2.2 Unfair Claims Settlement Practices & How They Differ From Good-Faith Duties (RS 22:1964(14))
Key Takeaways
- R.S. 22:1964(14) lists seventeen unfair claims settlement practices, (a) through (q), that violate Louisiana law when committed with such frequency as to indicate a general business practice.
- Failing to provide claim forms within fifteen calendar days of a request, when the insurer maintains such forms, is an unfair claims settlement practice (R.S. 22:1964(14)(o)).
- On an insured’s written request, an insurer must make available non-privileged claim file materials and the original field adjuster’s repair estimate, identifying anyone who revised it (R.S. 22:1964(14)(p)–(q)).
- A residential or commercial property insurer must respond to an insured’s inquiries within fourteen days unless the commissioner extends that period for a declared disaster or emergency (R.S. 22:1896(A)).
- The commissioner enforces unfair trade practices through cease-and-desist orders, fines and license action under R.S. 22:1969 and 22:1970.
Last updated: September 2026
The Structure of the Unfair Trade Practices Part
| Section | Role |
|---|---|
| R.S. 22:1961 | Purpose: regulate trade practices in the business of insurance |
| R.S. 22:1962 | Definitions |
| R.S. 22:1963 | Prohibits unfair methods of competition and unfair or deceptive acts |
| R.S. 22:1964 | Defines the prohibited methods, acts and practices; paragraph (14) covers claims |
| R.S. 22:1967–1970 | Commissioner investigation, hearing notice, penalties, and cease-and-desist enforcement |
PSI's Series 204 outline lists "Claim settlement laws and regulations (22:1964(14))," "Unfair claims settlement practices," and "Prompt payment of claims" under Louisiana Insurance Regulation. Expect questions that describe claim-handling conduct and ask whether it fits one of the listed practices.
The "General Business Practice" Threshold
Paragraph (14) applies to "committing or performing with such frequency as to indicate a general business practice" any of the listed acts. The paragraph targets patterns an insurer's claim operation repeats, usually found in LDI market conduct examinations or complaint trends. One mishandled file may not violate paragraph (14), but the same conduct can still violate:
- the insurer's good-faith duties in R.S. 22:1892(I), where a single knowing act can create civil liability;
- the adjuster's standards of conduct in R.S. 22:1674.1, which are themselves deemed unfair trade practices; and
- the payment deadlines in R.S. 22:1892 and 22:1892.2.
The Seventeen Unfair Claims Settlement Practices (R.S. 22:1964(14))
| Item | Practice | What it looks like in a claim file |
|---|---|---|
| (a) | Misrepresenting pertinent facts or policy provisions relating to coverages at issue | Telling an insured the policy has no ordinance or law coverage when it does |
| (b) | Failing to acknowledge and act reasonably promptly on claim communications | Unanswered emails and voicemails for weeks |
| (c) | Failing to adopt and implement reasonable standards for prompt investigation | No written claim-handling guidelines or diary system |
| (d) | Refusing to pay claims without a reasonable investigation based on all available information | Denying a roof claim without inspecting it |
| (e) | Failing to affirm or deny coverage within a reasonable time after proof of loss statements are completed | A coverage decision left open indefinitely |
| (f) | Not attempting in good faith to effect prompt, fair and equitable settlements when liability is reasonably clear | Stalling a clear rear-end collision claim |
| (g) | Compelling insureds to sue by offering substantially less than the amounts ultimately recovered | Routine lowball offers that later lose at trial |
| (h) | Attempting to settle for less than a reasonable person would expect based on advertising accompanying or part of the application | Settling below what the insurer's own marketing promised |
| (i) | Attempting to settle on the basis of an application altered without the insured's notice, knowledge or consent | Relying on a changed square-footage answer the insured never saw |
| (j) | Making claim payments without a statement of the coverage under which payment is made | A check with no explanation of the coverage part paying it |
| (k) | Telling insureds or claimants of a policy of appealing arbitration awards to force smaller settlements | "We always appeal, so take less now" |
