if he is intimidating

stare above his eyes at his forehead stare above his eyes at his forehead (Makes him feel uncomfortable)(Makes him feel uncomfortable)

• Relax shoulders when seated, no slouchingRelax shoulders when seated, no slouching


Dealing with an Dealing with an Intimidating AttorneyIntimidating Attorney

• Palms Open, avoid hiding handsPalms Open, avoid hiding hands• Confident Voice, speak slowlyConfident Voice, speak slowly• Lean a Little Forward to Show Paying Lean a Little Forward to Show Paying

Attention and stand your groundAttention and stand your ground• Take Your TimeTake Your Time• Clasp Hands Behind Your HeadClasp Hands Behind Your Head• Arrogant Gesture, Shows attorney Arrogant Gesture, Shows attorney

has no power over youhas no power over you


Witnesses who did not Witnesses who did not listen to their attorney listen to their attorney

when preparing for when preparing for depositiondeposition

What Not to Do During a Deposition

http://www.youtube.com/watch?v=zL99U_ukJPI&feature=email


Rules for TestifyingRules for Testifying

BeBeTruthful.Truthful.


Rules for TestifyingRules for Testifying• Don’t Volunteer, Only Answer the Don’t Volunteer, Only Answer the

Question Being Asked! Question Being Asked! Testify only Testify only about what is necessary.about what is necessary.


Don’t Speculate! Don’t Speculate! Only Testify as to Only Testify as to

Your Own Your Own Personal Personal

Knowledge.Knowledge.

Avoid Avoid ““Always” “Never” Always” “Never”

Response.Response.

Rules of TestifyingRules of Testifying


Take your Take your Time, Think Time, Think

and Wait and Wait before you before you

respond. You respond. You Set the Pace.Set the Pace.

Rules on TestifyingRules on Testifying


Avoid Humor Avoid Humor and Sarcasm.and Sarcasm.




Read the Read the Documents Documents

Before Before Answering the Answering the

Question.Question.



Listen to Your Listen to Your Lawyer’s Lawyer’s

Objections as Objections as Clues for Clues for

Problems with Problems with the Question. the Question.



If you do not If you do not understand understand the question the question

say so.say so.



Periods of Periods of Silence Should Silence Should be Welcomed.be Welcomed.



Do Not Do Not Explain Your Explain Your

Thought Thought Process.Process.

As if I could even think during this…


Tips on Giving Tips on Giving TestimonyTestimony

Do not fear Do not fear memory memory

lapses; Rely lapses; Rely on documents on documents

to trigger to trigger memory.memory.

?



Ask for a Ask for a Break if Break if Needed.Needed.


Case StudyCase StudyFACT PATTERN FOR DEPOSITIONFACT PATTERN FOR DEPOSITION• THE UNDERLYING CASETHE UNDERLYING CASE: : On 16 On 16

April 2009, Way Cool Modeling April 2009, Way Cool Modeling Agency executive Tina Trouble was Agency executive Tina Trouble was arguing with Koppa Feel, her arguing with Koppa Feel, her assistant, about Feel’s demand for assistant, about Feel’s demand for overtime to complete a project overtime to complete a project before the week end. before the week end.


Case StudyCase Study•


Case StudyCase Study• Beautiful Brenda, a model employee walked by Beautiful Brenda, a model employee walked by

and, wanting to find out whether her week end and, wanting to find out whether her week end with Koppa was going to be ruined, bent down with Koppa was going to be ruined, bent down by the water cooler as if to get a cup of water. by the water cooler as if to get a cup of water. Koppa could not help but stare. Tina Trouble, Koppa could not help but stare. Tina Trouble, upset and frustrated at Koppa’s sexism and upset and frustrated at Koppa’s sexism and Brenda’s flirtation, smacked Brenda Brenda’s flirtation, smacked Brenda Beautiful’s bottom. Not having eyes in the Beautiful’s bottom. Not having eyes in the back of her bottom, Brenda assumed Koppa back of her bottom, Brenda assumed Koppa Feel had once again subjected her to Feel had once again subjected her to unwanted advances, straightened and slapped unwanted advances, straightened and slapped Koppa across his cheek. Koppa across his cheek.


Case StudyCase Study• Tina Trouble thought nothing further Tina Trouble thought nothing further

of the incident, but hard feelings of the incident, but hard feelings festered between Brenda and her festered between Brenda and her immediate supervisor Koppa. Their immediate supervisor Koppa. Their professional relationship irretrievably professional relationship irretrievably severed, and Brenda being no longer severed, and Brenda being no longer so beautiful, Way Cool fired Brenda so beautiful, Way Cool fired Brenda B. on 20 May 2009, saying she no B. on 20 May 2009, saying she no longer looked good in lingerie. longer looked good in lingerie.


Case StudyCase Study• On 15 June 2009 Brenda B. filed suit On 15 June 2009 Brenda B. filed suit

against Way Cool and Koppa F., against Way Cool and Koppa F., alleging intentional sex alleging intentional sex discrimination and harassment. discrimination and harassment. Way Cool notified its EPL insurer, Way Cool notified its EPL insurer, Alan Dale of Excess XS, which Alan Dale of Excess XS, which immediately reserved its rights. On immediately reserved its rights. On 1 July 2009 Way Cool retained 1 July 2009 Way Cool retained Howie Gotchu to defend the Brenda Howie Gotchu to defend the Brenda Beautiful suit.Beautiful suit.


Case StudyCase Study• Howie Gotchu received the Howie Gotchu received the

assignment two weeks before a assignment two weeks before a response to the complaint was due. response to the complaint was due. Tim Trial Lawyer was busy in trial in Tim Trial Lawyer was busy in trial in another matter when the case came another matter when the case came in and completely forgot to calendar in and completely forgot to calendar the response date. the response date.


