What Is The Time for Responding to a Defense Tender?
Insurers must acknowledge an initial claim within 20 days of receipt. Okla Admin. Code § 365:15-3-5.
Insurers must accept or deny coverage within 45 days after receipt of proof of loss. Okla. Admin. Code § 365:15-3-5.
Does Reserving Rights Create a Conflict of Interest?
No cases found.
Does a Reservation of Rights Create Additional Duties?
No cases found.
What Must Be Done If A Conflict of Interest Exists?
An insurer was obligated to pay for defense counsel of the insured’s own choosing where defense counsel admitted to an ethical dilemma based upon the insurer’s refusal to permit him to pursue a defense strategy that would have conflicted with the insurer’s reservation of rights. Nisson v. American Home Assurance Co., 917 P.2d 488, 490 (Okla. App. 1996).
Who Is Responsible for Fees of Independent Counsel?
The insurer. See above.
What Are Independent Counsel’s Obligations?
No cases found.
What Settlement Duties Exist?
No cases found.
What Actions May Result in a Claim for Bad Faith?
To establish a claim of an insurer’s bad faith breach of its implied covenant of good faith and fair dealing, an insured must show that the insurer’s refusal to pay a claim was unreasonable and unjustified. Christian v. American Home Assur. Co., 577 P.2d 899, 901 (Okla. 1978) Willis v. Midland Risk Ins. Co., 42 F.3d 607 (10th Cir. 1994).
No private right of action exists for an insured under the Unfair Claims Settlement Practices Act. Walker v. Chouteau Lime Co., Inc., 849 P.2d 1085, 1086 (Okla. 1993).
Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?
No cases found.
Are Punitive Damages Recoverable in Insurer-Insured Dispute?
Punitive damages are available in bad faith claims if an insured shows that the insurer’s denial of coverage for unreasonable under the circumstances. McCorkle v. Great Atlantic Ins. Co., 637 P.2d 583 (Okla. 1981). To recover punitive damages, the insured must show that the insurer acted with oppression, malice, fraud or gross negligence or wanton recklessness. Newport v. USAA, 11 P.3d 190, 204 (Okla. 2000).
Alternative Coverage Options
An insurer unsure of its coverage obligations may either: (1) seek declaratory relief; (2) defend under a reservation of rights; or (3) refuse to defend and run the risk that the claims will prove to be covered. First Bank of Turley v. Fid. and Dep. Ins. Co. of Maryland, 928 P.2d 298, 303-304 (Okla. 1996).
Relevant Statutes
Declaratory Judgment – Okla. Stat. tit. 12 § 1651.
“District courts of record, may, in cases of actual controversy, determine rights, status, and other legal relations, . . . whether or not further relief is or could be claimed, except that no such declaration shall be made concerning liability or non liability for damages on account of alleged tortuous injuries to person or to property either before or after judgment or for compensation alleged to be due under workers’ compensation laws for injuries to person or concerning obligations alleged to arise under policies of insurance covering liability or indemnity against liability for such injuries. The determination may be made either before or after there has been a breach of any legal duty or obligation, and it may be either affirmative or negative in form and effect; provided however, that a court may refuse to make such determination where the judgment, if rendered, would not terminate the controversy, or some part thereof, giving rise to the proceeding.”
Unfair Claims Settlement Practices Act – 36 Okla. Stat. § 1250, et seq.
Unfair or deceptive consumer practices – Okla. Stat. 78 § 51, et seq.