304.39-210 Obligor's duty to respond to claims.
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Basic and added reparation benefits are payable monthly as loss accrues. Loss
accrues not when injury occurs, but as work loss, replacement services loss, or
medical expense is incurred. Benefits are overdue if not paid within thirty (30) days
after the reparation obligor receives reasonable proof of the fact and amount of loss
realized, unless the reparation obligor elects to accumulate claims for periods not
exceeding thirty-one (31) days after the reparation obligor receives reasonable proof
of the fact and amount of loss realized, and pays them within fifteen (15) days after
the period of accumulation. Notwithstanding any provision of this chapter to the
contrary, benefits are not overdue if a reparation obligor has not made payment to a
provider of services due to the request of a secured person when the secured person
is directing the payment of benefits among the different elements of loss. If
reasonable proof is supplied as to only part of a claim, and the part totals one
hundred dollars (0) or more, the part is overdue if not paid within the time
provided by this section. Medical expense benefits may be paid by the reparation
obligor directly to persons supplying products, services, or accommodations to the
claimant, if the claimant so designates.
Overdue payments bear interest at the rate of twelve percent (12%) per annum,
except that if delay was without reasonable foundation the rate of interest shall be
eighteen percent (18%) per annum.
A claim for basic or added reparation benefits shall be paid without deduction for
the benefits which are to be subtracted pursuant to the provisions on calculation of
net loss if these benefits have not been paid to the claimant before the reparation
benefits are overdue or the claim is paid. The reparation obligor is entitled to
reimbursement from the person obligated to make the payments or from the
claimant who actually receives the payments.
A reparation obligor may bring an action to recover benefits which are not payable,
but are in fact paid, because of an intentional misrepresentation of a material fact,
upon which the reparation obligor relies, by the insured or by a person providing an
item of medical expense. The action may be brought only against the person
providing the item of medical expense, unless the insured has intentionally
misrepresented the facts or knows of the misrepresentation. An insurer may offset
amounts he is entitled to recover from the insured under this subsection against any
basic or added reparation benefits otherwise due.
A reparation obligor who rejects a claim for basic reparation benefits shall give to
the claimant prompt written notice of the rejection, specifying the reason. If a claim
is rejected for a reason other than that the person is not entitled to the basic
reparation benefits claimed, the written notice shall inform the claimant that he may
file his claim with the assigned claims bureau and shall give the name and address
of the bureau.
Effective: July 15, 1998
History: Amended 1998 Ky. Acts ch. 200, sec. 2, effective July 15, 1998. -- Created
1974 Ky. Acts ch. 385, sec. 21, effective July 1, 1975.
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