Maryland Officials to Explain Good Faith P/C Damage Filings

September 6, 2007

The Maryland Insurance Administration (MIA) will conduct a
workshop to explain how it will implement newly enacted legislation that authorizes the award of enhanced damages against property and casualty insurance companies that fail to settle first party claims in good faith.

The workshop will focus on the process for the statutorily mandated filing of civil complaints that seek those enhanced damages with the MIA, as well as changes to the law that enhance the separate and distinct administrative sanctions the MIA may impose against an insurer. The workshop is open to all interested
parties and to the general public.

During the 2007 legislative session, the General Assembly enhanced the damages that may be awarded in a civil action against a property and casualty insurer that fails to act in good faith in the handling of a first party property and casualty insurance claim. Plaintiffs who prove that an insurer failed to act in good faith when improperly denying coverage or failing to pay the full value of such an insurance claim may recover actual damages up to the policy limits; litigation costs, including attorneys fees; and interest.

As part of this legislation, most plaintiffs seeking these enhanced damages are required to file their civil complaint with
the MIA first. The MIA is required to issue a decision on the merits of the plaintiff’s cause of action, including an assessment of damages.

The MIA’s decision may be rejected and the parties may seek a de novo hearing on the merits of the plaintiff’s cause of action before an administrative law judge and/or the circuit court, including a trial before a jury.

In addition, the new law makes a failure by a property and casualty insurer to settle a first party insurance claim in good faith a violation of the Unfair Claims Settlement Practices Act. That violation is subject to special administrative sanctions, including an award of attorney’s fees to the claimant by the MIA.

The workshop will explain the process that the MIA has adopted for receiving, reviewing and issuing decisions on civil complaints seeking enhanced damages against property and casualty insurers. The
workshop will also address the MIA’s separate role in evaluating violations of the Unfair Claims Settlement Practices Act and the enhanced administrative sanctions authorized.

What: Workshop on the Implementation of SB 389 – Civil Liability of Property and Casualty Insurers for Failure to Act in Good Faith (Chapter 150 Laws of Maryland (2007))
When: Tuesday, September 18, 2007 from 9 AM to Noon
Where: State Office Complex Auditorium
300 W. Preston Streeet
Baltimore MD 21201

Source: MIA

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