The West Virginia Insurance Commissioner recently issued Informational Letter No. 189 which interprets and clarifies those portions of the W.Va. Code of State Rules requiring delay letters during the investigation of a claim. Per the Commissioner, delay letters are required during the investigation of any component of a claim: coverage, liability, and/or damages. However, after suit has been filed, the delay notices can cease.
Informational Letter No. 189 contains clarification regarding the 45-day delay notices required by regulation. W.Va. Code Section 114-14-6.7 requires an insurer to notify the claimant, in writing, if the insurer needs more than thirty (30) calendar days from the date of proof of loss to determine whether a claim will be accepted or denied. If so, the insurer is required to notify the claimant of the necessary delay within fifteen (15) working days after the thirty day period expires, and every forty-five (45) calendar days thereafter, until the investigation is complete. As a preliminary matter, the Commissioner confirmed that delay letters shall be provided to the claimant “any time any aspect of the claim (including, but not limited to, coverage, liability or damage decision components) remains undetermined and, as a result, under investigation.” The Insurance Commissioner further clarified that only one delay letter is required during each respective time frame, which shall discuss any and all components of the claim remaining under investigation. Consequently, if both liability and damages are still under investigation, only one delay letter (as opposed to two separate delay letters) need be sent to the claimant to identify that these components of the claim are still being actively investigated. Additionally, if one particular component of the claim is considered closed, but evidence is submitted that would cause the insurer to reopen its investigation, the duty to provide notice of necessary delay letter(s) would likewise be reinstituted until a final decision is reached on that portion of the claim that was re-opened.
Where the claim involves an infant, incompetent, or incapacitated person, and that person’s interests are legally represented, a single notice of necessary delay letter is sufficient until such time as the claim can be reactivated and actively investigated. In the event a claimant is unresponsive to the insurer’s requests for information, the insurer should document the periods of noncompliance by the claimant and ensure clear notice is provided that, in the absence of further evidence concerning the claim, a claim decision will be rendered. Otherwise, if the claim continues to be actively investigated, notice of the necessary delay letter(s) should continue to be provided by the insurer to the claimant.
The Commissioner clarified that the parties may reach an agreement regarding the need for delay notices; however, a carrier is required to document that agreement. Moreover, the Commissioner clarified that there is no general requirement by insurers to send delay letters after the initiation of litigation. Once suit is filed, the claimant is assumed to have knowledge of the status of his or her claim. Please note, however, that this does not relieve an insurer of other duties under the statute or regulations.