State RegulationsPA specificDifficulty 1/5
Under 40 P.S. § 753(A)(8), how must an insurer pay claims under an individual accident and health policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The time-of-payment provision, 40 P.S. § 753(A)(8), requires lump-sum losses to be paid immediately upon receipt of due proof of loss, while periodic benefits must be paid not less frequently than monthly. The structure matches payment form to loss type: a one-time indemnity is paid at once, and income-replacement benefits flow on a monthly rhythm the insured can live on.
Why the other options are wrong
- A) Lump-sum losses are payable immediately, not stretched into installment plans; the monthly minimum applies only to periodic benefits.
- C) Claim payment is a contractual duty enforced under 40 P.S. § 753(A)(8); the Pennsylvania Insurance Department regulates practices but does not adjudicate each claim before payment.
- D) Payment timing is fixed by statute, not left to the insurer's choice, and immediate payment of lump-sum losses is the rule.
Memory hook
Lump sums now, periodic checks monthly — no dawdling on either clock.