Georgia Adjuster Practice Test

Which type of insurance does the NAIC Model Unfair Claim Settlement Practice Act apply to?

1. Workers' compensation

2. Surety bonding

3. Dwelling insurance

4. Health insurance

The correct answer is: Dwelling insurance

The NAIC Model Unfair Claim Settlement Practice Act specifically applies to property and casualty insurance, which includes dwelling insurance. This act was established to promote fair and prompt claim handling by insurance companies and to provide a framework that ensures fair treatment for policyholders when claims are made. Dwelling insurance is included as it encompasses coverage for dwellings and associated structures, making it directly relevant to the provisions of the NAIC Model Act, which seeks to create standards for how claims should be handled in this area. The other types of insurance mentioned, such as workers' compensation, surety bonding, and health insurance, are generally governed by different regulatory frameworks and practices. Workers' compensation has its own set of rules due to its unique nature related to employee injury and workplace safety. Surety bonding is more related to financial guarantees rather than traditional insurance claims. Health insurance likewise operates under specific regulations distinct from those for property and casualty insurance, including the Affordable Care Act provisions and patient protection laws, making these options less applicable to the context of the NAIC Model Unfair Claim Settlement Practice Act.