State RegulationsIL specificDifficulty 2/5
An adjuster handling health claims routinely ignores written communications from policyholders and misstates policy provisions to avoid paying benefits. Under the Illinois Insurance Code, how are these practices classified?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
215 ILCS 5/154.6 sets out the improper claims practices catalogue of the Illinois Insurance Code: misrepresenting pertinent facts or policy provisions, failing to acknowledge and act promptly on communications, and failing to maintain reasonable claim-investigation standards are all enumerated. Combined with the Director of Insurance's unfair-methods authority, this makes the adjuster's routine conduct a regulatory violation, not a negotiation style.
Why the other options are wrong
- B) The statute targets the pattern of mishandling, including ignoring communications and misstating provisions, whether or not a formal written denial was ever issued.
- C) Rebating under 215 ILCS 5/151 concerns returning premium or giving things of value to induce a sale, not the slow handling of claims.
- D) The HMO Act at 215 ILCS 125 regulates health maintenance organizations; the described conduct is a claims-practices violation, not an HMO inducement issue.
Memory hook
Ignore the letter, twist the wording — that's 154.6 territory, not tactics.