What Model #900 Lists as Unfair Claims Settlement Practices

If your claim seems to have vanished into a black hole — no updates, no denial, no check — you might be experiencing what state law calls an unfair claims settlement practice. This guide breaks down what that model law actually lists as prohibited conduct, and walks through how an unexplained delay in investigating your claim fits the pattern regulators are watching for.

What Model #900 Is and Why It Matters

Model #900 is a template law drafted by the National Association of Insurance Commissioners for states to adopt, originally put in place in 1990 and amended in 1991. Section 4 of the model act lists 14 specific acts, lettered A through N, that constitute unfair claims practices once they are committed under the conditions described in Section 3. That structure — an enumerated list of prohibited insurer behaviors paired with a legal threshold — is what turns everyday customer-service complaints into a formal, checkable standard. Knowing this structure helps you recognize whether what your insurer is doing might cross a line, even before you talk to a regulator or attorney.

The Threshold: When Does Conduct Actually Count?

The listed acts only become unfair claims practices when they are committed under the conditions described in Section 3 of the act — generally meaning the insurer either did it flagrantly and with conscious disregard of the law, or did it as part of a general business practice, rather than as an isolated error. This distinction matters for you as a policyholder: a one-time slow response might just be a service failure worth complaining about, while a repeated pattern is closer to what the Section 3 threshold describes. If you are documenting a problem, it helps to note whether you have seen the same kind of stonewalling more than once, or whether other policyholders have reported similar treatment.

Anatomy of the Prohibited Acts List (Section 4)

• Letter A — Misrepresentation: Knowingly misrepresenting to claimants or insureds relevant facts or policy provisions relating to the coverage at issue.
• Letter B — Failure to acknowledge: Failing to acknowledge with reasonable promptness pertinent communications from claimants or insureds with respect to claims arising under its policies.
• Letter C — No reasonable standards: Failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims arising under its policies.

Why Silent Delay Is a Textbook Example

The reader question behind this guide asks specifically about delay, and it is one of the clearest illustrations of how the enumerated list plays out in practice. Section 4 of the model act prohibits failing to acknowledge claim communications promptly and failing to adopt reasonable standards for prompt investigation, among other things. A companion NAIC model regulation, adopted separately under the authority of the Unfair Claims Settlement Practices Act, puts concrete numbers on what "prompt" is supposed to mean in states that adopt it: insurers must acknowledge a claim within 15 days unless payment is made within that period, and, for a first-party claimant, must say within 21 days of receiving the proofs of loss if they need more time to decide (and explain why), and if the investigation is still open after that, must send an explanatory letter every 45 days. Those timeframes are not literally written into Model #900's own text — they come from the separate claims-handling regulation, sometimes called Model #902, and individual states can set different day counts. But together, the two models illustrate the same point: an insurer that goes quiet on your claim for months, with no acknowledgment and no explanation, is behaving in exactly the way the unfair-claims framework was built to discourage.

Worked Example: Timing a Delay Against the Benchmarks

If you believe an insurer is unfairly delaying or denying your claim, NAIC advises contacting your state Department of Insurance, which can investigate and take enforcement action against the company. Under the companion model regulation's benchmarks, adopted in states that follow it, the insurer should have acknowledged your claim within 15 days unless it had already paid the claim within that window. If it needed more time to decide on your proofs of loss, it should have told you why within 21 days after receiving those proofs of loss, not 21 days from when you filed. And if the investigation is still open 45 days after the initial notification, it owes you a status letter, and another one every 45 days after that for as long as the investigation stays open. That means, counting from the initial notification, status letters would be due at day 45 and again at day 90 if the investigation remained open that long.

• acknowledgment: 15
• first follow up: 45
• second follow up: 45
• Formula: acknowledgment+first follow up+second follow up
• Result: 105

A hypothetical timeline showing how silent delay compares to the benchmarks in the companion claims-handling model regulation.

Worked example

• acknowledge days: 15
• first followup days: 45
• second followup days: 45
• Formula: acknowledge days + first followup days + second followup days
• Result: 105

What Regulators Can Actually Do About It

If a state insurance commissioner finds, after a hearing, that an insurer engaged in an unfair claims practice, the model act authorizes a fine of up to $1,000 per violation, capped at $100,000 in total. If the violation was flagrant and showed conscious disregard of the law, the penalty can rise to as much as $25,000 per violation, capped at $250,000 in aggregate. These are the figures in the 1991 amended model text, and states that adopted a modified version of the act may use different numbers, so it is worth checking your own state's statute for the exact penalty schedule. If you believe your insurer is unfairly delaying or denying your claim, you can contact your state Department of Insurance, which can investigate the issue and take enforcement action against the company.

What To Do If You Think You're Experiencing This

1. Write down every date: when you filed the claim, when (if ever) you got an acknowledgment, and any deadlines the insurer missed.
2. Ask the insurer in writing why the claim has not been resolved and request a written timeline for next steps.
3. Save every letter, email and call log related to the claim, including any explanation the insurer does or does not give for the delay.
4. If you get no clear answer, file a complaint with your state Department of Insurance, which can investigate whether your insurer unfairly delayed or denied the claim and take enforcement action if it finds a violation.

Key Takeaways

• Model #900 is the NAIC's Unfair Claims Settlement Practices Act, a template law drafted for state adoption, originally adopted in 1990 and amended in 1991.
• Section 4 lists 14 specific acts, lettered A through N, that count as unfair claims practices once the Section 3 threshold — flagrant disregard or a general business practice — is met.
• A companion model regulation gives concrete benchmarks for first-party property/casualty claimants in states that adopt it — 15 days to acknowledge a claim unless payment is made within that period, 21 days after proofs of loss to explain any delay, and a status letter every 45 days after that if the investigation is still incomplete.

Frequently Asked Questions

Is a single delayed claim enough to trigger a penalty under the act?

Not necessarily. The enumerated acts in Section 4 only become unfair claims practices when committed under the Section 3 conditions, meaning flagrant and conscious disregard of the law or as part of a general business practice, rather than a single isolated incident.

What are the specific day counts my insurer has to follow?

The companion NAIC claims-handling model regulation sets benchmarks of 15 days to acknowledge a claim unless payment is made within that period, 21 days for the insurer to tell a first-party claimant why more time is needed after receiving proofs of loss, and a status letter every 45 days after that while the investigation continues. These numbers come from that separate regulation rather than from Model #900 itself, and states can adopt different day counts, so you would need to check your own state's version to know the exact deadlines that apply to you.

Who do I actually contact if I think my insurer is doing this?

Your state Department of Insurance is the right first stop; the NAIC advises consumers who believe their insurer is unfairly delaying or denying a claim, or otherwise not honoring the policy or state law, to contact their DOI, which can investigate and take enforcement action against the company.

Are there other unfair acts besides delay that I should watch for?

Yes. The enumerated list also covers things like knowingly misrepresenting policy provisions or relevant facts to you, and failing to adopt reasonable standards for prompt investigation and settlement generally, not just the acknowledgment and timing issues discussed above.

Sources

• content.naic.org
• content.naic.org
• content.naic.org