Case StudyCase Study• A default was entered on 18 July 2010. Tim A default was entered on 18 July 2010. Tim

remembered that no answer had been filed remembered that no answer had been filed when he received a request by Excess XS for when he received a request by Excess XS for a copy of the answer just after August 3, 2009. a copy of the answer just after August 3, 2009. Tim checked the court file and learned of the Tim checked the court file and learned of the default but believed he could have the default default but believed he could have the default judgment set aside because the Complaint had judgment set aside because the Complaint had been improperly served, and the default been improperly served, and the default judgment was sent to an incorrect address. judgment was sent to an incorrect address. Since Way Cool was a big client, Tim didn’t Since Way Cool was a big client, Tim didn’t tell them about the default, which he thought tell them about the default, which he thought was “no big deal” since relief from default was was “no big deal” since relief from default was “virtually automatic”, and he didn’t want to “virtually automatic”, and he didn’t want to worry them for no reason. worry them for no reason.


Case StudyCase Study• Having heard nothing from Howie Having heard nothing from Howie

Gotchu, on 13 December 2009, Alan Gotchu, on 13 December 2009, Alan A. Dale of Excess XS had the court A. Dale of Excess XS had the court record checked and learned no record checked and learned no answer had been filed and a default answer had been filed and a default entered. Dale promptly notified Tina entered. Dale promptly notified Tina Trouble at Way Cool, and denied Trouble at Way Cool, and denied coverage for “Failure to cooperate.”coverage for “Failure to cooperate.”


Case StudyCase Study• On January 23rd of the new year, On January 23rd of the new year,

Tina told Tim Trial Lawyer, as she Tina told Tim Trial Lawyer, as she was leaving his condominium one was leaving his condominium one morning, “I need you to fix this, morning, “I need you to fix this, honey.” Tim immediately asked a honey.” Tim immediately asked a first year associate, Ami Good, to first year associate, Ami Good, to look at the file and prepare a look at the file and prepare a Motion. Motion.


Case StudyCase Study• On 15 February 2010, Ami wrote a memo On 15 February 2010, Ami wrote a memo

telling Tim that relief from default was telling Tim that relief from default was 50-50 at best, and that the Motion to 50-50 at best, and that the Motion to Quash was “iffy.” Tim later denied Quash was “iffy.” Tim later denied having received the memo. Ami was having received the memo. Ami was terminated on 22 February for unrelated terminated on 22 February for unrelated reasons a week after her memo. Tim filed reasons a week after her memo. Tim filed a Motion for Relief from Default in March a Motion for Relief from Default in March of 2010, alleging both excusable neglect of 2010, alleging both excusable neglect and that service of process was improper. and that service of process was improper.


Case StudyCase Study• On March 3, 2007, Linda Litigation, the partner On March 3, 2007, Linda Litigation, the partner

in charge of litigation at Howie Gotchu, in charge of litigation at Howie Gotchu, circulated a memo to her department asking if circulated a memo to her department asking if anyone thought there might be a claim in the anyone thought there might be a claim in the next year. No one responded. On 7 March next year. No one responded. On 7 March 2010, Howie Gotchu completed and sent its 2010, Howie Gotchu completed and sent its renewal application, denying any current claims renewal application, denying any current claims and representing there were “no circumstances and representing there were “no circumstances we think would give rise to a claim against us.” we think would give rise to a claim against us.” Linda Litigation found out about the default Linda Litigation found out about the default judgment in mid April, she said. judgment in mid April, she said.


Case StudyCase Study• On May 1, 2010 Safe Bet Underwriters On May 1, 2010 Safe Bet Underwriters

agreed to renew the E&O malpractice agreed to renew the E&O malpractice policy with a $10 million limit for the policy with a $10 million limit for the policy term April 1, 2010 through April 1, policy term April 1, 2010 through April 1, 2011. The policy excluded claims arising 2011. The policy excluded claims arising from circumstances known to the from circumstances known to the Assured “which might give rise to a Assured “which might give rise to a claim” but which were not reported to claim” but which were not reported to Underwriters. Excess XS filled in the Underwriters. Excess XS filled in the final 20% of the slip. final 20% of the slip.


Case StudyCase Study• The court scheduled argument on the The court scheduled argument on the

Motion to be relieved of default or in Motion to be relieved of default or in the alternative to quash service of the alternative to quash service of process on March 27, 2010, and process on March 27, 2010, and advised the parties that it would hear a advised the parties that it would hear a Mandatory Settlement Conference the Mandatory Settlement Conference the same day. Ten days before the MSC, same day. Ten days before the MSC, Tina T suggested that Howie Gotchu Tina T suggested that Howie Gotchu might want to bring its E & O insurer might want to bring its E & O insurer “just in case”. “just in case”.


Case StudyCase Study• The parties did not settle and the The parties did not settle and the

court denied the motions, but agreed court denied the motions, but agreed to stay its order so the parties could to stay its order so the parties could further brief the issues and/or further brief the issues and/or engage in settlement negotiations. engage in settlement negotiations. On 29 March Way Cool agreed to On 29 March Way Cool agreed to settle the Brenda B. lawsuit for $10 settle the Brenda B. lawsuit for $10 million. Excess XS learned of the million. Excess XS learned of the settlement on April 2, 2010.settlement on April 2, 2010.


Case StudyCase Study• THE LEGAL MALPRACTICE CLAIMTHE LEGAL MALPRACTICE CLAIM: :

On May 6, 2010, Way Cool Modeling On May 6, 2010, Way Cool Modeling Agency filed suit for legal malpractice Agency filed suit for legal malpractice against Howie Gotchu. Under local trial against Howie Gotchu. Under local trial delay reduction rules for professional delay reduction rules for professional liability cases, a Mandatory Settlement liability cases, a Mandatory Settlement Conference was set for June 15, 2010, Conference was set for June 15, 2010, and “ an insurance representative with and “ an insurance representative with full authority to settle” was required to full authority to settle” was required to attend. attend.


Case StudyCase Study• Justine Thyme, who wanted to learn the claims Justine Thyme, who wanted to learn the claims

side of the business, attended for Underwriters. side of the business, attended for Underwriters. Howie Gotchu’s managing partner Linda Howie Gotchu’s managing partner Linda Litigation attended the mediation, but not Tim Litigation attended the mediation, but not Tim Trial Lawyer. During a break in the proceedings, Trial Lawyer. During a break in the proceedings, Tina Trouble, attending for Way Cool Modeling Tina Trouble, attending for Way Cool Modeling Agency followed Justine into the loo and Agency followed Justine into the loo and demanded to know why Underwriters hadn’t demanded to know why Underwriters hadn’t attended the mandatory settlement conference in attended the mandatory settlement conference in the underlying sexual harassment case, shouting the underlying sexual harassment case, shouting “all of this fuss could have been avoided” and “I “all of this fuss could have been avoided” and “I want your policy limits, within twenty days”. want your policy limits, within twenty days”.


