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A
Standard practices
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B
Specific practices defined by state law as unfair when committed with such frequency as to indicate a general business practice — examples include misrepresenting policy provisions, failing to respond promptly, denying claims without reasonable investigation, and offering unreasonably low settlements
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C
Practices that benefit consumers
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D
Practices required by federal law
Why this is the answer
Most states have enacted Unfair Claims Settlement Practices Acts (UCSPA) modeled on the NAIC Model Act. Common prohibited practices when occurring with such frequency as to indicate a general business practice: (1) Misrepresenting pertinent facts or insurance policy provisions; (2) Failing to acknowledge or act reasonably promptly upon communications about claims; (3) Failing to adopt and implement reasonable standards for prompt claim investigation; (4) Refusing to pay claims without conducting a reasonable investigation; (5) Failing to affirm or deny coverage within a reasonable time after proof of loss; (6) Not attempting in good faith to effectuate prompt, fair, and equitable settlements when liability is reasonably clear; (7) Compelling insureds to institute litigation by offering substantially less than amounts ultimately recovered in actions; (8) Misleading insureds about applicable statutes of limitations; (9) Attempting to settle claims for less than reasonable amounts; (10) Failing to settle claims under one coverage to influence settlements under other coverages. Penalties: state regulatory action (fines, license consequences); some states allow private rights of action against insurers; consumer complaint procedures. Adjusters should know their state's specific UCSPA provisions and follow time limits and standards rigorously. Industry training emphasizes these practices because regulatory and litigation exposure is significant.
Source: NAIC Adjuster UCSPA