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Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 375

previous next Effective - 28 Aug 2007bottom

  375.445.  Company operating fraudulently or in bad faith, penalties. — 1.  It is unlawful for any insurance company transacting business under the laws of this state to:

  (1)  Conduct its business fraudulently;

  (2)  Fail to carry out its contracts in good faith; or

  (3)  Habitually and as a matter of business practice compelling claimants under policies or liability judgment creditors of the insured to either accept less than the amount due under the terms of the policy or resort to litigation against the company to secure payment of the amount due.

  2.  If the director determines that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, the director may issue such administrative orders as authorized under section 374.046.  Each practice in violation of this section is a level two violation under section 374.049. Each act as a part of a practice does not constitute a separate violation under section 374.049.  The director may also suspend or revoke the license or certificate of authority of such person for any willful violation.

  3.  If the director believes that a person has engaged, is engaging in, or has taken a substantial step toward engaging in an act, practice or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of this section or a rule adopted or order issued pursuant thereto, the director may maintain a civil action for relief authorized under section 374.048.  Each practice violation of this section is a level two violation under section 374.049. Each act as part of a practice does not constitute a separate violation under section 374.049.

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(L. 1967 p. 516, A.L. 2007 S.B. 66)


---- end of effective   28 Aug 2007 ----

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