TO: All Insurance Companies Licensed To Transact Business In Kansas
FROM: Kathleen Sebelius
Commissioner of Insurance
SUBJECT: Written Notice To Claimants Of Payment Of Claims In Third Party Settlements
DATE: August 21, 1998
Upon the payment of $5,000 or more in settlement of any third party liability claim, the insurer shall provide written notice to the claimant where:
(1) the claimant is a natural person, and
(2) the payment is delivered to the claimantís attorney or other authorized representative by draft, check, or otherwise.
This requirement shall not create any cause of action for any person against the insurer, other than a government agency, based upon the insurerís failure to provide notice to a claimant as required by this Bulletin, nor shall this Bulletin crease a defense for any party to any cause of action based upon the insurerís failure to provide such notice.
The written notice requirement of this Bulletin is reasonable and appropriate to advise the claimant of settlement of its liability claims by payment to claimantís attorney or other representative. Written notice provides the claimant with an independent and verifiable source of information concerning the facts of the settlement. It also provides the adverse party and insurer with certainty that the settlement has been concluded in a lawful manner.
The second paragraph of this Bulletin is intended to clarify that an insurance carrierís failure to comply with this rule does not create a new cause of action of defense. The insurer may, however, be subject to appropriate sanction by the Kansas Insurance Department.
Kathleen Sebelius, Commissioner of Insurance