Question

Which of the following is NOT an unfair claims settlement practice?

A. Failing to fully disclose benefits, coverage, or other policy provisions that pertain to a claim
B. Asking a claimant to sign a release that extends beyond the subject matter of the claim payment.
C. issuing a check in partial settlement of a claim, with language that releases the insurer or its insured from its total liability
D. requesting a partial refund of a payment on a claim, when such payment was in excess of the claim

Answer 1

Option D, requesting a partial refund of a payment on a claim in excess of the claim, is NOT an unfair claims settlement practice.

Step-by-step explanation:

Unfair claims settlement practices refer to actions taken by insurance companies that are considered unethical or in violation of regulations. The options A, B, and C all describe unfair claims settlement practices, such as failing to disclose policy provisions, asking for a release beyond the claim payment, and issuing a check with a release of liability. The correct answer is D. requesting a partial refund of a payment on a claim, when such payment was in excess of the claim.

However, option D is not an unfair claims settlement practice. Requesting a partial refund of an excess payment on a claim is a legitimate action, as the insurance company has mistakenly overpaid the claimant and is entitled to seek reimbursement.