Case StudyCase Study• After the mediation, Justine spoke with After the mediation, Justine spoke with

an attorney in Connecticut, Knowle an attorney in Connecticut, Knowle Little, who opined that Underwriters Little, who opined that Underwriters could clearly rescind the LPL policy. could clearly rescind the LPL policy. Knowle Little further stated that while Knowle Little further stated that while he had no experience in sexual he had no experience in sexual harassment litigation, he doubted the harassment litigation, he doubted the case was really worth $10 MM based case was really worth $10 MM based upon the information he was given. upon the information he was given.

•


Case StudyCase Study• On her return to London, Justine called a meeting of On her return to London, Justine called a meeting of

the following market to explain what she had learned the following market to explain what she had learned during the Mandatory Settlement Conference. Allan A. during the Mandatory Settlement Conference. Allan A. Dale, from Excess XS, didn’t speak because he thought Dale, from Excess XS, didn’t speak because he thought a claim might be made on his EPL policy. Reaching a a claim might be made on his EPL policy. Reaching a consensus, Underwriters agreed to reject the policy consensus, Underwriters agreed to reject the policy limits demand, and to offer $2MM, “based upon strong limits demand, and to offer $2MM, “based upon strong coverage defenses” as reflected in Justine’s claim file. coverage defenses” as reflected in Justine’s claim file. Underwriters also agreed to participate up to that Underwriters also agreed to participate up to that amount on a 50 50 basis only if Howie Gotchu also “felt amount on a 50 50 basis only if Howie Gotchu also “felt the pain” based upon Underwriters strong coverage the pain” based upon Underwriters strong coverage defenses as mentioned by Knowle Little. Justine defenses as mentioned by Knowle Little. Justine informed Linda Litigation of Underwriters’ position, informed Linda Litigation of Underwriters’ position, and Linda Litigation demanded that Underwriters and Linda Litigation demanded that Underwriters settle the case because the potential damages were $10 settle the case because the potential damages were $10 MM and Way Cool “might win.” MM and Way Cool “might win.”


Claim NotesClaim Notes• June 15June 15thth

Attended Mandatory Settlement Conference. Had $5 million in authority. Case did not Attended Mandatory Settlement Conference. Had $5 million in authority. Case did not settle. settle.

Strangest thing happened at the mediation, the insured, Tina Trouble followed me into the Strangest thing happened at the mediation, the insured, Tina Trouble followed me into the looloo

and said: “all of this fuss could have been avoided” and “I want your policy limits, within and said: “all of this fuss could have been avoided” and “I want your policy limits, within twentytwenty

days”. She stated that she wanted to know why we were not at the mediation in the days”. She stated that she wanted to know why we were not at the mediation in the underlyingunderlying

sexual harassment case. I don’t trust our insured. Claim is questionable; I don’t think sexual harassment case. I don’t trust our insured. Claim is questionable; I don’t think BrendaBrenda

Beautiful is that pretty either.Beautiful is that pretty either.

• June 16June 16thth

Discussion with coverage counsel about policy limit demand. He believes insurers have Discussion with coverage counsel about policy limit demand. He believes insurers have strong right to rescind the policy based upon failure to disclose default judgment. Also, valid strong right to rescind the policy based upon failure to disclose default judgment. Also, valid defenses. Tim Trial said relief from default was “virtually automatic”, and he didn’t want to defenses. Tim Trial said relief from default was “virtually automatic”, and he didn’t want to worry his client for no reason, therefore he never told his client about the default. worry his client for no reason, therefore he never told his client about the default.

• June 25June 25thth

Meeting with insurers regarding settlement. Underwriters agreed to reject the policy limits Meeting with insurers regarding settlement. Underwriters agreed to reject the policy limits demand, and to offer $2MM, based upon our strong coverage defenses according to demand, and to offer $2MM, based upon our strong coverage defenses according to coverage counsel and based upon claim evaluation. Underwriters agree to participate up to coverage counsel and based upon claim evaluation. Underwriters agree to participate up to that amount on a 50 50 basis only if Howie Gotchu participates and feels the pain. that amount on a 50 50 basis only if Howie Gotchu participates and feels the pain.


FAIR CLAIMS FAIR CLAIMS PRACTICES PRACTICES

REGULATIONSREGULATIONS• History and ScopeHistory and Scope• PreamblePreamble• DefinitionsDefinitions• Record KeepingRecord Keeping• Representations of Policy Provisions and BenefitsRepresentations of Policy Provisions and Benefits• Duties Upon Receipt of ClaimDuties Upon Receipt of Claim• Training and CertificationTraining and Certification• Standards for Prompt Fair and Equitable Standards for Prompt Fair and Equitable

SettlementsSettlements• PenaltiesPenalties


FAIR CLAIMS PRACTICES FAIR CLAIMS PRACTICES REGULATIONSREGULATIONS

• HistoryHistory– First took effect on January 14, 1993First took effect on January 14, 1993

• Amended Twice (1) May 10, 1997 (2) July 23, 2003Amended Twice (1) May 10, 1997 (2) July 23, 2003• All insurers including non-admitted insurers must “adopt and All insurers including non-admitted insurers must “adopt and

communicate” to all claims agents, written standards for prompt communicate” to all claims agents, written standards for prompt investigation and processing of claims and shall do so within 90 investigation and processing of claims and shall do so within 90 days after the effective date of the regulations or revisions.days after the effective date of the regulations or revisions.

