Texas General Lines — Property and CasualtyTexas Laws and RegulationsEasy
A Texas-licensed adjuster is found to have repeatedly delayed claim payments without reasonable explanation and failed to promptly provide a reasonable explanation for the denial of a claim. These actions are examples of which of the following?
- ATwisting
- BUnfair Claims Settlement Practices
- CMisrepresentation
- DRebating
Show answer & explanationAnswer & explanation
Correct answer: B. Unfair Claims Settlement Practices
Repeatedly delaying claim payments and failing to provide explanations for denials are specific examples of prohibited Unfair Claims Settlement Practices under the Texas Insurance Code.
Why the other options are wrong
- A. Twisting involves inducing a policyholder to replace a policy to their detriment, which is not described here.
- C. Misrepresentation involves making false statements about a policy, which is different from how claims are handled.
- D. Rebating involves offering something of value not specified in the policy, which is not described here.
Unfair Claims Settlement Practices
Prohibited actions by an insurer or adjuster during the claims process that are considered unfair or deceptive under state insurance laws.
- Includes delaying payments, failing to investigate, and not explaining denials.
- Protects policyholders from arbitrary or unethical claims handling.
- Can result in penalties for the insurer or adjuster.
Memory trick: If claims are handled unfairly, with delays and no explanations, it's an Unfair Claims Settlement Practice.