House Bill 690

AN ACT TO AMEND SECTION 83-13-13, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE INSURER SHALL PAY FIRE LOSS INSURANCE CLAIMS WITHIN A CERTAIN PERIOD OF TIME IF THE CLAIM IS A CLEAN CLAIM; TO DEFINE "CLEAN CLAIM"; TO PROVIDE PENALTIES IF CLEAN CLAIMS ARE NOT PAID ON A TIMELY BASIS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 83-13-13, Mississippi Code of 1972, is amended as follows:

83-13-13. In case of destruction or damage of property by fire where the same is insured against fire, it shall be the duty of the insurance company or companies liable for such loss, within fifteen (15) days after receiving notice thereof, to furnish to the insured proper blanks upon which to make the required proof of such loss, with full directions as to what proof is required to secure the payment of the policy. If the insurance company fails to comply with this section within fifteen (15) days after the giving of such notice, the failure of the insured to make proper proof of loss prior to the suit shall be no defense to a suit upon the policy, and in all cases the insured shall have a reasonable time in which to make such proof after the blanks and directions are received.

All benefits payable under the policy for any loss, other than loss for which the policy provides any periodic payment, shall be paid within sixty (60) days after receipt of due written proof of such loss in the form of a clean claim. Benefits due under the policies and claims are overdue if not paid within sixty (60) days after the insurer receives a clean claim. A "clean claim" means a claim received by an insurer for adjudication and which requires no further information, adjustment or alteration in order to be processed and paid by the insurer. A claim is clean if it has no defect or impropriety, including any lack of substantiating documentation, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this provision. A clean claim includes resubmitted claims with previously identified deficiencies corrected.

A clean claim does not include any of the following:

(a) A duplicate claim, which means an original claim and its duplicate when the duplicate is filed within thirty (30) days of the original claim;

(b) Claims which are submitted fraudulently or that are based upon material misrepresentations.

Not later than sixty (60) days after the date the insurer actually receives a claim, the insurer shall pay the appropriate benefit in full, or any portion of the claim that is clean, and notify the insured of the reasons why the claim or portion thereof is not clean and will not be paid and what substantiating documentation and information is required to adjudicate the claim as clean. Any claim or portion thereof resubmitted with the supporting documentation and information requested by the insurer shall be paid within twenty (20) days after receipt.

For purposes of this provision, the term "pay" means that the insurer shall either send cash or a cash equivalent by United States mail, or send cash or a cash equivalent by other means such as electronic transfer, in full satisfaction of the appropriate benefit due the insured. To calculate the extent to which any benefits are overdue, payment shall be treated as made on the date a draft or other valid instrument was placed in the United States mail to the last known address of the insured in a properly addressed, postpaid envelope, or, if not so posted, or not sent by United States mail, on the date of delivery of payment to the provider or insured.

Subject to due written proof of loss, all accrued benefits for loss for which the policy provides periodic payment shall be paid for a period of time which must not be less frequently than monthly.

If the claim is not denied for valid and proper reasons by the end of the applicable time period prescribed in this provision, the insurer must pay the insured interest on accrued benefits at the rate of one and one-half percent (1-1/2%) per month accruing from the day after payment was due on the amount of the benefits that remain unpaid until the claim is finally settled or adjudicated. Whenever interest due pursuant to this provision is less than One Dollar ($1.00), such amount shall be credited to the account of the person or entity to whom such amount is owed.

If the insurer fails to pay benefits when due, the person entitled to such benefits may bring action to recover such benefits, any interest which may accrue as provided in this section and any other damages as may be allowable by law.

No action at law or in equity shall be brought to recover on this policy before the expiration of sixty (60) days after written proof of loss has been furnished in accordance with the requirements of this section. No such action shall be brought after the expiration of three (3) years after the time written proof of loss is required to be furnished.

SECTION 2. This act shall take effect and be in force from and after July 1, 2004.