State RegulationsNJ specificDifficulty 1/5
An insurer receives repeated written communications from a policyholder about her pending claim and lets them sit unanswered for an extended period. Under New Jersey's unfair claim settlement framework, how is this conduct classified?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
N.J.S.A. 17B:30-13.1 expressly identifies failing to acknowledge and to act reasonably promptly upon communications with respect to claims as an unfair claim settlement practice, and N.J.A.C. 11:2-17.1 fleshes out the handling standards. A policyholder's letters and calls are not noise to be ignored; they are the claim process itself. The New Jersey Department of Banking and Insurance treats chronic silence on claim files as market-conduct evidence, so insurers must log, acknowledge, and answer claim communications promptly.
Why the other options are wrong
- A) There is no regulatory license to stall; prompt acknowledgment and action on claim communications is the standard, not an option.
- B) The producer cannot discharge the insurer's statutory claims-handling duty; the obligation runs from the insurer to the policyholder under state law.
- D) Claims handling is squarely within the Department of Banking and Insurance's market-conduct jurisdiction; silence on claim files is reviewable conduct.
Memory hook
Silence is a violation: acknowledge and act promptly, or answer to the department.