SECTION 365:15-3-7. Standards for prompt, fair and equitable settlements applicable to all insurers

(a)   Claims accepted or denied within 45 days.

(1)   Within 45 business days after receipt by the property and casualty insurer of properly executed proof of loss, the first party claimant shall be advised of the acceptance or denial of the claim by the insurer. If investigation cannot reasonably be completed within such time the insurer shall notify the claimant within 45 business days after receipt of the proofs of loss giving reasons why more time is needed. No insurer shall deny a claim on the grounds of a specific policy provision, condition, or exclusion unless reference to such provision, condition, or exclusion is included in the denial. The denial must be given to the claimant in writing and the claim file of the insurer shall contain a copy of the denial.

(2)   Where there is a reasonable basis supported by specific information available for review by the Commissioner that the first party claimant had fraudulently caused or contributed to the loss by arson, the insurer is relieved from the requirements of this section. Provided, however, that the claimant shall be advised of the acceptance or denial of the claim within a reasonable time for full investigation after receipt by the insurer of a properly executed proof of loss.

(b)   Notation of denial in claim file until confirmed in writing. If a claim is denied for reasons other than those described in (a) of this section and is made by any other means than writing, an appropriate notation shall be made in the claim file of the property and casualty insurer until such time as a written confirmation can be made.

(c)   Notification of delay in determination of acceptance or denial. If the property and casualty insurer needs more time to determine whether a first party claim should be accepted or denied, it shall so notify the first party claimant within 45 business days after receipt of the proofs of loss, giving the reasons more time is needed. If the investigation remains incomplete, the insurer shall, forty-five days from the date of the initial notification and every forty-five days thereafter, send to such claimant a letter setting forth the reasons additional time is needed for investigation.

(d)   Failure to settle on grounds of another party's liability. Insurers shall not fail to settle first party claims on the basis that responsibility for payment should be assumed by others except as may otherwise be provided by policy provisions.

(e)   Negotiations shall not be delayed unreasonably. Insurers shall not continue to delay negotiations for settlement with a claimant who is neither an attorney nor represented by an attorney, for a length of time which causes the claimant's rights to be affected by a statute of limitations or a policy or contract time limit, without giving the claimant written notice that the time limit may be expiring and may affect the claimant's rights. Such notice shall be given to first party claimants thirty days before the date on which such time limit may expire. Such notice shall be given to third party claimants sixty days before the date on which such time limit may expire.

(f)   Rights of third party claimant. No insurer shall make statements which indicate that the rights of a third party claimant may be impaired if a form or release is not completed within a given period of time unless the statement is given for the purpose of notifying the third party claimant of a provision of a statute of limitations.

(g)   Lawsuit supercedes time limitations. If a lawsuit on the claim is initiated, the time limits provided for in this section shall not apply.