State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Fair Claims Settlement Practices Regulations, an insurer that has determined that a claim is payable must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The fair claims regulations require insurers to settle claims promptly, fairly, and reasonably once the insurer determines that liability and damages are clear. Unreasonable delay, arbitrary denial, and coercive lowball offers are prohibited. Prompt, good-faith settlement protects claimants and is a defining standard of California market conduct for claims handling.
Why the other options are wrong
- B) Unreasonable delay is an unfair claim practice prohibited by the regulations.
- C) Insurers are expected to settle promptly without forcing claimants into litigation.
- D) Making lowball offers to pressure claimants violates the requirement of fair and reasonable settlement.
Memory hook
Clear claim, quick check. Prompt, fair, reasonable — the three words of claims handling.