State RegulationsOH specificDifficulty 2/5
A Columbus insurer's claim files show a repeated pattern: no reasonable standards for prompt investigation and claim denials issued without any investigation. Under OAC 3901-1-07, when do acts like these amount to unfair claim settlement practices?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
OAC 3901-1-07 enumerates unfair claim settlement practices, including failing to adopt reasonable standards for prompt investigation, denying claims without conducting a reasonable investigation, and misrepresenting pertinent facts or policy provisions. These acts violate the rule when committed with such frequency as to indicate a general business practice, and they also support action as unfair practices under ORC 3901.21.
Why the other options are wrong
- A) The rule keys the violation to a pattern of frequency indicating a general business practice; it does not treat every isolated act as an automatic violation.
- C) A civil judgment by the policyholder is not a prerequisite; the Ohio Department of Insurance can act on the practice itself, and the rule contains no judgment-first requirement.
- D) The rule focuses on the insurer's claim-handling conduct regardless of whether the acts are performed by inside staff or outside vendors; vendor identity is not an element.
Memory hook
Once is a mistake; a pattern is a practice.