During a state market conduct examination, auditors review several claims file notes to determine regulatory compliance. Match each adjuster's documented action to the specific Unfair Claims Settlement Practice violation it represents under the NAIC model act.
- Withholding an undisputed $12,000 property damage payment to force the third-party claimant into accepting a low bodily injury settlement.Failing to promptly settle claims under one portion of coverage to influence settlements under other portions.
- Reducing a death benefit payout based on a modified health questionnaire that the deceased policyholder never signed or reviewed.Attempting to settle claims based on an application altered without the knowledge or consent of the insured.
- Mailing a windstorm loss check to a homeowner without any documentation indicating whether the funds apply to the dwelling structure or personal property.Making claims payments not accompanied by a statement setting forth the coverage under which payments are made.
- Demanding a fourth identical medical status report from a treating physician before processing a monthly disability income payment.Delaying claim payment by requiring subsequent submissions containing substantially the same information.
Answer
Each adjuster action pairs with a specific NAIC unfair claims practice: withholding property damage matches leveraging coverages, reducing death benefits matches altered applications, undocumented checks match failure to state coverage, and redundant medical requests match requiring duplicate submissions.
Each scenario demonstrates a specific prohibited act under the NAIC Unfair Claims Settlement Practices Act. Insurers must handle claims in good faith, providing clear communication regarding payments, avoiding coverage coercion, and adhering to strict procedural fairness without causing artificial delays.
Step-by-Step Solution
Key Concept
Identifying Specific Unfair Claims Settlement Practices