Insurance

Administration

Rule R590-192: Unfair Accident and Health Insurance Claim Settlement Practice Rule

Effective Date: 10/29/2025

Admin. Code Reference: R590-192

Rule Type: Current Rule

R590. Insurance, Administration.

R590-192. Unfair Accident and Health Insurance Claim Settlement Practice Rule.

R590-192-1. Authority.

This rule is promulgated by the commissioner pursuant to Sections 31A-2-201, 31A-2-216, 31A-21-312, 31A-22-629, 31A-26-301, 31A-26-301.6, and 31A-26-303.

R590-192-2. Purpose and Scope.

(1) The purpose of this rule is to:

(a) set standards for the investigation and disposition of an accident and health insurance claim; and

(b) identify an unfair claim practice.

(2) This rule applies to an insurer and an authorized agent.

R590-192-3. Definitions.

Terms used in this rule are defined in Sections 31A-1-301, 31A-22-629, and 29 CFR 2560.503-1(m). Additional terms are defined as follows:

(1) "Authorized agent" means an individual, corporation, association, organization, partnership, or other legal entity authorized to represent an insurer with respect to a claim.

(2) "Claim file" means a record that can accurately and reliably reproduce the original material regarding a claim, its investigation, adjustment, and settlement.

(3) "Claimant" means an insured or an insured's legal representative, including an immediate family member designated by the insured.

(4) "Concurrent care" or "ongoing care" means an insurer approves an ongoing course of treatment over a specific period or number of treatments.

(5) "Days" means calendar days.

(6) "Documentation" means a physical or an electronic record related to a claim.

(7) "General business practice" means a pattern of conduct in a business.

(8) "Investigation" means an activity of an insurer related to the determination of liability of a claim.

(9) "Medical necessity" means:

(a) a health care service or product that a prudent health care professional would provide to a patient to prevent, diagnose, or treat an illness, injury, disease, or its symptoms in a manner that is:

(i) in accordance with generally accepted standards of medical practice in the United States;

(ii) clinically appropriate in terms of type, frequency, extent, site, and duration;

(iii) not primarily for the convenience of the patient, physician, or other health care provider; and

(iv) covered under the policy; and

(b) if a medical question-of-fact exists, "medical necessity" shall include the most appropriate available supply or level of service for the individual in question, considering potential benefits and harms to the individual, and known to be effective.

(i) For an intervention not yet in widespread use, the effectiveness shall be based on scientific evidence.

(ii) For an established intervention, the effectiveness shall be based on:

(A) scientific evidence;

(B) professional standards; and

(10) "Misrepresentation" for a health benefit plan means an intentional misrepresentation of a material fact.

(11) "Notice of loss" means a claimant's notice that reasonably informs an insurer of the facts related to a claim.

(12) "Proof of loss" means a claimant's reasonable documentation in support of a claim.

(13)(a) "Scientific evidence" means:

(i) a scientific study published or accepted by a medical journal that meets nationally recognized standards for a scientific manuscript and that submits its published articles for review by experts who are not part of the editorial staff; or

(ii) a finding, a study, or research conducted by or under the auspices of the federal government or a nationally recognized federal research institute.

(b) "Scientific evidence" does not include:

(i) published peer-reviewed literature sponsored by:

(A) a pharmaceutical manufacturing company; or

(B) a medical device manufacturer; or

(ii) a single study without other supportable studies.

R590-192-4. File and Record Documentation.

(1) An insurer's claim file is subject to examination by the commissioner.

(2) To aid in an examination, an insurer shall maintain:

(a) claim data that is accessible and retrievable for examination, including:

(i) the policy number;

(ii) the certificate number, if any;

(iii) a duplicate of the policy, as issued;

(iv) the claim number;

(v) the date of loss;

(vi) the date the notice of loss was received, if required;

(vii) the date the proof of loss was received;

(viii) the date an investigation began and was complete;

(ix) the date of a benefit determination;

(x) the date of the settlement of the claim;

(xi) the type of settlement, indicated as:

(A) payment, including the amount paid;

(B) settled without payment; or

(xii) documentation supporting how the claim was settled and how any payments were calculated; and

(xiii) other documentation relied upon for claim settlement;

(b) detailed documentation in each claim file permitting the reconstruction of the insurer's activities related to the claim; and

(3) The data in Subsection (2) shall:

(a) be available for all open and closed files for at least the most recent three-year period; or

(b) for a Utah domiciled insurer, be available from the date of the previous examination by the commissioner.

R590-192-5. Disclosure of Policy Provisions.

(1) An insurer or an authorized agent shall disclose to a claimant any benefit, limitation, or exclusion of a policy that relates to a diagnosis or service of a particular claim presented.

(2) An insurer or an authorized agent shall disclose to a claimant any provision of a policy that relates to an inquiry regarding coverage.

R590-192-6. Notice and Proof of Loss.

(1)(a) A notice of loss to an insurer, if required, is considered timely if made according to the terms of the policy, this rule, and Section 31A-21-312.

(b) A notice of loss may be given to an insurer or an authorized agent.

