Unfair claims settlement practices
Dear Ellana,
Please be informed of the Unfair Claims Settlement Practices that are prohibited under Section 247 of the Insurance Code of the PhilippinesL@ Presidential Decree 612, as amended by Republic Act 10607L@ which states:
“Section 247. (a) No insurance comM pany doing business in the Philippines shall refuse, without just cause, to pay or settle claims arising under coverages proM vided by its policies, nor shall any such company engage in unfair claim settleM ment practices. Any of the following acts by an insurance company, if committed without just cause and performed with such frequency as to indicate a general business practice, shall constitute unfair claim settlement practices:
( 1) Knowingly misrepresenting to claimants pertinent facts or policy proviM sions relating to coverage at issue;
( 2) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;
(3) Failing to adopt and implement reasonable standards for the prompt invesM tigation of claims arising under its policies;
(4) Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear; or
(5) Compelling policy holders to instiM tute suits to recover amounts due under its policies by offering without justifiM able reason substantially less than the amounts ultimately recovered in suits brought by them.
(b) Evidence as to numbers and types of valid and justifiable complaints to the Commissioner against an insurance company, and the Commissioner’s comM plaint experience with other insurance companies writing similar lines of insurM ance shall be admissible as evidence in an administrative or judicial proceeding brought under this section.
(c) If it is found, after notice and an opportunity to be heard, that an insurM ance company has violated this section, each instance of non-compliance with paragraph ( a) may be treated as a separate violation of this section and SHALL BE CONSIDERED SUFfiCIENT CAUSE for the suspension or revocation of THE COMPANY’S CERTIfiCATE OF AUTHORITY.” [Emphasis supplied]
Clearly, failure to effectuate prompt, fair and reasonable settlement of claims is considered by the abovementioned law as an Unfair Claims Settlement Practice, which is prohibited by the aforementioned law.
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated. Editor’snote:DearPAOisadailycolumn of the Public Attorney’s Office.QuesM tions for Chief Acosta may be sent to dearpao@manilatimes.net