Match each of the following insurer or adjuster practices with the specific Unfair Claims Settlement Practice violation it represents under the NAIC Model Act.
- To streamline accounting, an insurer combines payments for a liability claim's bodily injury and property damage into a single lump-sum check sent to the claimant without an itemized breakdown.Making claim payments without statements setting forth the applicable coverages.
- As an internal anti-fraud measure, an adjuster requires a comprehensive preliminary damage report, and subsequently mandates a formalized sworn statement containing identical information before authorizing payment.Delaying payment by requiring duplicative proof of loss submissions.
- A carrier sets an internal guideline to cap initial settlement offers for undisputed structural damage at 40% of the adjuster's estimate, acknowledging most insureds will not pursue legal action for the difference.Compelling insureds to institute litigation by offering substantially less than what is due.
- A claims unit receives a completed proof of loss and finalizes its decision to reject a claim on May 1st, but intentionally holds the denial letter until July 15th to manage quarterly reserve numbers.Failing to affirm or deny coverage within a reasonable time after proof of loss is completed.
Answer
The correct pairings align each scenario with its corresponding statutory violation category based on the NAIC Model Act provisions.
Each scenario accurately depicts a prohibited practice under the NAIC Unfair Claims Settlement Practices Model Act, disguised as a legitimate business operation. The correct matches identify the specific statutory provision that prohibits the described administrative action, lowball offer, duplicative documentation request, or deliberate communication delay.
Step-by-Step Solution
Key Concept
Unfair Claims Settlement Practices