Governor Signs Bill That Makes Unreasonable Limits Set by Insurers
an Unfair Practice
Virginia Gov. Tim Kaine recently signed a bill that will deem the
setting of arbitrary and unreasonable limits on what an insurer
will allow as reimbursement for materials as an unfair settlement
practice. The bill will take effect on July 1, 2008.
The law modifies section 38.2-517 of the Code of Virginia, and
adds the following to a list of unfair settlement practices:
6. Engage in the practice of capping. As used in this subdivision,
"capping" means the setting of arbitrary and unreasonable limits
on what an insurer will allow as reimbursement for paint and materials.
The rest of the already-enacted list includes items such as requiring
an insured or claimant to utilize a specific repair facility, engaging
in any act of coercion or intimidation to cause an insured or claimant
to utilize a specific facility for repairs, failing to disclose
to the insured or claimant that a third-party administrator is not
the insurer and is acting on behalf of the insurer (in a glass claim
specifically) and failure to advise an insured or claimant when
a third-party administrator or insurer has a financial interest
in a specific repair facility.
The bill originally was introduced in the Senate by Sen. J. Chapman
The code notes that the Virginia insurance commissioner will investigate,
with the written authorization of the insured or claimant, any written
complaints received pursuant to this section of the code, whether
the complaints are made by a consumer or repair facility.
HERE for the full text of the recently passed bill.
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