Under California's Fair Claims Settlement Practices Regulations, after receiving a notice of claim an insurer must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under California's Fair Claims Settlement Practices Regulations, an insurer that receives a notice of claim must promptly acknowledge receipt of the claim. This acknowledgment begins the insurer's duty to respond to and process the claim in good faith. It lets the claimant know that the claim has been received and is being handled, and it triggers the insurer's obligations to investigate and communicate during the claims process. The regulations do not require the insurer to deny a claim within forty-eight hours, to forward every claim to the state guaranty fund, or to request a police report in every case. Acknowledgment is the threshold step that starts the fair claims handling process.
Why the other options are wrong
- B) No forty-eight-hour denial requirement exists under the regulations. After acknowledging receipt, the insurer must promptly investigate the claim and respond on its merits; an immediate denial deadline is not part of the fair claims framework.
- C) Guaranty funds pay covered claims when an insurer becomes insolvent; they are not involved in ordinary claims against a solvent insurer. Forwarding every claim to the fund is not a required response.
- D) A police report is required only where it is relevant to the claim, not in every case. Demanding a police report universally would impose an unnecessary burden and is not what the regulations require.
Memory hook
First step after a claim notice: promptly acknowledge that you got it.