Which action is an unfair claims settlement practice?

• A. Paying promptly
• B. Investigating thoroughly
• C. Failing to promptly provide reasonable explanations for the denial of claims
• D. Accepting a claim without investigation

Answer: (C)

Unfair claims handling includes the obligation to communicate clearly and promptly about decisions, especially when a claim is denied. When a denial is issued, the insurer should provide a written, reasonable explanation that cites the policy provisions and the facts that justify the denial. If this explanation is delayed or missing, the insured is left in the dark about why the claim was denied and how to challenge it, which is unfair. The other actions described—paying promptly, investigating thoroughly, or accepting a claim without investigation in appropriate cases—reflect fair, diligent handling.