PURPOSE                                   DEFINITIONS                                AGENT
CLAIM FILE                               CLAIMANT                                    CONTRACT           DAYS                                          DEPARTMENT                              DOCUMENTATION
FIRST PARTY                            INSURER                                        INVESTIGATION
LIKE KIND QUALITY                NOTIFICATION OF CLAIM           PERSON
PRACTICE                                  REPLACEMENT CRASH PART     SUPERINTENDENT
THIRD PARTY CLAIMANT        WRITTEN COMMUNICATION       PROOF OF LOSS
WRITTEN DOCUMENTATION  MISREPRESENTATION                 RESPONSE
GENERAL STANDARD              STANDARD FOR PROMPT            AGREEMENT
SEVERABILITY                         IMPOSITION OF FINE
 

THIS RULE IS ISSUED PURSUANT TO THE AUTHORITY VESTED IN THE
SUPERINTENDENT UNDER SECTIONS 3901.19 3901.26 OF THE REVISED CODE.
 

 (B) PURPOSE

THE PURPOSE OF THIS RULE IS TO SET FORTH UNIFORM MINIMUM - STANDARDS FOR THE INVESTIGATION AND DISPOSITION OF PROPERTY AND CASUALTY CLAIMS ARISING UNDER INSURANCE CONTRACTS OR CERTIFICATES ISSUED TO RESIDENTS OF OHIO.  IT IS NOT INTENDED TO COVER CLAIMS INVOLVING WORKERS' COMPENSATION, OR FIDELITY, SURETYSHIP, AND BOILER AND MACHINERY INSURANCE.  THE PROVISIONS OF THIS RULE ARE INTENDED TO DEFINE PROCEDURES AND PRACTICES WHICH CONSTITUTE UNFAIR CLAIMS PRACTICES.  NOTHING IN THIS RULE SHALL BE CONSTRUED TO CREATE OR IMPLY A PRIVATE CAUSE OF ACTION FOR VIOLATION OF THIS RULE.

 (C) DEFINITIONS AS USED IN THIS RULE:

(1) "AGENT" MEANS ANY INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP OR OTHER LEGAL  ENTITY AUTHORIZED TO REPRESENT AN INSURER WITH RESPECT TO A CLAIM;

(2) "CLAIM FILE" MEANS ANY RETRIEVABLE ELECTRONIC FILE, PAPER FILE, COMBINATION OF BOTH,  OR ANY OTHER MEDIA;

(3) "CLAIMANT" MEANS A FIRST PARTY CLAIMANT, A THIRD PARTY CLAIMANT.

(4) CONTRACT " MEANS ANY INSURANCE POLICY 'OR DOCUMENT
 CONTAINING  THE -TERMS OF THE AGREEMENT  WHEREIN ONE
 PARTY, THE INSURER,  ASSUMES CERTAIN OBLIGATIONS
               INCLUDING FINANCIAL OBLIGATIONS THAT -ARISE AS A RESULT
               OF A LOSS SUSTAINED BY ANOTHER PARTY, THE INSURED, OR
               TO ANY OTHER PARTY THAT HAS RIGHTS UNDER THE
               AGREEMENT.

(5) "DAYS" MEANS CALENDAR DAYS.  HOWEVER, WHEN THE LAST DAY OF A TIME LIMIT.,  STATED IN THIS RULE FALLS ON A SATURDAY, SUNDAY OR HOLIDAY, THE  LIMIT IS  EXTENDED TO THE NEXT IMMEDIATE FOLLOWING DAY THAT IS NOT A SATURDAY,  SUNDAY,  OR HOLIDAY.
 

(6) "DEPARTMENT" MEANS THE OHIO DEPARTMENT OF; INSURANCE

(7) "DOCUMENTATION" INCLUDES, BUT IS NOT LIMITED TO, ALL COMMUNICATIONS, TRANSACTIONS,   NOTES, WORK PAPERS, CLAIM FORMS, BILLS AND EXPLANATION OF BENEFITS FORMS    PERTAINING TO THE CLAIM;

(8) "FIRST PARTY CLAIMANT" MEANS ANY INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP   OR OTHER LEGAL ENTITY ASSERTING A RIGHT TO PAYMENT UNDER AN INSURANCE POLICY OR   INSURANCE CONTRACT ARISING OUT OF THE OCCURRENCE OF THE CONTINGENCY OR LOSS   COVERED BY THE POLICY OR CONTRACT;

(9) "INSURER" SHALL BE DEFINED AS SET FORTH IN DIVISION
 (D)   OF SECTION 3901.32 OF THE REVISED CODE;

 (10) "INVESTIGATION" MEANS ALL ACTIVITIES OF AN INSURER DIRECTLY OR INDIRECTLY RELATED TO THE DETERMINATION OF LIABILITY UNDER AN INSURANCE CONTRACT WHICH IS IN EFFECT OR ALLEGED TO BE IN EFFECT;

 (11) "LIKE KIND AND QUALITY PART " MEANS A SALVAGE MOTOR VEHICLE PART EQUAL TO OR BETTER THAN THE REPLACED PART THAT IS ACQUIRED FROM A LICENSED SALVAGE MOTOR DEALER.