– Why Regulations Implemented?Why Regulations Implemented?– Royal Globe (1979)Royal Globe (1979)– Moradi Shalal (1988)Moradi Shalal (1988)– Response to Proposition 103Response to Proposition 103

• Ray Bouhris sued Insurance Commissioner Gellespie and Ray Bouhris sued Insurance Commissioner Gellespie and Department of Insurance to enforce regulationsDepartment of Insurance to enforce regulations

• Garamendi wanted more stringent regulations:Garamendi wanted more stringent regulations:(1) Annual certified reports showing number of : claims, denials, (1) Annual certified reports showing number of : claims, denials,

settlements, claims against insurers, fraudulent claims, timely settlements, claims against insurers, fraudulent claims, timely responses, claims where additional time requested, timely responses, claims where additional time requested, timely payments.payments.


Why is Certification Why is Certification Important When Private Important When Private

Causes of Action Based on Causes of Action Based on 790.03 are Barred?790.03 are Barred?

It is true that It is true that Moradi-Shalal v.Fireman’s Fund Ins. Companies, Moradi-Shalal v.Fireman’s Fund Ins. Companies, 46 Cal.3d 287 bars private causes of action based on section 46 Cal.3d 287 bars private causes of action based on section 790.03. But violations of the section "may evidence the 790.03. But violations of the section "may evidence the insurer's breach of duty to its insured under the implied insurer's breach of duty to its insured under the implied covenant" of good faith and fair dealing with its insured. covenant" of good faith and fair dealing with its insured. (Croskey et al., Cal. Practice Guide: Insurance Litigation, (Croskey et al., Cal. Practice Guide: Insurance Litigation, supra,supra, P 14:45.21, p. 14-15.) P 14:45.21, p. 14-15.)



ScopeScope– Applies to all insurers including non-admitted insurersApplies to all insurers including non-admitted insurers– Applies to sureties Applies to sureties – Surplus Lines broker considered licensee and/or claims agentSurplus Lines broker considered licensee and/or claims agent– Attorneys handling and settling claims considered claims agentAttorneys handling and settling claims considered claims agent– Insurers retaining adjusters subject to regulationsInsurers retaining adjusters subject to regulations– Insurers with no hands on involvement must “adopt and communicate to insurance Insurers with no hands on involvement must “adopt and communicate to insurance

agents the standards for prompt investigation and processing of claims.”agents the standards for prompt investigation and processing of claims.”– Agents and brokers subject to the regulations, even if activities are receiving and Agents and brokers subject to the regulations, even if activities are receiving and

transmitting notices of a claim. Therefore must:transmitting notices of a claim. Therefore must:(1) Send notices of claim immediately but no later than 15 days to the insurer(1) Send notices of claim immediately but no later than 15 days to the insurer(2) Must provide training to individuals responsible for transmitting such notices(2) Must provide training to individuals responsible for transmitting such notices(3) Must maintain records of claims handling activities and respond to Insurance (3) Must maintain records of claims handling activities and respond to Insurance Commissioner inquiriesCommissioner inquiries



Preamble (Section 2695.1) Preamble (Section 2695.1) – To delineate minimum standards for the settlement of To delineate minimum standards for the settlement of

claims which if violated knowingly on a single claims which if violated knowingly on a single occasion or repeatedly constitute an unfair claims occasion or repeatedly constitute an unfair claims settlement practice under Insurance Code Section settlement practice under Insurance Code Section 790.03(h)790.03(h)

– To promote “good faith, prompt, efficient and To promote “good faith, prompt, efficient and equitable” settlements on a cost effective basisequitable” settlements on a cost effective basis

– To discourage the filing of fraudulent claimsTo discourage the filing of fraudulent claims– To encourage prompt investigation of fraudulent claimsTo encourage prompt investigation of fraudulent claims



– Misconduct of claims agent can be imputed to insurerMisconduct of claims agent can be imputed to insurer»» Therefore, insurer should make sure every entity that Therefore, insurer should make sure every entity that

investigates, handles or settles California claims investigates, handles or settles California claims complies with complies with these regulationsthese regulations» Example: Regulations require insurer and non-admitted insurers » Example: Regulations require insurer and non-admitted insurers to:to:

(1) Refrain from using polygraph tests unless authorized (1) Refrain from using polygraph tests unless authorized by the by the policy. Must however still comply with state and policy. Must however still comply with state and federal federal rules regarding polygraph tests rules regarding polygraph tests

(2) Refrain from requiring unnecessary medical (2) Refrain from requiring unnecessary medical examinationsexaminations



• The Preamble of the Regulations The Preamble of the Regulations state:state:– ““Policy provisions relating to the Policy provisions relating to the

investigation, processing and investigation, processing and settlement of claims shall be consistent settlement of claims shall be consistent with or more favorable to the insured with or more favorable to the insured than the provisions of these than the provisions of these regulations.”regulations.”



• Types of insurance exempted:Types of insurance exempted:– Workers Compensation Workers Compensation – Liability insurance for the professional Liability insurance for the professional

malpractice of health care providers malpractice of health care providers (clinic, dispensary or health facility)(clinic, dispensary or health facility)

– ERISA plansERISA plans



• Types of Insurance newly subject to Types of Insurance newly subject to the Regulations:the Regulations:– Sureties (before treated separately)Sureties (before treated separately)– Home Protection Contracts and Home Home Protection Contracts and Home

Protection CompaniesProtection Companies– Medical Malpractice (no longer Medical Malpractice (no longer

excluded)excluded)



• Definitions (Section 2695.2) Definitions (Section 2695.2) • ““Claimant” means a first or third party Claimant” means a first or third party

claimantclaimant• ““Licensee” means “any person that holds a Licensee” means “any person that holds a

license. . . . or other entity for whom the license. . . . or other entity for whom the Insurance Commissioner’s consent is required Insurance Commissioner’s consent is required before transacting business in the state . . .”before transacting business in the state . . .”

• ““Notice of Claim”Notice of Claim”– ““any written or oral notification to an insurer any written or oral notification to an insurer

or its agent that reasonably apprises the or its agent that reasonably apprises the insurer that the claimant wishes to make a insurer that the claimant wishes to make a claim against a policy . . . and that a claim against a policy . . . and that a condition giving rise to the insurer’s condition giving rise to the insurer’s obligations under that policy may have obligations under that policy may have arisen.” It shall not include “any written or arisen.” It shall not include “any written or oral communication provided by an oral communication provided by an insured . . . solely for informational or insured . . . solely for informational or incident reporting purposes.”incident reporting purposes.”


