State RegulationsAZ specificDifficulty 3/5
An Arizona insurer pays one claim late after a clerical breakdown, then corrects its procedures and pays subsequent claims on time. Under A.R.S. 20-461, is this an unfair claims settlement practice?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-461 uses a 'general business practice' standard: committing an act once, as a matter of isolated occurrence, is not a violation of the unfair claims practices article. The conduct must be frequent or repeated enough to reflect the insurer's general business practice. A.A.C. R20-6-801 details the specific claims practices to which this standard applies.
Why the other options are wrong
- A) A late payment alone does not violate A.R.S. 20-461 without a general business practice pattern.
- B) Harm to the claimant does not by itself establish the frequency standard of A.R.S. 20-461.
- C) A complaint is not the trigger; the analysis turns on whether the conduct reflects a general business practice.
Memory hook
One slip is not a violation — 20-461 punishes the pattern, not the incident.