 (12) "NOTIFICATION OF CLAIM" MEANS ANY NOTIFICATION, UNDER THE TERMS OF AN INSURANCE CONTRACT, TO AN INSURER OR ITS AGENT, BY A CLAIMANT, WHICH REASONABLY APPRISES THE INSURER OF THE FACTS PERTINENT TO A CLAIM;

 (13) "PERSON" SHALL BE DEFINED AS SET FORTH IN SECTION
 3901.19 OF THE REVISED CODE;

 (14) "PRACTICE" MEANS A TYPE OF ACTIVITY OR CONDUCT ENGAGED IN BY AN INSURER WITH SUCH FREQUENCY AS TO CONSTITUTE A CUSTOMARY PROCEDURE OR POLICY ROUTINELY FOLLOWED IN THE SETTLEMENT OF INSURANCE CLAIMS.  A SINGLE ACT IS NOT A BUSINESS PRACTICE.  HOWEVER, AN ACT THAT IS MALICIOUS, DELIBERATE, CONSCIOUS AND KNOWING MAY BE THE BASIS FOR CORRECTIVE ACTION ORDERED ONLY BY THE SUPERINTENDENT WITHOUT A SHOWING THAT THE CONDUCT IS A PRACTICE.

 (15) "REPLACEMENT CRASH PART" MEANS SHEET METAL OR ANY PLASTIC PARTS WHICH GENERALLY CONSTITUTE THE EXTERIOR OF A MOTOR VEHICLE, INCLUDING INNER AND OUTER PANELS;

 (16) "SUPERINTENDENT" MEANS THE SUPERINTENDENT OF INSURANCE;

 (17) "THIRD PARTY CLAIMANT" MEANS ANY INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP OR OTHER LEGAL ENTITY ASSERTING A CLAIM AGAINST ANY OTHER
 INDIVIDUAL, CORPORATION, ASSOCIATION, PARTNERSHIP OR LEGAL ENTITY;

(18) "WRITTEN COMMUNICATIONS" INCLUDES ANY CORRESPONDENCE, REGARDLESS OF SOURCE  OR TYPE, THAT IS MATERIALLY RELATED TO A CLAIM;'

(19) "PROOF OF LOSS" MEANS A DOCUMENT FROM THE CLAIMANT THAT PROVIDES SUFFICIENT  INFORMATION FROM WHICH THE INSURER CAN DETERMINE THE EXISTENCE AND THE  AMOUNT OF THE CLAIM.
 

(D) FILE AND RECORD DOCUMENTATION

 AN INSURER'S CLAIM FILES ARE SUBJECT TO EXAMINATION BY THE SUPERINTENDENT OF  INSURANCE OR BY THE SUPERINTENDENT'S DULY APPOINTED DESIGNEES.  TO AID IN SUCH  EXAMINATION:

 (1)  AN INSURER SHALL MAINTAIN CLAIM DATA THAT IS ACCESSIBLE AND RETRIEVABLE FOR  EXAMINATION.  SUCH DATA SHALL INCLUDE NUMBER, LINE OF COVERAGE, DATE OF LOSS  AND DATE OF PAYMENT OR DATE OF DENIAL OR DATE WHEN CLAIM IS CLOSED WITHOUT  PAYMENT.  THE DATA FOR CLOSED CLAIMS SHALL BE KEPT FOR NO LESS THAN THREE YEARS  OR UNTIL THE COMPLETION OF THE NEXT FINANCIAL EXAMINATION CONDUCTED BY THE  STATE OF DOMICILE, WHICHEVER IS GREATER.  DATA FOR CLAIMS WHERE THE CLAIMS  PAYMENT IS LESS THAN $1000, OR FOR TOWING, LABOR, GLASS OR RENTAL REIMBURSEMENT  MAY BE KEPT IN SUMMARY FORM.

 (2)  AN INSURER MUST BE ABLE TO RECONSTRUCT ITS ACTIVITIES IN REGARD TO ANY  CLAIM, BY DOCUMENTATION APPROPRIATE FOR THE TYPE AND SIZE OF THE CLAIM.  IF THE  CLAIM IS CLOSED, THE TIME PERIOD FOR RETENTION IS SET FORTH IN SUBSECTION (1)  ABOVE.

 (3)  IF AN INSURER DOES NOT MAINTAIN HARD COPY FILES, CLAIM FILES SHALL BE   ACCESSIBLE AND BE CAPABLE OF DUPLICATION TO HARD COPY.
 

(E) MISREPRESENTATION OF POLICY PROVISIONS

 (1) AN INSURER SHALL FULLY DISCLOSE TO FIRST PARTY CLAIMANTS ALL PERTINENT  BENEFITS, COVERAGES OR OTHER PROVISIONS OF AN INSURANCE CONTRACT UNDER  WHICH A CLAIM IS PRESENTED.

