State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insured submits a claim notice to the insurer. Under California Fair Claims regulations (Section 2695.5), upon receiving notice of a claim, the insurer must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 2695.5 requires the insurer to acknowledge communications and begin investigating a claim promptly upon receiving notice. The insurer may not sit on a claim; it must respond within specified timeframes, request any needed information, and proceed toward a reasonable resolution. This duty is a core part of California's fair claims requirements.
Why the other options are wrong
- B) Waiting for litigation defeats the purpose of claims processing and invites unnecessary lawsuits.
- C) Ignoring or denying without investigation violates the acknowledgment and investigation duties.
- D) Returning the notice unprocessed is a refusal to handle the claim and violates the regulation.
Memory hook
Notice in, acknowledgment out. Fair claims start with a prompt reply, not a silent wait.