What would be considered an unfair claims settlement practice?

The option that represents an unfair claims settlement practice is when a claims adjuster advises the insured that if the claim goes to arbitration, they would probably receive less than the current offer. This behavior can be seen as an attempt to unduly influence the decision-making of the insured regarding their claim, creating undue pressure to accept the insurer's offer as opposed to seeking potential arbitration. Such actions can undermine the policyholder's rights and can be perceived as coercive, which is against the principles of fair dealing expected in claims handling.

The other options do not constitute unfair claims settlement practices. Delaying the settlement of a claim for investigation allows the insurer to properly assess the validity of the claim, which is a legitimate practice as long as it is within a reasonable time frame. Requesting a signed proof of loss after the insured has already provided verbal notification is also a standard procedure that helps ensure documentation is in order. Similarly, asking the insured to provide sworn statements concerning the facts of the claim is typical in many cases, as it serves to clarify the circumstances and support the claims process.