Georgia Adjuster Practice Test

Which type of insurance is specifically NOT covered by the NAIC Model Unfair Claim Settlement Practice Act?

1. Health insurance

2. Surety bonding

3. Dwelling insurance

4. Automobile insurance

The correct answer is: Surety bonding

The NAIC Model Unfair Claim Settlement Practice Act was designed to establish standards for the fair settlement of claims made by policyholders. It primarily aims to ensure that insurers act in good faith and handle claims accurately and efficiently. Specific types of insurance are addressed by this act, but surety bonding is not included. Surety bonds serve as a guarantee that specific obligations will be fulfilled, primarily in business contexts, rather than providing coverage for direct losses like typical insurance policies. Therefore, it operates under different legal and regulatory frameworks. The absence of surety bonding in the act indicates that while the NAIC focuses on direct insurance practices, surety bonding does not fall under its purview, which distinguishes it from other types of insurance such as health, dwelling, and automobile insurance that are covered by the act.