A. The commission has exclusive jurisdiction as prescribed in this section over complaints involving alleged unfair claim processing practices or bad faith by an employer, self-insured employer, insurance carrier or claims processing representative relating to any aspect of this chapter. The commission shall investigate allegations of unfair claim processing or bad faith either on receiving a complaint or on its own motion.
B. If the commission finds that unfair claim processing or bad faith has occurred in the handling of a particular claim, it shall award the claimant, in addition to any benefits it finds are due and owing, a benefit penalty of twenty-five percent of the benefit amount ordered to be paid or $500, whichever is more.
C. If the commission finds that an employer, self-insured employer, insurance carrier or claim processing representative has a history or pattern of repeated unfair claim processing practices or bad faith, it may impose a civil penalty of up to $1,000 for each violation found. The civil penalty shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.
D. Any party aggrieved by an order of the commission under this section may request a hearing pursuant to section 23-947. The hearing and decision shall be conducted pursuant to section 23-941.
E. The commission shall adopt by rule a definition of unfair claim processing practices and bad faith. In adopting a rule under this subsection, the commission shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the commission's own experience in processing workers' compensation claims and the workers' compensation and insurance laws of this state.
F. This section does not limit or interfere with the authority of the department of insurance and financial institutions as provided by law to regulate any insurance carriers, including the jurisdiction of the department of insurance and financial institutions over unfair claim settlement practices as provided in section 20-461.
Notes of Decisions
Cited in
17
cases (
2 in the last 5 years), 1967–2023 · leading case:
Hayes v. Cont'l Ins., 872 P.2d 668 (Ariz. 1994).
Hayes v. Cont'l Ins., 872 P.2d 668 (Ariz. 1994).
· cites it 31× “This case turns on the interpretation of AR.S. § 23-930, a statute regulating bad faith claims asserted against workers’ compensation carriers.”
No Ins. Section/Special Fund Div. v. Indus. Comm'n, 927 P.2d 791 (Ariz. Ct. App. 1996).
· cites it 27× “The next month, Leanza filed a complaint for bad faith against her employer pursuant to A.R.S. § 23-930. In March 1994, the Commission found bad faith and ordered the employer to pay Leanza a penalty of $500.”
Mendoza v. McDonald's Corp., 213 P.3d 288 (Ariz. Ct. App. 2009).
· cites it 2× “The administrative law judge also concluded McDonald’s had committed bad faith under A.R.S. § 23-930 (Supp.2008) by unreasonably delaying approval of the carpal tunnel surgery.”
Hays v. Cont'l Ins., 838 P.2d 1334 (Ariz. Ct. App. 1992).
· cites it 30× “§ 23-941, which provides that hearings concerning workers’ compensation claims shall be before an administrative law judge.”
Stenz v. Indus. Comm'n, 353 P.3d 361 (Ariz. 2015).
· cites it 8× “(As noted in the concurring opinion, ¶ 17, no party has urged us to depart from DKI’s holding that interest only begins to accrue when the carrier receives notice of the claim.”
Bohn v. Indus. Com'n of Arizona, 984 P.2d 565 (Ariz. Ct. App. 1999).
· cites it 2× “On the contrary, our experience is that carriers rather freely approve third-party settlements. ¶ 29 The dissent also dismisses the protections that claimants have against abuses by carriers.”
Martin v. Indus. Comm'n, 422 P.2d 178 (Ariz. Ct. App. 1967).
· cites it 2× “are an ‘order’ of this Commission as defined by law, and are deemed and considered by this Commission to be prima facie, reasonable and lawful unless determined otherwise, and unless rehearing is applied for within twenty (20) days, within the provisions of Rules 1, 30 to 44…”
Tapia v. Indus. Comm'n of Ariz., 426 P.3d 1237 (Ariz. Ct. App. 2018).
· cites it 2× “¶6 Section 23-930(B), A.R.S., states that if an ALJ "finds that unfair claim processing .”
Chavis v. Indus. Comm'n, 885 P.2d 112 (Ariz. Ct. App. 1994).
· cites it 2× “But see A.R.S. § 23-930 and Ariz.Admin.Code R4-13-163 (investigations into bad faith and unfair claim processing practices).”
Macintyre v. Indus. Comm'n, 960 P.2d 52 (Ariz. Ct. App. 1998).
· cites it 4× “section 23-930(B) from costs and attorneys’ fees for a frivolous appeal, we disagree.”
— Ariz. Rev. Stat. § 23-930(A) — 4 cases
Hayes v. Cont'l Ins., 872 P.2d 668 (Ariz. 1994).
“This case turns on the interpretation of AR.S. § 23-930, a statute regulating bad faith claims asserted against workers’ compensation carriers.”
Hays v. Cont'l Ins., 838 P.2d 1334 (Ariz. Ct. App. 1992).
“§ 23-941, which provides that hearings concerning workers’ compensation claims shall be before an administrative law judge.”
— Ariz. Rev. Stat. § 23-930(B) — 5 cases
No Ins. Section/Special Fund Div. v. Indus. Comm'n, 927 P.2d 791 (Ariz. Ct. App. 1996).
“The next month, Leanza filed a complaint for bad faith against her employer pursuant to A.R.S. § 23-930. In March 1994, the Commission found bad faith and ordered the employer to pay Leanza a penalty of $500.”
Hayes v. Cont'l Ins., 872 P.2d 668 (Ariz. 1994).
“This case turns on the interpretation of AR.S. § 23-930, a statute regulating bad faith claims asserted against workers’ compensation carriers.”
Tapia v. Indus. Comm'n of Ariz., 426 P.3d 1237 (Ariz. Ct. App. 2018).
“¶6 Section 23-930(B), A.R.S., states that if an ALJ "finds that unfair claim processing .”
Macintyre v. Indus. Comm'n, 960 P.2d 52 (Ariz. Ct. App. 1998).
“section 23-930(B) from costs and attorneys’ fees for a frivolous appeal, we disagree.”
— Ariz. Rev. Stat. § 23-930(C) — 1 case
No Ins. Section/Special Fund Div. v. Indus. Comm'n, 927 P.2d 791 (Ariz. Ct. App. 1996).
“The next month, Leanza filed a complaint for bad faith against her employer pursuant to A.R.S. § 23-930. In March 1994, the Commission found bad faith and ordered the employer to pay Leanza a penalty of $500.”
— Ariz. Rev. Stat. § 23-930(E) — 3 cases
Hayes v. Cont'l Ins., 872 P.2d 668 (Ariz. 1994).
“This case turns on the interpretation of AR.S. § 23-930, a statute regulating bad faith claims asserted against workers’ compensation carriers.”
Tapia v. Indus. Comm'n of Ariz., 426 P.3d 1237 (Ariz. Ct. App. 2018).
“¶6 Section 23-930(B), A.R.S., states that if an ALJ "finds that unfair claim processing .”
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