 (2)  NO AGENT SHALL WILLFULLY CONCEAL FROM FIRST PARTY CLAIMANTS-   BENEFITS, COVERAGES OR OTHER PROVISIONS OF ANY INSURANCE CONTRACT WHEN  SUCH BENEFITS, COVERAGES OR OTHER PROVISIONS ARE PERTINENT TO A CLAIM.
 
 
 

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3901-1-54
 

 (3) NO INSURER SHALL DENY A CLAIM BASED ON THE FIRST PARTY CLAIMANT'S FAILURE TO MAKE   AVAILABLE FOR INSPECTION '. THE PROPERTY WHICH IS THE SUBJECT OF THE CLAIM UNLESS   THERE IS DOCUMENTATION OF BREACH OF THE POLICY PROVISIONS IN THE CLAIM FILE.

 (4) NO INSURER SHALL DENY A CLAIM BASED UPON THE FAILURE OF A FIRST PARTY CLAIMANT TO   GIVE WRITTEN NOTICE OF LOSS WITHIN A SPECIFIED TIME LIMIT UNLESS THE NOTICE IS   REQUIRED BY A POLICY CONDITION, OR A FIRST PARTY CLAIMANT'S FAILURE TO GIVE WRITTEN   NOTICE AFTER BEING REQUESTED TO DO SO BY THE INSURER IS SO UNREASONABLE AS TO   CONSTITUTE A BREACH OF THE CLAIMANT'S DUTY TO COOPERATE WITH THE INSURER.

 (5) NO INSURER SHALL INDICATE TO A FIRST PARTY CLAIMANT ON A PAYMENT DRAFT, CHECK OR IN   ANY ACCOMPANYING LETTER THAT THE PAYMENT IS FINAL OR A RELEASE OF ANY CLAIM   UNLESS THE POLICY LIMIT HAS BEEN PAID OR THE FIRST PARTY CLAIMANT AND THE INSURER   HAVE AGREED TO A COMPROMISE SETTLEMENT REGARDING COVERAGE AND THE AMOUNT   PAYABLE UNDER THE INSURANCE CONTRACT.

 (6) NO INSURER SHALL ISSUE CHECKS OR DRAFTS IN PARTIAL SETTLEMENT OF A LOSS OR CLAIM   UNDER A SPECIFIC COVERAGE THAT CONTAINS LANGUAGE PURPORTING TO RELEASE THE INSURER   OR ITS INSURED FROM TOTAL LIABILITY.
 

(F) RESPONSE TO ACKNOWLEDGE RECEIPT OF PERTINENT COMMUNICATIONS

 (1) NOTIFICATION OF A CLAIM GIVEN TO AN AGENT OF AN INSURER SHALL BE NOTIFICATION TO THE   INSURER.

 (2) AN INSURER SHALL ACKNOWLEDGE THE RECEIPT OF A CLAIM WITHIN TEN DAYS OF RECEIVING   SUCH NOTIFICATION.  AN INSURER MAY SATISFY THIS REQUIREMENT BY MAKING PAYMENT   WITHIN THIS TEN DAY PERIOD.  AN INSURER MAY ALSO SATISFY THIS REQUIREMENT BY   PROVIDING NECESSARY CLAIM FORMS AND COMPLETE INSTRUCTIONS TO THE CLAIMANT.

 (3) AN INSURER SHALL RESPOND WITHIN TEN DAYS TO ANY COMMUNICATION FROM A   CLAIMANT, WHEN THAT COMMUNICATION SUGGESTS A RESPONSE IS APPROPRIATE.  IN   THE EVENT THAT A COMPLAINT HAS BEEN FILED BY A CLAIMANT IN ANY COURT, AN   INSURER IS NOT OBLIGATED TO RESPOND WITHIN THIS TIME PERIOD AND ANY   COMMUNICATION BETWEEN THE CLAIMANT AND THE INSURER WILL BE SUBJECT TO   THE APPROPRIATE RULE OF PROCEDURE FOR THE COURT IN WHICH THE LAWSUIT WAS   FILED.-

 (4) AN INSURER SHALL, WITHIN TWENTY-ONE DAYS OF RECEIPT OF AN INQUIRY FROM   THE DEPARTMENT REGARDING A CLAIM,
 
 

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3901-1-54
 

 FURNISH THE DEPARTMENT WITH A REASONABLE RESPONSE TO
 THE INQUIRY, IN DUPLICATE.
 

(G) GENERAL STANDARDS FOR SETTLEMENT OF CLAIMS

 (1) AN INSURER SHALL WITHIN TWENTY-ONE DAYS OF THE RECEIPT OF PROPERLY   EXECUTED PROOF(S) OF LOSS DECIDE WHETHER TO ACCEPT OR DENY SUCH   CLAIM(S).  IF MORE TIME IS NEEDED TO INVESTIGATE THE CLAIM THAN THE   TWENTY-ONE DAYS ALLOW, THE INSURER SHALL NOTIFY THE CLAIMANT WITHIN   THE TWENTY-ONE DAY PERIOD, AND PROVIDE AN EXPLANATION OF THE NEED FOR   MORE TIME.  IF AN EXTENSION OF TIME IS NEEDED, THE INSURER HAS A    CONTINUING OBLIGATION TO NOTIFY THE CLAIMANT IN WRITING, AT LEAST EVERY   FORTY-FIVE DAYS OF THE STATUS OF THE INVESTIGATION AND THE CONTINUED   TIME FOR THE INVESTIGATION.

