State RegulationsMA specificDifficulty 3/5
During the handling of a first-party claim, which action by a Massachusetts insurer crosses into an unfair claims settlement practice under M.G.L. c. 176D, § 3(9)?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.G.L. c. 176D, § 3(9) condemns compelling claimants to institute litigation to recover amounts due by offering substantially less than the amounts ultimately paid. A lowball offer engineered to force the claimant into court is an abuse of the claims process that the Massachusetts Division of Insurance prosecutes through the catalogue. Legitimate claims work — requesting reasonably related documents, deciding after a real investigation, and explaining the policy grounds — remains lawful and expected.
Why the other options are wrong
- A) Requesting records reasonably related to the claim is proper investigation, outside the abuses cataloged at M.G.L. c. 176D, § 3(9).
- B) A written denial supported by a reasonable investigation is the fair-handling behavior M.G.L. c. 176D, § 3(9) is designed to produce.
- D) Explaining the policy provisions behind a decision is transparency, not misrepresentation within the meaning of M.G.L. c. 176D, § 3(9).
Memory hook
Starve the claim until they sue = the § 3(9) lowball trap; fair process is the safe harbor.