Final answer:
Failing to settle a claim promptly is a violation of the Unfair Claims Settlement Practices Act (UCSPA). This insurance regulation sets guidelines for fair and timely claim handling.
Step-by-step explanation:
When an insurance company fails to settle a claim promptly, it is in violation of the insurance regulation known as Unfair Claims Settlement Practices Act (UCSPA). The UCSPA sets forth guidelines for the timely and fair handling of insurance claims. By failing to settle a claim promptly, an insurance company may be held liable for penalties and fines. Examples of such violations include unnecessarily delaying the investigation of a claim, failing to provide a valid reason for denying a claim, or withholding payment without conducting a reasonable investigation.
Learn more about Insurance regulation and claim settlement