UNFAIR TRADE, MARKETING & CLAIM SETTLEMENT PRACTICES

The NAIC Model Unfair Claim Settlement Practice Act provides for a financial penalty of _________ for each violation of the Act.

$1,000. The NAIC Model Act provides for a penalty of $1,000 per violation. However, the states usually set their own financial penalties and some even set differing penalties for intentional and unintentional acts.

Texas insurers must acknowledge receipt of a claim within:

15 days.

Indemnify Insurance, Inc. is a Texas insurer has violated the regulations with regard to the timely payment of claims. Indemnify will now be required to pay interest on the amount of the claim at a rate of:

18% per year. The insurer must pay 18% a year as damages to the insured/claimant.

When a Texas insurer has reason to believe that a loss resulted from arson, the time limit the insurer has to notify the claimant of acceptance or denial of the claim is _______ after the date the insurer receives all items, statements, and forms required by the insurer to process the claim.

30 days

In Texas, if an insurer delays the payment of a claim beyond the period specified by law for more than _________, they must pay damages to the insured/claimant.

60 days

The Texas insurance code specifies that "misrepresentation" includes all of the following, EXCEPT:

Any false statement.

The NAIC Model Unfair Claim Settlement Practice Act DOES NOT apply to any of the following types of coverage, EXCEPT:

Dwelling insurance.

Which of the following is NOT an example of an unfair claim settlement practice?

Failing to examine a claimant under oath.

Katherine lives in Texas. A third-party claim has been filed against her insurance policy by Joe, for an accident in which Katherine was liable. Joe's attorney contacts Katherine's insurance company and makes an initial offer to settle the claim. The insurance company must notify Katherine of the offer, in writing:

Not later than the 10th day after the date the initial offer was made. The insurance company must notify Katherine of the initial offer to settle a third-party claim not later than the 10th day after the date the initial offer was made. The notification must be in writing.

Which of the following is NOT an NAIC Unfair Claim Settlement Practice?

Paying claims without conducting a reasonable investigation.

Which of the following is considered an Unfair Claim Settlement Practice?

Requiring a claimant to submit a preliminary claim report before moving forward on the claim.

Typically, the length of time an insurer has to issue a Reservation of Rights letter is:

Set by state law.

Which of the following statements is NOT TRUE with regard to the "Defamation of an Insurer" as it is explained in the Texas insurance code?

The defamatory statement must be made in written form.

The record of complaints that all insurers in Texas must maintain must indicate all of the following, EXCEPT:

The license number of the person within the insurance company that generated the complaint from the client.

If an insurer in Texas has received a large number of complaints of unfair claim settlement practices, the Department may subject the insurer to closer supervision. As part of this closer supervision, the Department can request that the insurer submit periodic reports containing claims information for:

The preceding 12 months or from the date of the insurer's last periodic report, whichever is shorter.

In Texas it is considered to be an unfair or prohibited practice if an insurer does not keep a record of all complaints received for:

The preceding three years.

One of the Unfair Claim Settlement Practices is "failing to affirm or deny coverage of claims within a reasonable time after having completed its investigation related to such claim or claims". How is the length of time that is considered "reasonable" decided?

The state legislatures set the reasonable time period by statute.