(USA Herald) – Bad faith conduct by insurance companies has long been a cause for concern among policyholders and regulators alike. With each state having its own laws and regulations in place to govern such conduct, it can be difficult to understand the extent to which an insurer must act in good faith. To help shed light on the issue, USA Herald reporter Samuel Lopez has conducted a review of various state laws and regulations governing insurer bad faith conduct.
In California, for example, insurers are required to act in good faith and to deal fairly with policyholders. This includes conducting a reasonable investigation of a claim and promptly paying benefits owed under the policy. If an insurer fails to do so, it may be held liable for bad faith conduct.
Similarly, in New York, insurance companies are required to act in good faith and to deal fairly with policyholders. The state has enacted a number of laws aimed at preventing bad faith conduct, including the Insurance Law and the Unfair Claims Settlement Practices Regulations. Under these laws, insurers are prohibited from engaging in a number of practices, such as failing to properly investigate a claim, failing to pay benefits owed under a policy, and engaging in unfair settlement practices.