State RegulationsNC specificDifficulty 1/5
Under G.S. 58-63-15(11), which of the following is an unfair claims settlement practice?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
G.S. 58-63-15(11) enumerates unfair claims settlement practices, including misrepresenting pertinent facts or insurance policy provisions relating to the coverages at issue, failing to acknowledge and act promptly on communications, and failing to attempt in good faith to effect prompt, fair, and equitable settlements. Committing such acts with such frequency as to indicate a general business practice violates Article 63.
Why the other options are wrong
- B) Prompt acknowledgment and action on claim communications is what G.S. 58-63-15(11) requires; failing to do so is the unfair practice.
- C) Prompt payment after due proof of loss satisfies the statute — the unfair practice is failing to attempt good-faith prompt settlements.
- D) Explaining the coverage basis for a claim decision is proper conduct, not a misrepresentation prohibited by G.S. 58-63-15(11).
Memory hook
Unfair = misrepresent facts or drag your feet; fair = acknowledge, explain, pay.