State RegulationsIL specificDifficulty 2/5
An Illinois insurer offers a claimant far less than the amount its own investigation supports, hoping the claimant will give up or sue rather than recover the full value of the claim. Under 215 ILCS 5/154.6, how is this conduct classified?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
215 ILCS 5/154.6 catalogues bad-faith settlement tactics: attempting to settle a claim for substantially less than the amount to which the claimant is reasonably entitled, thereby compelling the claimant to sue, is a listed improper claims practice. Documentation and negotiation posture do not convert a lowball-into-suit strategy into lawful handling.
Why the other options are wrong
- A) A claimant's freedom to reject an offer does not legalize the tactic; 215 ILCS 5/154.6 targets the lowball-into-suit approach itself.
- B) The improper practice does not depend on the form of the offer; an oral lowball calculated to force suit is equally within 215 ILCS 5/154.6.
- D) File documentation does not cleanse the practice; the catalogue looks at the substance of the settlement conduct under the Illinois Insurance Code.
Memory hook
Lowball-and-litigate is on the list: settlement must be reasonable, not a gauntlet.