Arizona Laws 23-930. Unfair claim processing practices; bad faith; civil penalties
A. The commission has exclusive jurisdiction as prescribed in this section over complaints involving alleged unfair claim processing practices or bad faith by an employer, self-insured employer, insurance carrier or claims processing representative relating to any aspect of this chapter. The commission shall investigate allegations of unfair claim processing or bad faith either on receiving a complaint or on its own motion.
Terms Used In Arizona Laws 23-930
- Award: means the finding or decision of an administrative law judge or the commission as to the amount of compensation or benefit due an injured employee or the dependents of a deceased employee. See Arizona Laws 23-901
- Commission: means the industrial commission of Arizona. See Arizona Laws 23-901
- Compensation: means the compensation and benefits provided by this chapter. See Arizona Laws 23-901
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Insurance carrier: means every insurance carrier duly authorized by the director of the department of insurance and financial institutions to write workers' compensation or occupational disease compensation insurance in this state. See Arizona Laws 23-901
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Order: means and includes any rule, direction, requirement, standard, determination or decision other than an award or a directive by the commission or an administrative law judge relative to any entitlement to compensation benefits, or to the amount of compensation benefits, and any procedural ruling relative to the processing or adjudicating of a compensation matter. See Arizona Laws 23-901
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
B. If the commission finds that unfair claim processing or bad faith has occurred in the handling of a particular claim, it shall award the claimant, in addition to any benefits it finds are due and owing, a benefit penalty of twenty-five percent of the benefit amount ordered to be paid or $500, whichever is more.
C. If the commission finds that an employer, self-insured employer, insurance carrier or claim processing representative has a history or pattern of repeated unfair claim processing practices or bad faith, it may impose a civil penalty of up to $1,000 for each violation found. The civil penalty shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.
D. Any party aggrieved by an order of the commission under this section may request a hearing pursuant to section 23-947. The hearing and decision shall be conducted pursuant to section 23-941.
E. The commission shall adopt by rule a definition of unfair claim processing practices and bad faith. In adopting a rule under this subsection, the commission shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the commission’s own experience in processing workers’ compensation claims and the workers’ compensation and insurance laws of this state.
F. This section does not limit or interfere with the authority of the department of insurance and financial institutions as provided by law to regulate any insurance carriers, including the jurisdiction of the department of insurance and financial institutions over unfair claim settlement practices as provided in section 20-461.