State RegulationsAZ specificDifficulty 2/5
An Arizona insurer receives a claim and lets it sit for months without any investigation or standard for handling it. Under A.R.S. 20-462 and A.A.C. R20-6-801, this conduct is best described as:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
A.R.S. 20-462 and A.A.C. R20-6-801 require insurers to maintain reasonable standards for the prompt investigation and processing of claims. Letting a claim sit without investigation or standards is the core unfair claim settlement practice the rule describes, and it exposes the insurer to Director action.
Why the other options are wrong
- A) Claims discretion does not extend to ignoring claims; reasonable standards are required.
- B) Defamation under A.R.S. 20-445 concerns disparaging competitors and has no connection to claim handling.
- D) Prohibited inducements under A.R.S. 20-452 concern offers of value to procure insurance, not claims processing.
Memory hook
No standards, no investigation, big trouble — 20-462 with R20-6-801.