State RegulationsAZ specificDifficulty 2/5
An Arizona insurer receives a life claim with due proof of death and reasonably clear liability, but simply sits on the file for months without investigating or making any offer. Under Arizona law, the insurer's conduct is best described as:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Arizona law, A.R.S. 20-462, obligates insurers to attempt good-faith, prompt, fair, and equitable settlements when liability is reasonably clear; prolonged inaction on a claim supported by due proof violates that duty.
Why the other options are wrong
- A) Reserve accounting does not excuse the statutory settlement duty owed to claimants.
- C) No open-file grace period exists; the duty applies once due proof is received and liability is clear.
- D) Beneficiary claims are the normal mode of life claim payment; inaction is not a deferral right.
Memory hook
Sitting on a clear claim is itself the unfair practice.