Last month, the Division of Insurance issued DOI Bulletin 2007-15: Written Notice to Claimants of Payment of Claims in Third Party Settlements. Insurance companies are now directed to notify clients when payment of a settlement of $5000 or more has been made to the client’s attorney. Surprisingly, no notice to the claimant had been required in the past. Notice must include:
- The amount of the check and the party to whom the check was mailed; and
- The address of the party to whom the check was mailed; and
- If payment is made by a draft or check, a copy of such draft or check; or
- If payment is made by the electronic transfer of funds, the amount of such transfer, the date of such transfer and the party to whom the transfer was made; and
- The statement, “If you have any questions about this notice, please contact your attorney.”
According to the Boston Globe, the new rule comes as a result of a very public case of malfeasance in which a Massachusetts attorney kept insurance settlement checks without notifying his clients that they had been received.