(1) It is the duty of an insurer to endeavour to resolve a claim, by
settlement or otherwise, as expeditiously as possible.
(2) Once liability has
been admitted (wholly or in part) or determined (wholly or in part) against
the person against whom the claim is made, it is the duty of an insurer to
make payments to or on behalf of the claimant in respect of:
(a) hospital,
medical and pharmaceutical expenses, and
(b) rehabilitation expenses, subject
to Part 4, and
(c) respite care in respect of a claimant who is seriously
injured and in need of constant care over a long term,
as incurred.
(2A) The
duty of an insurer under subsection (2) to make payments applies only to the
extent to which those payments:
(3) It is a condition of a
third-party insurer's licence that the insurer must comply with this section.
(4) A payment made under this section to or on behalf of a claimant before the
claimant obtains judgment for damages against the defendant is, to the extent
of its amount, a defence to proceedings by the claimant against the defendant
for damages.
Note : Section 45 places obligations on insurers to act as
expeditiously as possible, and to make certain payments of an interim nature
once liability has been admitted or determined. The obligations are consistent
with the insurer's obligations regarding the rehabilitation of the claimant
under sections 37 and 38.
Failure to observe the obligations in individual cases exposes the insurer to
an award of interest under section 73. Continual failure to observe the
obligations places an insurer's licence at risk (section 45 (3)).
In order to meet its obligations, the insurer must have sufficient information
to enable it to properly investigate and assess the claim, and make an
appropriate offer of settlement. This requires early notice of the claim under
section 43, and the provision of full particulars of the claim under
section 48.