(1)(a) Unless otherwise provided by law, an insurer shall timely pay every valid insurance claim made by an insured.
(b) By rule the commissioner may prescribe:
(i) the kinds of notice and proof of loss that will establish validity;
(ii) the manner in which an insurer may make a bona fide denial of a claim;
(iii) the periods of time within which payment is required to be made to be timely; and
(iv) the reasonable interest rates to be charged upon late claim payments.
(2)(a) Notwithstanding Subsection (1) and subject to Subsection (2)(b), the payment of a claim is not overdue during any period in which:
(i) the insurer is unable to pay the claim because there is no recipient legally able to give a valid release for the payment; or
(ii) the insurer is unable to determine who is entitled to receive the payment.
(b) Subsection (2)(a) applies only if the insurer:
(i) promptly notifies the claimant of the inability to pay the claim; and
(ii) offers in good faith to pay the claim promptly when the inability to pay the claim is removed.
(3) This section applies only to a claim for first party benefits made by a person who is:
(a) named or defined as an insured under the terms of an insurance policy;
(b) described as a covered person under the terms of a policy of health care insurance as defined in Section
31A-1-301; or
(c) named, defined, or described:
(i) as:
(A) an insured;
(B) a beneficiary;
(C) a policyholder; or
(D) otherwise covered person; and
(ii) under the terms of:
(A) a life insurance policy; or
(B) an annuity.