| (l) | Delaying investigation or payment by requiring a preliminary claim report and then formal proof of loss forms with substantially the same information | Demanding duplicate paperwork |
| (m) | Failing to promptly settle clear claims under one coverage to influence settlements under other coverages | Holding a clear dwelling payment hostage to a contents dispute |
| (n) | Failing to promptly provide a reasonable explanation, based on the policy, facts or law, for a denial or compromise offer | A denial letter with no policy citation |
| (o) | Failing to provide claim forms within 15 calendar days of a request, with reasonable explanations, if the insurer maintains such forms | Sending a proof of loss form a month after the request |
| (p) | Failing to make available, on the insured's written request, any portion of the claim file (estimates, bids, plans, measurements, drawings, engineer and contractor reports, statements, photos, video, other documents) unless legally privileged | Refusing to share the engineer's report; adjuster notes and fraud investigation materials may be kept confidential |
| (q) | Failing to make available, on the insured's written request, the original field adjuster's repair estimate and, if revised, failing to identify who revised it | Providing only the desk-revised estimate |
Related Louisiana Rules That Travel With Paragraph (14)
- Fraudulent insurance acts: committing a fraudulent insurance act as defined in R.S. 22:1923 is itself an unfair trade practice (R.S. 22:1964(13)).
- Claims history, personal lines: a property and casualty insurer must give the first named insured loss information for the three previous policy years within 30 days of a written request (R.S. 22:1964(20)).
- Claims history, commercial lines: loss information for the five previous policy years within 10 business days of a written request (R.S. 22:1964(21)).
- Records: insurers must keep complaint, claim, rating, underwriting and marketing records retrievable for examination, including at least the current calendar year and the two preceding years, and must keep a complete complaint register (R.S. 22:1964(16)–(17)).
- Response time on property claims: an insurer of residential or commercial property must respond to all inquiries or requests from the insured within 14 days, unless the commissioner extends the period for a declared disaster or emergency. It must also provide prompt adjustment by a qualified adjuster licensed under the Claims Adjuster Act. Violations frequent enough to indicate a general business practice are handled under the Unfair Trade Practices Act (R.S. 22:1896).
Three Overlapping Systems, Compared
| Feature | Unfair claims settlement practices | Insurer good-faith duty | Adjuster standards of conduct |
|---|---|---|---|
| Statute | R.S. 22:1964(14) | R.S. 22:1892(I) | R.S. 22:1674.1 |
| Whose conduct | Insurer's claim practices | Insurer (and representatives acting for it) | Individual licensed claims adjuster |
| Threshold | Frequency indicating a general business practice | Listed acts knowingly committed; failure to pay must be arbitrary, capricious or without probable cause | Any violation |
| Enforced by | Commissioner (R.S. 22:1967–1970) | Civil suit by the insured or claimant, for proven economic damages, penalties and fees as the statute allows | Commissioner; deemed an unfair trade practice with R.S. 22:1969 penalties |
| Private cause of action? | Enforced through the commissioner's administrative process | Yes, within R.S. 22:1892's terms | No (R.S. 22:1674.1(D)) |
When a question asks what an insured can sue an insurer for after poor claim handling, look to R.S. 22:1892 and 22:1892.2. When it asks what the commissioner can do about a pattern, look to R.S. 22:1964(14) and 22:1969.
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Test Your Knowledge
What must be shown for claim conduct to violate R.S. 22:1964(14), Louisiana’s unfair claims settlement practices provision?
A
B
C
D
Test Your Knowledge
An insured asks for a proof of loss form on June 1, and the insurer keeps such forms. Under R.S. 22:1964(14)(o), by when must the insurer provide it with reasonable explanations of its use?
A
B
C
D
Test Your Knowledge
A homeowner makes a written request for the original field adjuster’s estimate after the desk adjuster lowered it. Which statement reflects R.S. 22:1964(14)(q)?
A
B
C
D
Test Your Knowledge
Under R.S. 22:1896, how quickly must an insurer of residential or commercial property respond to an insured’s inquiries or requests?
A
B
C
D