FAIR CLAIMS PRACTICES FAIR CLAIMS PRACTICES REGULATIONSREGULATIONS• Definitions (cont.) Definitions (cont.)

– ““Insurer” means “a person licensed to issue or Insurer” means “a person licensed to issue or that issues an insurance policy or surety bond in that issues an insurance policy or surety bond in this state, or that otherwise transacts the this state, or that otherwise transacts the business of insurance in the state. . . . The term business of insurance in the state. . . . The term “insurer” for purposes of these regulations “insurer” for purposes of these regulations includes non-admitted insurers . . .The California includes non-admitted insurers . . .The California Earthquake Authority, . . . home protection Earthquake Authority, . . . home protection companies . . . The term insurer shall not include companies . . . The term insurer shall not include insurance agents and brokers, surplus line insurance agents and brokers, surplus line brokers and special lines surplus line brokers”brokers and special lines surplus line brokers”

– ““Claims agent” means “any person employed or Claims agent” means “any person employed or authorized by an insurer, to conduct an authorized by an insurer, to conduct an investigation of a claim on behalf of the insurer . investigation of a claim on behalf of the insurer . . .”. .”



• RECORD KEEPING (Section 2695.3)RECORD KEEPING (Section 2695.3)– All insurers shall:All insurers shall:

• ““Maintain claim data that are accessible”Maintain claim data that are accessible”– Claim numberClaim number– Date of lossDate of loss– Line of coverageLine of coverage– Date of payment of claimDate of payment of claim– Date of acceptanceDate of acceptance– Denial or date of closed without paymentDenial or date of closed without payment

• Maintain data for 4 yearsMaintain data for 4 years



• RECORD KEEPING (Section 2695.3)RECORD KEEPING (Section 2695.3)– Licensees must record in the file the date Licensees must record in the file the date

the licensee received, dates the licensee the licensee received, dates the licensee processed and the date the licensee processed and the date the licensee transmitted or mailed every material and transmitted or mailed every material and relevant document in the file.relevant document in the file.

– Maintain hard copy files or maintain claim Maintain hard copy files or maintain claim files accessible for the current year and files accessible for the current year and past 4 years.past 4 years.

– Ability to reconstruct critical datesAbility to reconstruct critical dates



• REPRESENTATION OF POLICY PROVISIONS REPRESENTATION OF POLICY PROVISIONS AND BENEFITSAND BENEFITS (Section 2695.4) (Section 2695.4)– No insurer shall misrepresent, conceal or No insurer shall misrepresent, conceal or

fail to disclose to a first party claimant or fail to disclose to a first party claimant or beneficiary all benefits, coverages, time beneficiary all benefits, coverages, time limits and other provisions.limits and other provisions.• When additional benefits may reasonably be When additional benefits may reasonably be

paid, the insurer shall immediately communicate paid, the insurer shall immediately communicate this fact to the insured and cooperate.this fact to the insured and cooperate.



• REPRESENTATION OF POLICY REPRESENTATION OF POLICY PROVISIONS AND BENEFITSPROVISIONS AND BENEFITS (Section (Section 2695.4)2695.4)– No Insurer shall deny a claim on the basis No Insurer shall deny a claim on the basis

of the claimant’s failure to exhibit of the claimant’s failure to exhibit property, unless there is documentation in property, unless there is documentation in the file (1) of demand by the insurer, and the file (1) of demand by the insurer, and unfounded refusal by the claimant to show unfounded refusal by the claimant to show property, or (2) breach of any policy property, or (2) breach of any policy provision requiring disclosure of property.provision requiring disclosure of property.



• REPRESENTATION OF POLICY REPRESENTATION OF POLICY PROVISIONS AND BENEFITS (Section PROVISIONS AND BENEFITS (Section 2695.4)2695.4)– Except where a time limit is specified in Except where a time limit is specified in

the policy, no insurer shall require a the policy, no insurer shall require a first party claimant to give notice of a first party claimant to give notice of a claim or proof of claim within a claim or proof of claim within a specified time.specified time.• Make sure policy wording is clearMake sure policy wording is clear



• REPRESENTATION OF POLICY PROVISIONS REPRESENTATION OF POLICY PROVISIONS AND BENEFITS (Section 2695.4)AND BENEFITS (Section 2695.4)– No insurer shall: No insurer shall:

1. Request claimant to sign a release that extends 1. Request claimant to sign a release that extends beyond the subject matter which gave rise to the beyond the subject matter which gave rise to the claim, unless fully explained in writing and claim, unless fully explained in writing and claimant not represented by counsel.claimant not represented by counsel. 2. Be precluded from including Civil Code Section 2. Be precluded from including Civil Code Section 1542 release language, provided Section 1542 1542 release language, provided Section 1542 release language is explained if claimant not release language is explained if claimant not represented by counsel.represented by counsel.



• DUTIES UPON RECEIPT OF DUTIES UPON RECEIPT OF COMMUNICATION (Section 2695.5)COMMUNICATION (Section 2695.5)– Immediately or within 15 days respond Immediately or within 15 days respond

to a claimant’s communication with a to a claimant’s communication with a complete response based on the facts complete response based on the facts known to licensee. known to licensee.

– Respond to inquiry by Dept. of Respond to inquiry by Dept. of Insurance within 21 days.Insurance within 21 days.



• DUTIES UPON RECEIPT OF DUTIES UPON RECEIPT OF COMMUNICATION (Section 2695.5)COMMUNICATION (Section 2695.5)– Upon receiving notice of a claim the licensee must: Upon receiving notice of a claim the licensee must:

• Immediately transmit notice to the insurer (2695.5(d) Immediately transmit notice to the insurer (2695.5(d) The The following was stricken: Failure of the licensee or claims following was stricken: Failure of the licensee or claims agent to immediately transmit notice of claim to the agent to immediately transmit notice of claim to the insurer shall constitute a separate and distinct violation . . insurer shall constitute a separate and distinct violation . . .”.”

