A Tennessee insurer receives a disability claim, and its adjuster denies it the same afternoon without reviewing the medical records, the policy terms, or the claimant's statements. Under T.C.A. § 56-8-105 and the rules of the Tennessee Department of Commerce & Insurance, the adjuster's conduct is:

Why D is correct

T.C.A. § 56-8-105 prohibits denying claims without conducting a reasonable investigation based on all available information, and Tenn. Comp. R. & Regs. 0780-01-05, the Tennessee Department of Commerce & Insurance rule on unfair claims settlement practices, carries out the same standard. A denial issued with no review of the records, the policy, or the claimant's statements fails that standard on its face. The violation lies in the process, so it does not depend on whether the outcome would eventually have been the same after a real investigation.

Why the other options are wrong

• A) Speed is not a defense; the statute requires a reasonable investigation before the denial, however quickly it is issued.
• B) Offering an appeal does not legalize an uninvestigated denial; the investigation obligation precedes the decision.
• C) The prohibited practice is denying without a reasonable investigation, so the violation exists even if the same result would have followed a proper review.

Memory hook

Deny without digging = unfair claims practice; the investigation must come before the no.