Washington Life Producer Practice Exam 2026 – Complete Prep Guide

Withholding payment without proper investigation is indeed an example of an unfair claims practice. This action violates the ethical standards and regulations governing insurance claims because it denies policyholders the timely and fair access to the benefits they have paid for. Insurers are required to conduct thorough and timely investigations into claims to ensure that decisions are justified and based on the facts surrounding the claim. Failing to do so not only undermines the trust placed in the insurance system but may also result in financial harm to the claimant, as they may face delays or denials of legitimate claims.

This practice disregards the duty of the insurer to treat their customers fairly and squarely violates the principle of good faith that should govern the insurer-policyholder relationship.