Massachusetts Insurance Commissioner Nonnie S. Burnes has issued a bulletin calling on insurance companies to send written notification to consumers when a settlement payment in any third-party liability claim is made to the consumer’s attorney or other representative.
According to Burnes, a former judge, the new guidelines will help ensure claimants receive their full settlements and prevent cases similar to the one involving former Cape Cod attorney Anthony Bott who cashed more than $390,000 in insurance checks without his clients’ knowledge.
“It is critically important that consumers be made aware of the fact that a settlement check has been put in the mail and that their claim has been resolved,” said Burnes. “These new guidelines will go a long way toward giving consumers the greater protections they deserve and will help increase their overall confidence in the integrity of the claims process.”
Specifically, the bulletin directs insurers to provide written notice to consumers when a payment of $5,000 or more is made to the claimant’s attorney or other representative.
Karen D. O’Toole, counsel to the Clients’ Security Board, said 11 other states have similar laws.
The Clients’ Security Board paid more than $390,000 to 8 former clients of Bott in 2006 and 2007. Bott forged his clients’ signatures and cashed checks for settlements in personal injury cases. He used the stolen funds for his own business or personal benefit. In addition to losing his license to practice law, Bott was convicted of larceny and forgery and sentenced to the house of correction in 2006.
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