North Carolina Adjuster Practice Exam

In which of the following scenarios is the insurance company not engaging in an Unfair Settlement Practice?

1. An insurance agent fails to review each provision of the policy before accepting payment

2. A policyholder files a fraudulent claim against their auto insurance

3. An insurer provides a refund to a policyholder who cancels their policy

4. An agent submits a claim on behalf of the insured without consent

The correct answer is: An insurance agent fails to review each provision of the policy before accepting payment

The scenario where the insurance company is not engaging in an Unfair Settlement Practice is the one where an insurance agent fails to review each provision of the policy before accepting payment. This situation primarily involves the agent's failure to perform due diligence but does not directly impact how the insurer handles claims or settlements afterward. Unfair Settlement Practices are typically associated with actions taken by an insurance company that deny, delay, or underpay legitimate claims, or that operate in ways that could be construed as misleading or deceptive to policyholders. The agent’s oversight in not reviewing policy provisions does not fall into that category, as it is more about administrative procedure rather than the treatment of claims. In the other scenarios: - Filing a fraudulent claim is an action taken by the policyholder, which does illustrate a situation that can harm the insurer but doesn't represent the insurer engaging in unfair practices. - Providing a refund for a canceled policy is a normal business practice and reflects the insurer operating fairly in accordance with policy terms. - Submitting a claim without the consent of the insured can lead to significant issues regarding the legitimacy of the claim and the insurer's responsibility, which could lead to settlement concerns and potential breaches of the contract terms. Thus, the first scenario stands out as the only