  IF THE FORM AND EXECUTION OF A PROOF OF LOSS IS MATERIAL TO AN INSURER,   THE INSURER SHALL IMMEDIATELY PROVIDE THE CLAIMANT WITH THE SPECIFIC   DOCUMENTS AND SPECIFIC INSTRUCTIONS SO THE CLAIMANT CAN SUBMIT THE   CLAIM.  AN INSURER SHALL NOT OTHERWISE DENY A CLAIM SOLELY ON THE BASIS   THE PROOF OF LOSS IS NOT ON THE INSURER'S USUAL FORM.

  IF AN INSURER REASONABLY BELIEVES, BASED UPON INFORMATION OBTAINED   AND DOCUMENTED WITHIN THE CLAIM FILE, THAT A CLAIMANT HAS      FRAUDULENTLY CAUSED OR CONTRIBUTED TO THE LOSS AS REPRESENTED BY A   PROPERLY EXECUTED AND DOCUMENTED PROOF OF LOSS, SUCH INFORMATION   SHALL BE PRESENTED TO THE FRAUD DIVISION OF THE DEPARTMENT WITHIN   SIXTY DAYS OF RECEIPT OF THE PROOF OF LOSS.  ANY PERSON MAKING SUCH   REPORT SHALL BE AFFORDED SUCH IMMUNITY AND THE INFORMATION SUBMITTED   WILL BE CONFIDENTIAL AS PROVIDED BY SECTIONS 3901.44 AND 3999.31 OF THE   REVISED CODE.

 (2) NO INSURER SHALL DENY A CLAIM ON THE GROUNDS OF A SPECIFIC POLICY   PROVISION, CONDITION OR EXCLUSION UNLESS REFERENCE TO SUCH PROVISION,   CONDITION, OR EXCLUSION IS INCLUDED IN THE DENIAL.  THE CLAIM FILE OF THE   INSURER SHALL CONTAIN DOCUMENTATION OF THE DENIAL IN ACCORDANCE WITH   SECTION (D) OF THIS RULE.

 (3) EXCEPT AS OTHERWISE PROVIDED BY POLICY PROVISIONS, AN INSURER SHALL   SETTLE FIRST PARTY CLAIMS UPON REQUEST BY THE INSURED WITH NO    CONSIDERATION GIVEN TO WHETHER THE RESPONSIBILITY FOR PAYMENT SHOULD   BE ASSUMED BY OTHERS.

 (4) NO INSURER SHALL REQUIRE AN INSURED TO SUBMIT TO A POLYGRAPH EXAMINATION   UNLESS AUTHORIZED UNDER THE APPLICABLE INSURANCE CONTRACT.
 

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  (5) NOTICE SHALL BE GIVEN TO CLAIMANTS AT LEAST SIXTY DAYS, BEFORE THE    EXPIRATION OF ANY STATUTE OF LIMITATION OR CONTRACTUAL LIMIT, WHERE THE    INSURER HAS NOT BEEN ADVISED THAT THE CLAIMANT IS REPRESENTED BY LEGAL COUNSEL.

  (6) AN INSURER SHALL TENDER PAYMENT TO A FIRST PARTY CLAIMANT NO LATER THAN    TEN DAYS AFTER ACCEPTANCE OF A CLAIM IF THE AMOUNT OF THE CLAIM IS    DETERMINED AND IS NOT IN DISPUTE, UNLESS THE SETTLEMENT INVOLVES A    STRUCTURED SETTLEMENT,  ACTION BY A PROBATE COURT, OR OTHER EXTRAORDINARY CIRCUMSTANCES AS DOCUMENTED IN THE CLAIM FILE.

  (7) IF A CLAIM INVOLVES A NON-NEGLIGENT PARTY'S PROPERTY LOSS AND MULTIPLE    LIABILITY INSURERS, THE MULTIPLE LIABILITY INSURERS SHALL ADJUST THE    PROPERTY LOSS WITHIN A REASONABLE TIME AND PAY THE NON-NEGLIGENT PARTY'S    LOSS IN EQUAL SHARES.  AFTER PAYMENT, THE MULTIPLE LIABILITY INSURERS MAY    THEN PURSUE AVAILABLE REMEDIES TO RESOLVE THE QUESTION OF RESPONSIBILITY    FOR THE NON-NEGLIGENT PARTY'S LOSS.

  (8) IF A CLAIM INVOLVES MULTIPLE COVERAGES UNDER ANY POLICY, NO INSURER SHALL    WITHHOLD PAYMENT UNDER ANY SUCH COVERAGE WHEN THE PAYMENT IS KNOWN,    THE PAYMENT IS NOT IN DISPUTE, AND THE PAYMENT WOULD EXTINGUISH THE    INSURER'S LIABILITY UNDER THAT COVERAGE.  NO INSURER SHALL WITHHOLD SUCH    PAYMENT FOR THE PURPOSE OF FORCING SETTLEMENT ON ALL OTHER COVERAGE    TO EFFECT A SINGLE PAYMENT.