Immediately, but no more than 15 days (2695.5(e)):Immediately, but no more than 15 days (2695.5(e)):– Acknowledge receipt of such notice Acknowledge receipt of such notice – Provide necessary claim formsProvide necessary claim forms– Begin necessary investigation of claimBegin necessary investigation of claim– Now applies to Disability Insurance.Now applies to Disability Insurance.

• No requirement that notice be in writing unless policy No requirement that notice be in writing unless policy specifies (2695.5(f)).specifies (2695.5(f)).



EXEMPTION TO 15 DAY RESPONSE EXEMPTION TO 15 DAY RESPONSE FOR NOTICE OF CLAIM DEADLINE IF:FOR NOTICE OF CLAIM DEADLINE IF:1.1. EXTRAORDINARY CIRCUMSTANCES EXTRAORDINARY CIRCUMSTANCES WOULD SEVERELY AND MATERIALLY WOULD SEVERELY AND MATERIALLY AFFECT COMPANY’S ABILITY TO CONDUCT AFFECT COMPANY’S ABILITY TO CONDUCT NORMAL OPERATIONS TO MEET NORMAL OPERATIONS TO MEET COMPLIANCE.COMPLIANCE.

2.2. NOTICE OF LEGAL ACTION AGAINST NOTICE OF LEGAL ACTION AGAINST INSURER ORINSURER ORINSURED.INSURED.



• Training and Certification (Section Training and Certification (Section 2695.6)2695.6)– ““Every insurer shall adopt and Every insurer shall adopt and

communicate to all its claims agents communicate to all its claims agents written standards for the prompt written standards for the prompt investigation and processing of claims investigation and processing of claims and shall do so within ninety days after and shall do so within ninety days after the effective date of these regulations the effective date of these regulations and any revisions thereto.”and any revisions thereto.”



• Training and Certification (Section Training and Certification (Section 2695.6)2695.6)– All licensees shall provide thorough and All licensees shall provide thorough and

adequate training regarding these adequate training regarding these regulations to all their claims agents. regulations to all their claims agents. Licensees shall certify that their claims Licensees shall certify that their claims agents have been trained regarding agents have been trained regarding these regulations and any revisions. these regulations and any revisions. Licensees need not train or certify “duly Licensees need not train or certify “duly licensed attorneys.”licensed attorneys.”



• Training and Certification (Section 2695.6)Training and Certification (Section 2695.6)– All licensees shall demonstrate compliance by:All licensees shall demonstrate compliance by:1.1. Individual Licensee must annually certify under penalty Individual Licensee must annually certify under penalty

of perjury that she has read and understands the of perjury that she has read and understands the regulations and amendmentsregulations and amendments

2.2. The principal of an Entity Licensee must annually The principal of an Entity Licensee must annually execute a certification under penalty of perjury execute a certification under penalty of perjury

A.A. THAT THE LICENCEE’S CLAIMS ADJUSTING THAT THE LICENCEE’S CLAIMS ADJUSTING MANUAL CONTAINS A COPY OF THESE MANUAL CONTAINS A COPY OF THESE REGULATIONSREGULATIONS

B.B. THAT CLEAR WRITTEN INSTRUCTIONS THAT CLEAR WRITTEN INSTRUCTIONS REGARDING THE PROCEDURES TO BE REGARDING THE PROCEDURES TO BE FOLLOWED TO EFFECT PROPER COMPLIANCE FOLLOWED TO EFFECT PROPER COMPLIANCE WERE PROVIDED TO ALL CLAIMS AGENTS.WERE PROVIDED TO ALL CLAIMS AGENTS.



• Training and Certification (Section 2695.6)Training and Certification (Section 2695.6)– All licensees shall demonstrate compliance by: All licensees shall demonstrate compliance by:

(Cont.)(Cont.)3. Where the licensee 3. Where the licensee retains insurance adjusters retains insurance adjusters

(independent stricken),(independent stricken), the licensee must provide the licensee must provide training to the insurance adjusters regarding the training to the insurance adjusters regarding the regulations and annually certify under penalty of regulations and annually certify under penalty of perjury that such training is provided. Alternately, perjury that such training is provided. Alternately, the insurance adjuster may annually certify in the insurance adjuster may annually certify in writing, under penalty of perjury that he or she writing, under penalty of perjury that he or she has read and understands the regulations and all has read and understands the regulations and all amendments or has successfully completed a amendments or has successfully completed a training seminar which explains these regulations.training seminar which explains these regulations.



• Training and Certification (Section Training and Certification (Section 2695.6) (Cont.)2695.6) (Cont.)– All licensees shall demonstrate compliance All licensees shall demonstrate compliance

by:by: 4. A copy of the certification required 4. A copy of the certification required

shall be maintained at the principal place shall be maintained at the principal place of business of the licensee.of business of the licensee.5. The annual certification must be 5. The annual certification must be completed completed by September 1 of each by September 1 of each calendar year.calendar year.


STANDARDS FOR PROMPT, FAIR STANDARDS FOR PROMPT, FAIR AND EQUITABLE SETTLEMENTS AND EQUITABLE SETTLEMENTS

(Section 2695.7(a))(Section 2695.7(a))• No insurer shall discriminate in its No insurer shall discriminate in its

claims settlement practices based claims settlement practices based upon the claimant’s upon the claimant’s age,age, race, gender, race, gender, income, religion, language, sexual income, religion, language, sexual orientation, ancestry, national origin, orientation, ancestry, national origin, or physical disability or upon the or physical disability or upon the territory of the property or person territory of the property or person insured.insured.


STANDARDS FOR PROMPT, FAIR AND STANDARDS FOR PROMPT, FAIR AND EQUITABLE SETTLEMENTS EQUITABLE SETTLEMENTS

(Section 2695.7(b))(Section 2695.7(b))• Upon receiving proof Upon receiving proof

of claim, every insurer of claim, every insurer shall immediately but shall immediately but in no event more than in no event more than 40 days later, accept 40 days later, accept or deny the claim, in or deny the claim, in whole or part. whole or part. The The amounts accepted or amounts accepted or denied shall be clearly denied shall be clearly documented unless documented unless claim denied in its claim denied in its entirety. (2695.7(b)).entirety. (2695.7(b)).

