375.445. Company operating fraudulently or in bad faith, penalties.

MISSOURI STATUTES AND CODES

375.445. Company operating fraudulently or in bad faith, penalties.

Company operating fraudulently or in bad faith, penalties.

375.445. 1. It is unlawful for any insurance company transactingbusiness under the laws of this state to:

(1) Conduct its business fraudulently;

(2) Fail to carry out its contracts in good faith; or

(3) Habitually and as a matter of business practice compellingclaimants under policies or liability judgment creditors of the insured toeither accept less than the amount due under the terms of the policy orresort to litigation against the company to secure payment of the amountdue.

2. If the director determines that a person has engaged, is engagingin, or has taken a substantial step toward engaging in an act, practice orcourse of business constituting a violation of this section or a ruleadopted or order issued pursuant thereto, or that a person has materiallyaided or is materially aiding an act, practice, omission, or course ofbusiness constituting a violation of this section or a rule adopted ororder issued pursuant thereto, the director may issue such administrativeorders as authorized under section 374.046, RSMo. Each practice inviolation of this section is a level two violation under section 374.049,RSMo. Each act as a part of a practice does not constitute a separateviolation under section 374.049, RSMo. The director may also suspend orrevoke the license or certificate of authority of such person for anywillful violation.

3. If the director believes that a person has engaged, is engagingin, or has taken a substantial step toward engaging in an act, practice orcourse of business constituting a violation of this section or a ruleadopted or order issued pursuant thereto, or that a person has materiallyaided or is materially aiding an act, practice, omission, or course ofbusiness constituting a violation of this section or a rule adopted ororder issued pursuant thereto, the director may maintain a civil action forrelief authorized under section 374.048, RSMo. Each practice violation ofthis section is a level two violation under section 374.049, RSMo. Eachact as part of a practice does not constitute a separate violation undersection 374.049, RSMo.