PSI Life Exam Practice Test 2026 – Complete Preparation Resource

Failure to pay claims within 90 days is not classified as an unfair claims settlement practice because insurance regulations often outline specific time frames for how long an insurer can take to process and respond to claims. While a delay beyond a reasonable time frame could raise concerns, the 90-day period serves as a standard benchmark in many jurisdictions, allowing companies to conduct thorough investigations when necessary. Therefore, failing to pay within this timeframe does not automatically indicate an unfair practice unless it is shown that there is an unreasonable or unjustified delay.

In contrast, delayed claim processing, unjustified denial of claims, and refusing to provide information on claims are generally viewed as unfair practices because they undermine the principle of good faith that underpins insurance contracts. Each of these actions can lead to significant disadvantages for the policyholder, indicating a lack of diligence or transparency from the insurer.