• If more time is required If more time is required than is needed to than is needed to determine whether a claim determine whether a claim should be accepted and/or should be accepted and/or denied in whole or in part, denied in whole or in part, every insurer shall provide every insurer shall provide the claimant written the claimant written notice of the need for notice of the need for additional time and additional time and information. Written information. Written notice shall be provided notice shall be provided every 30 days until the every 30 days until the claim is resolved. claim is resolved. (2695.7(c)).(2695.7(c)).



(Section 2695.7(b)(1))(Section 2695.7(b)(1)) Denial or Rejection of Claim in Whole or in Denial or Rejection of Claim in Whole or in

PartPart• If denied or rejected in whole or in If denied or rejected in whole or in part:part:

– Must be in writingMust be in writing– Statement listing all bases for such rejection or denial Statement listing all bases for such rejection or denial – Factual and legal bases for each reason within Factual and legal bases for each reason within

insurer’s knowledgeinsurer’s knowledge– Policy references to provision, condition or exclusion Policy references to provision, condition or exclusion

must be given if denial or rejection of a first party must be given if denial or rejection of a first party claimclaim

– Must provide an explanation of the application of the Must provide an explanation of the application of the provision, condition or exclusion.provision, condition or exclusion.

– Denial,rejection, dispute of liability or damages of a Denial,rejection, dispute of liability or damages of a third party claim must be in writingthird party claim must be in writing



(Section 2695.7)(Section 2695.7) Denial or Rejection of Claim in Whole or in Denial or Rejection of Claim in Whole or in

PartPart– Must include a statement that if claimant believes Must include a statement that if claimant believes all or part ofall or part of the claim has been wrongfully denied the claim has been wrongfully denied or rejected he or she may have the matter reviewed or rejected he or she may have the matter reviewed by the California Department of Insurance and by the California Department of Insurance and include the address and telephone number.include the address and telephone number.

– No disclosure required if it would reasonably be No disclosure required if it would reasonably be expected to alert a claimant to the fact that the expected to alert a claimant to the fact that the claim is suspected to be fraudulentclaim is suspected to be fraudulent

– Every insurer shall conduct and diligently pursue a Every insurer shall conduct and diligently pursue a thorough, fair and objective investigation and shall thorough, fair and objective investigation and shall not persist in seeking information not reasonably not persist in seeking information not reasonably required for or material to the resolution of a claim required for or material to the resolution of a claim dispute. Section 2695.7(c)(2)(d)dispute. Section 2695.7(c)(2)(d)


New Change as of 9/21/05New Change as of 9/21/05• 2695.7(r) Ensuring the Accuracy of 2695.7(r) Ensuring the Accuracy of

DataData“ “ A Strict Liability Standard”A Strict Liability Standard”The proposed section specifies that insurers must The proposed section specifies that insurers must take reasonable steps to ensure the accuracy of take reasonable steps to ensure the accuracy of data used in evaluating and settling claims. data used in evaluating and settling claims. Although insurers are permitted to use third party Although insurers are permitted to use third party vendor services to determine damages, vendor services to determine damages, they are they are required by law to offer adequate, accurate required by law to offer adequate, accurate settlements no matter what information and settlements no matter what information and resources are used to establish damages.resources are used to establish damages.



7 FACTORS TO SHOW IF SETTLEMENT IS LOW 7 FACTORS TO SHOW IF SETTLEMENT IS LOW (Section 2695.7(g))(Section 2695.7(g))

• The extent to which the The extent to which the insurer considered insurer considered evidence submitted by evidence submitted by the claimant to support the claimant to support the value of a claimthe value of a claim

• The extent to which the The extent to which the insurer considered legal insurer considered legal authority or evidence authority or evidence made knownmade known

• The extent to which the The extent to which the insurer considered insurer considered advice of its claims advice of its claims adjuster as to the adjuster as to the amount of damagesamount of damages

• Any other credible Any other credible evidence evidence

• The extent to which the The extent to which the insurer considered the insurer considered the advice of its counsel that advice of its counsel that there was a substantial there was a substantial likelihood of recovery in likelihood of recovery in excess of policy limitsexcess of policy limits

• The procedures used by The procedures used by the insurer in the insurer in determining the dollar determining the dollar amountamount

• Extent to which the Extent to which the insurer considered the insurer considered the probable liability of the probable liability of the insured and the likely insured and the likely jury verdictjury verdict



(Section 2695.7(p) and (q))(Section 2695.7(p) and (q))• Every insurer shall provide written Every insurer shall provide written

notification to a first party claimant as to notification to a first party claimant as to whether the insurer intends to pursue whether the insurer intends to pursue subrogation of the claim. Where an insurer subrogation of the claim. Where an insurer elects not to pursue subrogation, or elects not to pursue subrogation, or discontinues pursuit of subrogation, it discontinues pursuit of subrogation, it shall include in its notification a statement shall include in its notification a statement that any recovery to be pursued is the that any recovery to be pursued is the responsibility of the first party claimant. responsibility of the first party claimant. No notification required if deductible is No notification required if deductible is waived, there is no deductible, the loss waived, there is no deductible, the loss does not exceed the deductible or no legal does not exceed the deductible or no legal basis for subrogation.basis for subrogation.



(Section 2695.7(p) and (q))(Section 2695.7(p) and (q))• A subrogation demand shall include a A subrogation demand shall include a

first party claimant’s deductible. first party claimant’s deductible. Subrogation Recoveries must be shared Subrogation Recoveries must be shared on a proportionate basis with first party on a proportionate basis with first party claimant. No deduction for legal or other claimant. No deduction for legal or other expenses unless outside attorney or expenses unless outside attorney or collection agency retained. (collection agency retained. (Not applicable Not applicable to disability or health insurance.)to disability or health insurance.)