  (9) AN INSURER MUST DOCUMENT THE APPLICATION OF COMPARATIVE NEGLIGENCE TO    ANY CLAIM SETTLEMENT.  SUCH INFORMATION SHALL BE FULLY DISCLOSED TO THE    CLAIMANT UPON THE CLAIMANT'S WRITTEN REQUEST.  AN INSURER SHALL NOT USE    PATTERN SETTLEMENTS AS SET FORTH IN DIVISION

  (P) OF SECTION 3901.21 OF THE REVISED CODE.

  (10) AN INSURER SHALL NOT USE SETTLEMENT PRACTICES THAT RESULT IN COMPELLING    FIRST PARTY CLAIMANTS TO LITIGATE BY OFFERING SUBSTANTIALLY LESS THAN THE    AMOUNTS CLAIMED COMPARED TO THE AMOUNT ULTIMATELY RECOVERED IN    ACTIONS BROUGHT BY SUCH CLAIMANTS.
 

 (H) STANDARDS FOR PROMPT, FAIR AND EQUITABLE SETTLEMENTS OF AUTOMOBILE INSURANCE CLAIMS

   (1) WHEN PARTIAL LOSSES WILL BE SETTLED ON THE BASIS OF A WRITTEN     ESTIMATE PREPARED BY OR FOR AN INSURER, THE INSURER SHALL SUPPLY THE     CLAIMANT A COPY OF THE ESTIMATE UPON WHICH THE PROPOSED SETTLEMENT     IS BASED. IF THE CLAIMANT SUBSEQUENTLY CLAIMS THAT NECESSARY REPAIRS     WILL EXCEED THE WRITTEN ESTIMATE, THE INSURER SHALL PAY THE DIFFERENCE BETWEEN THE WRITTEN ESTIMATE AND A HIGHER ESTIMATE   OBTAINED BY THE CLAIMANT OR PROMPTLY PROVIDE THE CLAIMANT WITH THE NAME OF AT   LEAST ONE REPAIR SHOP THAT WILL MAKE THE REPAIRS FOR THE AMOUNT OF THE WRITTEN   ESTIMATE.  IF THE INSURER PROVIDES THE NAME OF ONLY ONE REPAIR SHOP, IT SHALL   ENSURE THAT THE REPAIRS ARE PERFORMED IN A WORKMANLIKE MANNER.  THE INSURER   SHALL MAINTAIN DOCUMENTATION OF ALL COMMUNICATIONS WITH THE CLAIMANT   PURSUANT TO THIS SUBDIVISION.

 (2)  IF AN INSURER REDUCES A CLAIM AMOUNT BECAUSE OF BETTERMENT, DEPRECIATION OR    COMPARATIVE NEGLIGENCE, IT SHALL MAINTAIN ALL INFORMATION PERTAINING TO THE    REDUCTION IN THE CLAIM FILE.  SUCH DEDUCTIONS SHALL BE ITEMIZED AND SPECIFIED ON    THE WRITTEN ESTIMATE AS TO DOLLAR AMOUNT AND SHALL BE APPROPRIATE FOR THE    AMOUNT OF DEDUCTIONS.

 (3)  AN INSURER MAY REDUCE A CLAIM AMOUNT BECAUSE OF BETTERMENT DEDUCTIONS ONLY   IF THE DEDUCTIONS REFLECT A MEASURABLE DECREASE IN MARKET VALUE DUE TO THE    POORER CONDITION OF, OR PRIOR DAMAGE TO, THE VEHICLE; OR REFLECTS THE GENERAL    OVERALL CONDITION OF THE VEHICLE, CONSIDERING ITS AGE; OR THE WEAR AND TEAR OR    RUST, AND/OR; MISSING PARIS, LIMITED TO NO MORE OF A DEDUCTION THAN THE    REPLACEMENT COSTS OF PART OR PARTS.

 (4)  WHEN PARTIAL LOSSES WILL BE SETTLED ON THE BASIS OF A WRITTEN ESTIMATE PREPARED    BY OR FOR AN INSURER, THE ESTIMATE MUST CLEARLY INDICATE THE USE OF THE PARTS IN    COMPLIANCE WITH SECTION 1345.81 OF THE OHIO REVISED CODE.  WHEN "LIKE KIND AND    QUALITY" PARTS ARE EXPECTED TO BE USED IN THE REPAIR, THE ESTIMATE SHALL CLEARLY    INDICATE THE LOCATION OF THE LICENSED SALVAGE DEALER WHERE THE "LIKE KIND AND    QUALITY" PARTS ARE TO BE OBTAINED.
 

 (5)  AN INSURER WHICH ELECTS TO REPAIR AND DESIGNATES A SPECIFIC REPAIR SHOP FOR    AUTOMOBILE REPAIRS SHALL CAUSE THE DAMAGED AUTOMOBILE TO BE RESTORED TO ITS    CONDITION PRIOR TO THE LOSS.  THE INSURER SHALL ASSESS NO ADDITIONAL COST AGAINST    THE CLAIMANT OTHER THAN AS STATED IN THE POLICY, AND THE REPAIRS SHOULD BE    EFFECTED WITHIN A REASONABLE PERIOD OF TIME.

