California Insurance Code & EthicsQuestion 57 of 215
An insurer adopts a policy of consistently failing to acknowledge claim communications within the regulatory time frame. This is most accurately characterized as:
a.Lawful as long as the claim is eventually paid
b.A defense to bad faith
c.An isolated mistake
d.A general business practice that violates the Unfair Practices Act when committed with such frequency
Explanation
Section 790.03(h) prohibits unfair claim settlement practices when committed knowingly or with such frequency as to indicate a general business practice. A repeated failure to acknowledge claims is exactly the kind of pattern the statute targets.
Law Reference: Cal. Ins. Code §790.03(h)(3)Practice all 215 questions free — no signup required.
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