Which of the following exemplifies an unfair claims practice?

Failing to effectuate prompt, fair, and equitable settlements clearly exemplifies an unfair claims practice because it undermines the expectations and rights of policyholders. Insurance companies have an obligation to act in good faith when processing claims and to ensure that their customers receive timely and fair compensation for their covered losses. Delays or inequitable treatment can lead to financial hardships for policyholders who rely on their insurance for support during difficult times.

In contrast, offering special premiums to new customers, completing claims processing in a timely manner, and providing claim settlement options are all practices that do not violate the principles of fair treatment in the insurance industry. These options can enhance customer service and satisfaction, aligning with industry standards that promote fairness and promptness in dealing with claims. Understanding these distinctions emphasizes the ethical and legal responsibilities insurers have toward their clients.