Which of the following is an example of an Unfair Claim Settlement Practice?

Failing to provide a reasonable basis for the denial of a claim upon request is considered an example of an unfair claim settlement practice. In insurance law, this practice is unfair because it obstructs the policyholder's ability to understand why their claim was denied. Insurers are required to communicate transparently and provide clear justification for any denial. When a policyholder seeks clarification and is met with insufficient reasoning, it undermines the principles of fairness and good faith that are fundamental to insurance contracts. This lack of clarity can lead to frustration and uncertainty for policyholders who are trying to navigate the claims process, making this practice particularly egregious in the eyes of regulatory standards.

In contrast, requiring proof of loss or setting time limits for submitting a claim are standard procedures in the industry aimed at maintaining order and ensuring that claims can be processed efficiently. Timely payment of claims, on the other hand, is a practice that actually supports policyholders, ensuring they receive the benefits they are entitled to under their insurance contract.