 (6)  IN SETTLEMENT OF CLAIMANTS' AUTOMOBILE TOTAL LOSSES ON THE BASIS OF ACTUAL CASH    VALUE OR REPLACEMENT OF THE AUTOMOBILE WITH ANOTHER VEHICLE OF LIKE KIND AND    QUALITY, AN INSURER WHICH ELECTS TO OFFER A REPLACEMENT AUTOMOBILE SHALL:
 
 
 

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3901 -I- 54
 

(i) GIVES PRIMARY CONSIDERATION TO THE VALUES OF VEHICLES IN THE LOCAL   MARKET AREA AND M-Y CONSIDER DATA OUTSIDE THE AREA;

  (ii) HAS A DATABASE WHICH PRODUCES VALUES FOR AT LEAST EIGHTY-FIVE PER    CENT OF ALL MAKES AND MODELS FOR THE LAST FIFTEEN MODEL YEARS    TAKING INTO ACCOUNT THE VALUES OF ALL MAJOR OPTIONS FOR SUCH    VEHICLES; AND

  (iii) PRODUCES FAIR MARKET VALUES BASED ON CURRENT DATA AVAILABLE    FROM THE AREA SURROUNDING THE LOCATION WHERE THE CLAIMANT'S    VEHICLE WAS PRINCIPALLY GARAGED EXCEPT THAT PARAMETERS,    INCLUDING BUT NOT LIMITED TO TIME AND AREA MAY BE EXPANDED TO    ASSURE STATISTICAL VALIDITY.

 (e) IF WITHIN THIRTY DAYS OF RECEIPT BY THE CLAIMANT OF A CASH SETTLEMENT FOR THE   TOTAL LOSS OF AN AUTOMOBILE, THE CLAIMANT PURCHASES A REPLACEMENT   AUTOMOBILE, THE INSURER SHALL REIMBURSE THE CLAIMANT FOR THE APPLICABLE   SALES TAXES INCURRED ON ACCOUNT OF THE CLAIMANT'S PURCHASE OF THE   AUTOMOBILE, BUT NOT TO EXCEED THE AMOUNT THAT WOULD HAVE BEEN PAYABLE   BY THE CLAIMANT FOR SALES TAXES ON THE PURCHASE OF All AUTOMOBILE WITH   MARKET VALUE EQUAL TO THE AMOUNT OF THE CASH SETTLEMENT.  IF THE CLAIMANT   PURCHASES AN AUTOMOBILE WITH A MARKET VALUE LESS THAN THE AMOUNT OF THE   CASH SETTLEMENT, THE INSURER SHALL REIMBURSE ONLY THE ACTUAL AMOUNT OF   THE APPLICABLE SALES TAXES ON THE PURCHASED AUTOMOBILE.  IF THE CLAIMANT   CANNOT SUBSTANTIATE SUCH PURCHASE AND THE PAYMENT OF SUCH SALES TAXES BY   SUBMISSION TO THE INSURER OF APPROPRIATE DOCUMENTATION WITHIN THIRTY-THREE   DAYS AFTER RECEIPT OF THE CASH SETTLEMENT, THE INSURER SHALL NOT BE   REQUIRED TO REIMBURSE THE CLAIMANT FOR SUCH SALES TAXES.  IN LIEU OF   REIMBURSEMENT, THE INSURER MAY PAY DIRECTLY THE APPLICABLE SALES TAXES   TO THE CLAIMANT AT THE TIME OF THE CASH SETTLEMENT.

  AN INSURER THAT SETTLES A TOTAL LOSS ON A CASH SETTLEMENT BASIS MUST   MAINTAIN IN THE CLAIM FILE THE DOCUMENTATION USED TO DETERMINE THE LOSS.    SUCH INFORMATION SHALL BE PROVIDED TO THE FIRST PARTY CLAIMANT UPON   REQUEST.  AN INSURER SHALL NOTIFY THE FIRST PARTY CLAIMANT OF ANY RIGHTS TO   RENEGOTIATE THE SETTLEMENT IF A COMPARABLE VEHICLE IS NOT AVAILABLE FOR   PURCHASE WITHIN THIRTY-FIVE DAYS OF RECEIPT OF THE SETTLEMENT.
 
 
 

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 (a) PROVIDE AN AUTOMOBILE BY THE SAME MANUFACTURER OF THE SAME OR NEWER   YEAR, OF SIMILAR BODY STYLE., WITH SIMILAR OPTIONS AND MILEAGE AS THE   CLAIMANT'S VEHICLE AND IN AS GOOD OR BETTER OVERALL CONDITION THAN THE   FIRST PARTY AUTOMOBILE PRIOR TO LOSS;

 (b) ENSURE THAT THE AUTOMOBILE IS AVAILABLE FOR INSPECTION WITHIN A REASONABLE   DISTANCE OF THE CLAIMANT'S RESIDENCE;

 (c) PAY ALL APPLICABLE TAXES, LICENSE FEES, AND OTHER FEES INCIDENT TO TRANSFER   OF EVIDENCE OF OWNERSHIP OF THE AUTOMOBILE AT NO COST TO CLAIMANT OTHER   THAN ANY DEDUCTIBLE PROVIDED IN THE POLICY; AND

 (d) DOCUMENT THE OFFER OF THE REPLACEMENT AUTOMOBILE AND ANY REJECTION OF   THE OFFER IN THE CLAIM FILE.

