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Companies Bound by State’s Fair Claims Laws: Physicians Benefit by Understanding Illinois Insurance Code

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Just as Illinois law in personal injury accident cases binds physicians and attorneys, insurance companies are also subject to stringent code governing their behavior.

The Illinois Insurance Code, Section 5/154.6, maps out acts by insurance companies considered to be improper claims practices. These include:

  • Not attempting in good faith to execute prompt, fair and reasonable settlement of claims in which liability has become reasonably clear;
  • Compelling policyholders to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them; and
  • Delaying the investigation or payment of claims by requiring an insured, a claimant, or the physicians of either to submit a preliminary claim report and then requiring subsequent submission of formal proof of loss forms, resulting in the duplication of verification.
These are just some of the acts specified in the code.

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