(d) The general business practice of an insurer when accepting a notice of loss shall be consistent for all policyholders.

(2)(a) A proof of loss to an insurer is considered timely if made according to the terms of the policy, this rule, and Section 31A-21-312.

(b) A proof of loss requirement may not be unreasonable and shall consider the circumstances surrounding a given claim.

R590-192-7. Notification.

(1) An insurer shall notify a claimant of a benefit determination and include:

(a) the specific reason or reasons for the benefit determination;

(b) reference to the specific policy provision that the benefit determination is based upon;

(d) with a notice of an adverse benefit determination:

(i) a description of the appeal procedures and any time limitations;

(ii) a description of how to initiate an appeal along with conspicuous disclosure of the insurer's address and telephone number that is followed by a statement regarding assistance available at the Utah Insurance Department, Office of Consumer Health Assistance; and

(iii) the claimant's right to bring civil action.

(2)(a) If a claimant fails to follow an insurer's procedure for filing a pre-service claim, an insurer or authorized agent shall:

(i) notify the claimant of the failure;

(ii) provide the claimant with the proper procedure to file a claim for benefits; and

(iii) provide notification to the claimant:

(A) no later than five days from the failure; or

(B) within 24 hours of the failure for a claim involving urgent care.

(b) Notification of a failure may be oral unless written notification is requested by a claimant.

(3)(a) A notice of adverse benefit determination for a health benefit plan shall comply with Rule R590-261.

(b) Subsection (3)(a) does not apply to a grandfathered health plan defined in 45 CFR 147.140.

(4) A notice of an adverse benefit determination for income replacement insurance shall:

(a) provide the criteria relied upon in making the adverse determination; and

(b) disclose that a copy of the criteria will be provided free of charge upon request.

(5) If an adverse benefit determination is based on medical necessity, experimental treatment, or similar exclusion or limit, an insurer shall provide either:

(a) an explanation of the scientific or clinical judgment for the determination that applies the terms of the plan to the insured's medical circumstances; or

(b) a statement that the explanation in Subsection (5)(a) will be provided free of charge upon request.

(6) An adverse benefit determination for a claim involving urgent care shall:

(a) provide written or electronic notification to the claimant no later than three days after an oral notification; and

(b) provide a description of the expedited review process applicable to each claim.

R590-192-8. Minimum Standards for Prompt, Fair, and Equitable Benefit Determination and Settlement.

(1)(a) A benefit determination time period begins once an insurer receives a claim, regardless of whether all necessary information was filed with the original claim.

(b) If an insurer requires an extension due to a claimant's failure to submit necessary information, the time period for making a decision is tolled from the date the notice is sent to the claimant through:

(i) the date the claimant provides the necessary information; or

(ii) 48 hours after the end of the time period for the claimant to provide the additional information.

(2)(a) When a claim involves urgent care, an insurer shall notify a claimant of the insurer's benefit decision as soon as possible, considering the medical exigencies of the situation, but no later than 72 hours after receipt of the claim.

(b) An insurer shall determine whether a claim is urgent based on the information provided by the claimant.

(c) If a claimant does not provide sufficient information for an insurer to make a decision, the insurer must notify the claimant as soon as possible, but not later than 24 hours after receipt of the claim, and specify the information that is required.

(d) A claimant shall be given reasonable time, but not less than 48 hours, to provide the required information.

(e) An insurer shall notify a claimant of the insurer's decision as soon as possible, but not later than 48 hours after the earlier of:

(i) the insurer's receipt of the requested information; or

(ii) the end of the time given to the claimant to provide the information.

(3)(a) A reduction or termination of concurrent care during treatment is considered an adverse benefit determination.

(b) Before a reduction or termination of concurrent care occurs, an insurer shall provide a claimant notice, with sufficient time to appeal and receive a decision on the adverse benefit determination.

(c)(i) A claimant may request an extension of concurrent care beyond what is approved.

(ii) If a request for an extension is made at least 24 hours before the end of the concurrent care, the insurer shall notify the claimant of the insurer's decision as soon as possible, but not later than 24 hours after receipt of the request.

(iii) If the request for extension does not involve urgent care, the insurer shall notify the claimant of the insurer's benefit decision using the response times for a post-service claim.

(4)(a) An insurer shall notify a claimant of the insurer's pre-service benefit decision within 15 days of receipt of the request for care.

(b)(i) If an insurer cannot make a decision within 15 days due to circumstances beyond the insurer's control, such as late receipt of medical records, the insurer may extend the time up to 15 additional days.

(ii) If an insurer chooses to extend up to 15 days, the insurer shall notify the claimant before the expiration of the original 15 days.

(i) state what information the claimant must submit; and

(ii) give the claimant at least 45 days to submit the requested information.

(d) If a pre-service claim determination is made and the medical care is rendered, the claim shall be processed according to the time requirements of a post-service claim.

(5)(a) For a post-service claim, an insurer shall notify a claimant of the insurer's benefit decision within 30 days of receipt of a notice of loss.

(b)(i) If an insurer is unable to make a decision within 30 days due to circumstances beyond the insurer's control, such as late receipt of medical records, the insurer may extend the time up to 15 additional days.

