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1. The Company did not meet the requirements of WAC 284-50-650, which requires an insurer to respond to inquiries from the Office of the Insurance Commissioner within 15 working days of receipt of the inquiry. The Company is instructed to adhere to the 15 working day standard when responding to OIC inquiries. (Page 7, Complaint Standard #1, Appendix I)

2. WAC 284-30-380(3) requires that notification of delays in claim processing, including the reason for the delay, must be given to the claimant every 30 days. The Company did not regularly communicate with the claimant as to status of the pending claim in 13 files. The Company is instructed to add a procedure to the Individual Disability Benefits Guide showing when status notification is required, and to add this requirement to their quality audit procedure to ensure compliance. (Page 10, Claim Standard #5, Appendix V)

3. WAC 284-30-350(7) requires that any payment made before final claim determination (Reservation of Rights payments) be accompanied by a letter that states there is a possibility that the payment(s) may need to be reimbursed to the insurer. The Reservation of Rights letter used by the Company does not disclose this policy provision. The Company is instructed to revise the Reservation of Rights letter immediately to include the required disclosure, or to amend the policies to remove the company’s right to recover benefits paid out prior to the final claim determination. (Page 12, Claims Standard #7, Appendix VII)

RECOMMENDATIONS

1.

WAC 284-30-360(1) and (4) require a Company to acknowledge receipt of claim

notification within 10 working days of notification of the claim. The Company should

ensure that acknowledgment of all claim notification occurs as required. (Page 9, Claim

Standard #1, Appendix II)

2.

WAC 284-30-340 requires that claim files contain all notes and work papers

pertaining to the claim. Our review found that 4 files contained missing documentation. While this is within the tolerance level established for this examination, we recommend

that the company ensure that all documentation is available in the claim file, including details related to the calculation of settlement amounts. (Page 11, Claim Standard #6, Appendix VI)

APPENDIX I

COMPLAINT STANDARD #1

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