(a) Within thirty (30) business days after receipt of a claim for benefits under a long-term care insurance policy or certificate, an insurer shall pay the claim if it is a clean claim or send a written notice acknowledging the date of receipt of the claim and one of the following:

(b) Within thirty (30) business days after receipt of the requested additional information, an insurer shall pay a claim for benefits under a long-term care insurance policy or certificate if it is a clean claim or send a written notice the insurer is declining to pay all or part of a claim and the specific reason or reasons for denial.

(c) If an insurer fails to comply with subsection (a) or (b), the insurer shall pay interest at the rate of one per centum (1%) per month on the amount of the claim that should have been paid but remains unpaid forty-five (45) business days after the receipt of the claim with respect to subsection (a) or all requested additional information with respect to subsection (b). The interest payable under this subsection shall be included in a late reimbursement without requiring the person who filed the original claim to make an additional claim for the interest.

(d) The provisions of this section shall not apply to where the insurer has reasonable basis supported by specific information the claim was fraudulently submitted.

(e) A violation of section 1111.1¹ or this section by an insurer if committed flagrantly and in conscious disregard of the provisions of this act or with frequency sufficient to constitute a general business practice shall be considered a violation of the act of July 22, 1974 (P.L. 589, No. 205),² known as the “Unfair Insurance Practices Act.” A violation of section 1111.1 or this section is deemed an unfair method of competition and an unfair deceptive act or practice pursuant to the “Unfair Insurance Practices Act.”

(f) As used in this section the following words and phrases shall have the meanings given to them in this subsection:

“Claim” means a request for payment of benefits under a policy in effect regardless of whether the benefit claimed is covered under the policy or terms or conditions of the policy have been met.

“Clean claim” means a claim that has no defect or impropriety, including any lack of required substantiating documentation, such as satisfactory evidence of expenses incurred, or a particular circumstance requiring special treatment that prevents timely payment from being made on the claim.