West Virginia State Life Insurance Practice Exam

What is considered an unfair claims practice related to proof of loss statements?

1. Failure to provide claim forms

2. Unreasonably delaying claim payments

3. Not accepting a valid proof of loss statement

4. Requesting proof of loss for every claim

The correct answer is: Not accepting a valid proof of loss statement

Not accepting a valid proof of loss statement is considered an unfair claims practice because it undermines the integrity of the claims handling process. When a policyholder submits a proof of loss that meets the requirements set forth in the insurance policy and applicable state regulations, the insurer has a legal obligation to accept this documentation and assess the claim accordingly. Rejecting valid proof without a legitimate reason can be viewed as a way to avoid honoring the policy, which not only harms the insured but also violates ethical standards established to protect consumers in the insurance industry. In contrast, while failure to provide claim forms, unreasonably delaying claim payments, and requesting proof of loss for every claim can also create frustration and inconvenience, they do not directly involve the rejection of a valid submission. Those practices might lead to issues but highlight different aspects of claims processing that are also regulated under unfair claims practices laws. However, refusing to accept valid proof is a more definitive breach of the duty owed to the policyholder, as it disregards the fundamental principles of claims resolution.