 (7) IN SETTLEMENT OF CLAIMANTS' AUTOMOBILE TOTAL LOSSES ON THE BASIS OF ACTUAL CASH   VALUE OR REPLACEMENT OF THE AUTOMOBILE WITH ANOTHER OF LIKE KIND AND QUALITY, AN   INSURER WHICH ELECTS TO OFFER A CASH SETTLEMENT TO CLAIMANT, SHALL BASE THE OFFER   UPON THE ACTUAL COST TO PURCHASE A COMPARABLE AUTOMOBILE LESS ANY APPLICABLE   DEDUCTIBLE AMOUNT CONTAINED IN THE POLICY, AND/OR DEDUCTION FOR BETTERMENT AS   CONTAINED IN PARAGRAPH (H)(2) OF THIS RULE.  THE SETTLEMENT VALUE MAY BE DERIVED   FROM:

 (a) THE AVERAGE COST OF TWO OR MORE COMPARABLE AUTOMOBILES IN THE LOCAL   MARKET AREA IF COMPARABLE AUTOMOBILES ARE OR WERE AVAILABLE TO CONSUMERS   WITHIN THE LAST THIRTY DAYS; OR

 (b) THE AVERAGE COST OF TWO OR MORE COMPARABLE AUTOMOBILES IN AREAS PROXIMATE   TO THE LOCAL MARKET AREA, INCLUDING THE CLOSEST IN-STATE OR OUT-OF-STATE MAJOR   METROPOLITAN AREAS.  IF COMPARABLE AUTOMOBILES ARE OR WERE AVAILABLE TO   CONSUMERS WITHIN THE LAST THIRTY DAYS WHEN COMPARABLE AUTOMOBILES ARE NOT   AVAILABLE PURSUANT TO SUBSECTION (a) OF THIS RULE; OR

 (c) THE AVERAGE OF TWO OR MORE QUOTATIONS OBTAINED BY THE INSURER FROM TWO OR   MORE LICENSED DEALERS LOCATED WITHIN THE LOCAL MARKET AREA IF COMPARABLE   AUTOMOBILES ARE NOT AVAILABLE PURSUANT TO SUBSECTIONS (a) AND (b) OF THIS RULE;   OR

 (d) ANY SOURCE FOR DETERMINING STATISTICALLY VALID FAIR MARKET VALUES THAT:

WHEN AN INSURER ELECTS TO OFFER REPLACEMENT VEHICLE
   AVAILABLE TO THE CLAIMANT, THE INSURER SHALL PROVIDE
   ALL THE DETAILS WHERE SUCH VEHICLE IS AVAILABLE
   INCLUDING THE VEHICLE IDENTIFICATION NUMBER.

   (8) AN INSURER SHALL NOT REQUIRE A CLAIMANT TO TRAVEL AN      UNREASONABLE DISTANCE TO INSPECT A REPLACEMENT AUTOMOBILE, TO     OBTAIN A REPAIR ESTIMATE, NOR TO HAVE THE AUTOMOBILE REPAIRED AT     A SPECIFIC REPAIR SHOP.

   (9) AN INSURER SHALL PROVIDE NOTICE TO A CLAIMANT PRIOR TO TERMINATION     OF PAYMENT FOR AUTOMOBILE STORAGE CHARGES.  THE INSURER SHALL     DOCUMENT ALL ACTIONS TAKEN PURSUANT TO THIS SUBDIVISION IN     ACCORDANCE WITH PARAGRAPH (D) OF THIS RULE.

  (10) AN INSURER SHALL INCLUDE THE FIRST PARTY CLAIMANT'S DEDUCTIBLE, IF     ANY, IN SUBROGATION DEMANDS.  THE INSURER SHALL SHARE ANY     SUBROGATIONS RECOVERY RECEIVED ON A PROPORTIONATE BASIS WITH THE     FIRST PARTY CLAIMANT, UNLESS THE FIRST PARTY CLAIMANT'S DEDUCTIBLE     HAS BEEN PAID IN ADVANCE OR RECOVERED.  THE INSURER SHALL NOT     DEDUCT EXPENSES FROM THIS AMOUNT EXCEPT THAT AN OUTSIDE     ATTORNEY OR COLLECTION AGENCY RETAINED TO COLLECT SUCH RECOVERY     MAY BE PAID A PRO RATA SHARE OF HIS EXPENSES FOR COLLECTING THIS     AMOUNT.
 

