Connecticut Laws Life, Accident & Health (LAH) Practice Test 2025 - Free LAH Exam Practice Questions and Study Guide

Failing to promptly investigate and settle legitimate claims is an example of an unfair claims settlement practice because it undermines the fundamental duty of insurers to fulfill their contractual obligations to policyholders. Insurance companies have a legal and ethical responsibility to handle claims fairly and promptly. When a legitimate claim is not addressed in a timely manner, it not only causes undue stress and difficulty for the claimant but also indicates a lack of good faith on the part of the insurer. This practice can lead to increased dissatisfaction and a breakdown in trust between the insurer and the policyholder. In contrast, investigating all claims, providing timely responses to inquiries, and maintaining regular communication with claimants are all best practices that demonstrate a commitment to fair treatment and customer service in the claims process.