(ii) If an insurer chooses to extend up to 15 days, the insurer shall notify the claimant before the expiration of the original 30 days.

(i) state what information the claimant must submit; and

(ii) give the claimant at least 45 days to submit the requested information.

(6) An insurer offering a health benefit plan shall provide continued coverage for an ongoing course of treatment pending the outcome of an internal appeal.

(7) Except for a grandfathered individual health benefit plan as defined in 45 CFR 147.140, an insurer offering an individual health benefit plan shall provide only one level of internal appeal before the final determination is made.

R590-192-9. Additional Standards for Prompt, Fair, and Equitable Benefit Determination and Settlement for Income Replacement Insurance.

(1) An insurer shall notify a claimant of an adverse benefit determination of an income replacement insurance benefit within 45 days of receipt of a claim.

(a)(i) If an insurer is unable to make a decision within 45 days due to circumstances beyond the insurer's control, the insurer may extend the time up to 30 additional days.

(ii) If an insurer chooses to extend up to 30 days, the insurer shall notify the claimant before the expiration of the original 45 days.

(iii) The notification shall include:

(A) the circumstances requiring the extension; and

(B) the date by which the insurer expects to render a decision.

(b)(i) If an insurer cannot render a decision within the first 30-day extension due to circumstances beyond the insurer's control, the insurer may extend the time up to 30 additional days.

(ii) If an insurer chooses to extend up to 30 days, the insurer shall notify the claimant before the expiration of the first 30-day extension.

(iii) The notification shall include:

(A) the circumstances requiring the extension; and

(B) the date by which the insurer expects to render a decision.

(i) the basis for the extension;

(ii) each unresolved issue that prevents a decision on the claim;

(iii) the information needed to resolve each unresolved issue; and

(iv) that the claimant is given at least 45 days to provide the information.

R590-192-10. Unfair Claim Settlement Practices.

The commissioner finds that the following acts or general business practices are unfair claim settlement practices and are misleading, deceptive, unfairly discriminatory, overreaching, or an unreasonable restraint on competition:

(1) concealing from or failing to fully disclose to a claimant a benefit, limitation, exclusion, coverage, or other relevant provision of a policy under which a claim is presented;

(2) denying or threatening to deny a claim, rescinding, canceling, or threatening to rescind or cancel coverage under a policy for any reason that is not clearly described in a policy as a reason for denial, cancellation, or rescission;

(3) refusing to settle a claim without conducting a reasonable investigation;

(4) denying or paying a claim without:

(a) providing a notification or an explanation of benefits describing the exclusion or benefit; and

(b) explaining how the denial or payment is calculated;

(5) failing to provide a claimant a written explanation of the evidence of an investigation or the claim file materials supporting a denial of a claim based on misrepresentation or fraud, if misrepresentation or fraud is the basis for the denial;

(6) compensating an employee, producer, or contractor an amount based on savings to the insurer due to denying or reducing payment of a claim, unless the compensation relates to the discovery of a billing or processing error;

(7) failing to pay a claim following receipt of a proof of loss if liability is reasonably clear under one coverage to influence settlement:

(a) under another portion of the policy; or

(b) under another policy;

(8) advising a claimant not to obtain the services of an attorney or other advocate, or suggesting a claimant will receive less money if an attorney is used to:

(a) pursue a claim; or

(b) advise on the merits of a claim;

(9) misleading a claimant about applicable statutes of limitation;

(10) deducting from a claim payment made under one policy the premium owed by the claimant on another policy, unless the claimant consents;

(11) failing to pay a claim on the basis that responsibility for payment of the claim should be assumed by someone else, except as provided by a policy provision;

(12) issuing a check or draft in partial settlement that contains language that releases an insurer from total liability;

(13) refusing to provide a written basis for the denial of a claim upon demand of a claimant;

(14) refusing to pay a reasonable incurred expense to a claimant if the expense resulted from a delay, prohibited by this rule, in a claim settlement or claim payment;

(15) failing to pay interest at the legal rate under Title 15, Chapter 1, Interest:

(a) on an amount that is overdue and unpaid within 20 days of completing an investigation; or

(b) to a health care provider on an amount that is overdue under Section 31A-26-301.6;

(16) failing to provide a claimant with an explanation of benefits; and

(17) for a health benefit plan, failing to:

(a) permit a claimant to review the claim file and present evidence as part of the claim and appeal process;

(b) provide a claimant, at no cost, new or additional evidence considered, relied upon, or generated by the insurer in connection with the claim; or

R590-192-11. Severability.

If any provision of this rule, Rule R590-192, or its application to any person or situation is held invalid, such invalidity does not affect any other provision or application of this rule that can be given effect without the invalid provision or application. The remainder of this rule shall be given effect without the invalid provision or application.

KEY: insurance law

Date of Last Change: October 29, 2025

Notice of Continuation: June 10, 2024

Authorizing, and Implemented or Interpreted Law: 31A-1-301; 31A-2-201; 31A-2-204; 31A-2-308; 31A-21-312; 31A-26-303