Additional Standards Applicable to Additional Standards Applicable to First First Party and Commercial Property Party and Commercial Property

InsuranceInsurance (Section 2695.9) (Section 2695.9)• When a residential or commercial property When a residential or commercial property

insurance policy provides for adjustment and insurance policy provides for adjustment and settlement of first party losses the following settlement of first party losses the following standards apply:standards apply:– No insurer shall require or suggest that the insured No insurer shall require or suggest that the insured

have the property repaired by a specific individual or have the property repaired by a specific individual or entity unless referral is requested by the claimant or entity unless referral is requested by the claimant or the claimant has been informed in writing of the the claimant has been informed in writing of the right to select a repair individual or entity and the right to select a repair individual or entity and the insurer shall cause the damaged property to be insurer shall cause the damaged property to be restored to no less than its condition prior to the loss restored to no less than its condition prior to the loss and repaired in a manner which meets accepted and repaired in a manner which meets accepted trade standards for good and workmanlike trade standards for good and workmanlike construction at no additional cost to the claimant construction at no additional cost to the claimant other than as stated in the policy. 2695.9(b), (c) (1) other than as stated in the policy. 2695.9(b), (c) (1) and (2)and (2)


Additional Standards Applicable to Additional Standards Applicable to First First Party and Commercial Property Party and Commercial Property

Insurance (Section 2695.9(d)) (cont.)Insurance (Section 2695.9(d)) (cont.)• If losses are settled on the basis of a written scope If losses are settled on the basis of a written scope

and or estimate prepared by or for the insurer, the and or estimate prepared by or for the insurer, the insurer shall supply the claimant with a copy of each insurer shall supply the claimant with a copy of each document upon which the settlement is based. The document upon which the settlement is based. The estimate prepared by or for the insurer shall be in estimate prepared by or for the insurer shall be in accordance with applicable policy provisions, of an accordance with applicable policy provisions, of an amount which will restore the damaged property to amount which will restore the damaged property to no less than its condition prior to the loss and which no less than its condition prior to the loss and which will allow for repairs to be made in a manner which will allow for repairs to be made in a manner which meets accepted trade standards for good and meets accepted trade standards for good and workmanlike construction. The insurer shall take workmanlike construction. The insurer shall take reasonable steps to verify that the repair or reasonable steps to verify that the repair or rebuilding costs utilized by the insurer or its claims rebuilding costs utilized by the insurer or its claims agents are accurate and representative of costs in the agents are accurate and representative of costs in the local market area.local market area.


Additional Standards Applicable to Additional Standards Applicable to First Party and Commercial First Party and Commercial Property InsuranceProperty Insurance (Section (Section

2695.9(d)) 2695.9(d)) • If the claimant subsequently contends, based upon a If the claimant subsequently contends, based upon a

written estimate which he or she obtains, that written estimate which he or she obtains, that necessary repairs will exceed the written estimate necessary repairs will exceed the written estimate prepared by or for the insurer, the insurer shall: prepared by or for the insurer, the insurer shall: – (1) pay the difference between its written estimate (1) pay the difference between its written estimate

and a higher estimate obtained by the claimant; or, and a higher estimate obtained by the claimant; or, – (2) if requested by the claimant, promptly provide (2) if requested by the claimant, promptly provide

the claimant with the name of at least one repair the claimant with the name of at least one repair individual that will make the repairs for the individual that will make the repairs for the amount of the written estimate. The insurer shall amount of the written estimate. The insurer shall cause the damaged property to be restored to no cause the damaged property to be restored to no less than its condition prior to the loss and which less than its condition prior to the loss and which will allow for repairs in a manner which meets will allow for repairs in a manner which meets accepted trade standards for good and accepted trade standards for good and workmanlike construction at no additional cost to workmanlike construction at no additional cost to claimantclaimant


PENALTIESPENALTIES(Section 2695.12)(Section 2695.12)

The Department has issued penalties from The Department has issued penalties from $5,000 to $10,000 per act. (Insur. Code $5,000 to $10,000 per act. (Insur. Code Section 790.035)Section 790.035)

If prior improper conduct, penalties range If prior improper conduct, penalties range from $5,000 to $65,000. (Insur. Code from $5,000 to $65,000. (Insur. Code Section 790.07)Section 790.07)

Penalties could be as much as $1 Million.Penalties could be as much as $1 Million. Revocation of license or halt placement of Revocation of license or halt placement of

business with non-complying insurer. business with non-complying insurer. Insur. Code Section 790.07)Insur. Code Section 790.07)


TIME DEADLINES TIME DEADLINES CALIFORNIA FAIR CLAIMS REGULATIONSCALIFORNIA FAIR CLAIMS REGULATIONS

IMMEDIATELY

15-DAY DEADLINES

Insurer toacknowledge

claim2695.5 (e)(1)

Respond to Insured’sinquires

2695.5 (b)

Provide necessaryclaim information

to Insured2695.5 (e)(2)

Commence investigation of

claim2695.5 (e)(3)

Give copy of 790.03 and inform Insured of regulations

and website790.034 (b)

30-DAY DEADLINES

40-DAY DEADLINE

60-DAY DEADLINE

Agent must notify Insurer of Claim2695.5 (d)

Insurer to notify Insured of Statute of Limitations if Within 60 days before Statutes’ expiration. 2695.7 (f)Not applicable if claimant has legal representation.

Accept or deny claim and/or advise if more time needed. 2695.7 (b)

Inform claimant of running of Statute of Limitations. 2695.7 (f)

Pay accepted amountof Claim 2695.7 (h)

If extended time is needed & requestedreport to Insured every 30 days

2695.7 (c)(1)

Pay negotiated settlement amount

2695.7 (h)

Report every 30 days if advised add’l time needed

2695.2 (c)(1)

Immediately or w/i 5 DaysPreauthorize Non-emergency

Medical

269511.(3)


JOAN E. COCHRAN, Esq.JOAN E. COCHRAN, Esq.Jeff Bolson, Esq.Jeff Bolson, Esq.

Cochran, Davis & Associates, P.C.Cochran, Davis & Associates, P.C.36 Malaga Cove Plaza Second Floor36 Malaga Cove Plaza Second Floor

Palos Verdes, California 90274Palos Verdes, California 90274www.cochranlaw1.comwww.cochranlaw1.com

Cochran, Davis & Associates, P.C. Ace Your Deposition and California Fair Claims Practices...

Documents

Transcript of Cochran, Davis & Associates, P.C. Ace Your Deposition and California Fair Claims Practices...