  (I) STANDARDS FOR PROMPT, FAIR AND EQUITABLE SETTLEMENT OF CLAIMS UNDER FIRE     AND EXTENDED COVERAGE INSURANCE POLICIES

   (1) IF A FIRE AND EXTENDED COVERAGE INSURANCE POLICY PROVIDES FOR THE     ADJUSTMENT AND SETTLEMENT OF FIRST PARTY LOSSES BASED ON     REPLACEMENT COST, THE FOLLOWING SHALL APPLY:

   (a) WHEN A LOSS REQUIRES REPLACEMENT OF AN ITEM OR PART, ANY     CONSEQUENTIAL PHYSICAL DAMAGES INCURRED IN MAKING SUCH     REPAIR OR REPLACEMENT NOT OTHERWISE EXCLUDED BY THE     POLICY, SHALL BE INCLUDED IN THE LOSS.

   (b) WHEN AN INTERIOR OR EXTERIOR LOSS REQUIRES REPLACEMENT     OF AN ITEM AND THE REPLACED ITEM DOES NOT MATCH THE     QUALITY, COLOR OR SIZE OF THE ITEM SUFFERING THE LOSS, THE     INSURER SHALL REPLACE AS MUCH OF THE ITEM AS TO RESULT     IN A REASONABLY COMPARABLE APPEARANCE.

   (c) WHEN AN INSURER SETTLES A LOSS THAT RESULTS IN THE     INSURED PAYING A PORTION OF THE REPAIR OR REPLACEMENT     AS BETTERMENT, THE INSURER SHALL MAINTAIN       DOCUMENTATION OF THE BASIS FOR COMPUTING THE       BETTERMENT CHARGE, AND THE INSURED'S
 
 

AGREEMENT TO SUCH CHARGE PRIOR INCURRING THE
   EXPENSE OF THE REPAIR OR REPLACEMENT.

   (2) IF A FIRE AND EXTENDED COVERAGE INSURANCE POLICY PROVIDES FOR THE     ADJUSTMENT AND SETTLEMENT OF LOSSES ON AN ACTUAL CASH VALUE     BASIS THE FOLLOWING SHALL APPLY:

   (a) THE INSURER SHALL DETERMINE ACTUAL CASH VALUE BY     DETERMINING THE REPLACEMENT COST OF PROPERTY AT THE TIME     OF LOSS, INCLUDING SALES TAX, LESS ANY DEPRECIATION.  UPON THE     INSURED'S REQUEST, THE INSURER SHALL PROVIDE DOCUMENTATION     DETAILING ALL DEPRECIATION DEDUCTIONS.

   (b) IF THE INSURED'S INTEREST IS LIMITED BECAUSE HIS PROPERTY HAS     NOMINAL OR NO ECONOMIC VALUE, OR A VALUE DISPROPORTIONATE     TO REPLACEMENT COST LESS DEPRECIATION, THE INSURER IS NOT     REQUIRED TO COMPLY WITH SUBSECTION (2)(a) OF THIS RULE     REGARDING THE DETERMINATION OF ACTUAL CASH VALUE.      HOWEVER, THE INSURER SHALL PROVIDE UPON THE INSURED'S     REQUEST, A WRITTEN EXPLANATION OF THE BASIS FOR LIMITING THE     AMOUNT OF RECOVERY ALONG WITH THE AMOUNT PAYABLE UNDER     THE POLICY.
 

   (J) SEVERABILITY

   IF ANY PROVISION OF THIS RULE OR THE APPLICATION OF THIS RULE IS HELD    INVALID, SUCH INVALIDITY SHALL NOT AFFECT ANY OTHER PROVISION OR    APPLICATION OF THE RULE WHICH CAN BE GIVEN EFFECT WITHOUT THE INVALID    PROVISION OR APPLICATION AND TO THIS END, THE PROVISIONS OF THIS RULE ARE    DECLARED TO BE SEVERABLE.
 

   (K) APPLICABILITY OF RULE 3901-1-07 OF THE ADMINISTRATIVE CODE

   IF ANY PROVISIONS OF ANY SECTION OF THIS RULE CONFLICTS WITH ANY OF THE    PROVISIONS CONTAINED IN RULE 3901-1-07 OF THE OHIO REGULATIONS OF THE    DEPARTMENT OF INSURANCE, THE PROVISIONS OF THIS RULE WILL APPLY.
 

   (L) IMPOSITION OF FINE

   PURSUANT TO 3901.22 OF THE REVISED CODE AND A CONSENT AGREEMENT WITH    THE INSURER, THE SUPERINTENDENT MAY RECOVER THE COST OF AN      INVESTIGATION UNDER THIS RULE AND/OR A PENALTY FROM THE INSURER.
 

3901-1-54
 
 
 

 (M) EFFECTIVE DATE

THIS REGULATION SHALL BE EFFECTIVE ON          September 1, 1993

CERTIFICATION:                                       DATE
                     Superintendent office of Insurance
 

PROMULGATED UNDER: CHAPTER 119 OF THE OHIO REVISED CODE. STATUTORY AUTHORITY: OHIO REVISED CODE SECTION 3901.041. RULE AMPLIFIES: OHIO REVISED CODE SECTION 3901.07, 3901.071 AND RULE 3901-1-07.
 

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