State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Fair Claims regulations (Section 2695.3), an insurer handling a claim must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 2695.3 requires insurers to maintain complete claim files that document all transactions and communications relating to each claim. A well-documented file shows that the insurer acknowledged, investigated, and handled the claim promptly and fairly, and it provides the basis for regulatory review when a claim is questioned.
Why the other options are wrong
- B) Claim files must be maintained, not destroyed, so the handling can be examined.
- C) Denials must be documented with reasons; undocumented denials violate the recordkeeping and notice requirements.
- D) Claim records belong to the insurer's file system, although claimants receive required notices.
Memory hook
Paper every step: the claim file is the insurer's report card on fair handling.