Maryland Insurance Claim Denial Regulation

Maryland claim settlement laws and regulations set out the rules governing the administration, settlement, payment and denial of insurance claims. The Maryland Attorney General`s Office, Consumer Protection Division, is responsible for provision of mediation services to resolve complaints involving health insurance carriers and businesses. The division provides free arbitration services to aid in the resolution of disputes.

Unfair Claim Settlement Practices

• Based on the available information, an insurer or administrator of a nonprofit health insurance plan must not refuse to pay a claim on impulse or for an arbitrary reason; misrepresent facts relating to the insurance policy; try to settle a claim based on altered facts; fail to include a summary of policy coverage with each insurance claim payout; fail to settle a claim within a reasonable period of time; fail to provide a prompt explanation of reason for denial of a claim; fail to meet the requirements for preauthorization of a claim; or fail to act in good faith regarding the settlement of a claim.

General Business Practice

• An insurer or administrator of a nonprofit health insurance plan must comply with general business practice requirements, which include accurately representing relevant policy provision and facts related to coverage or claim issues; promptly acting upon and acknowledging any communications regarding policy claims; implementing and adopting standards for the prompt investigation of claims; conducting an investigation before denying or accepting a claim; and denying or affirming claims' coverage within a reasonable time after the completion of the provision of proof of loss.

Penalties

• The commissioner may impose the payment of restitution and/or a penalty on insurers or nonprofit health insurance plan administrators. The penalty ranges from $2,500 to $125,000 depending on the extent of the violation. The commissioner may require an insurer or administrator of a nonprofit health insurance plan to make restitution to a claimant who experiences actual economic consequences because of the violation. Restitution may include litigation, attorney`s fees and expenses related to the cost of case litigation, actual damages up to the maximum policy coverage, and interest on all damages and expenses.