22. The California Code of Regulations governing claim settlement practices prohibits all of the following acts of unfair discrimination EXCEPT denial of claim based on
Answer: C
Denial of claim based on reckless behavior is permitted.
The California Code of Regulations allows for the denial of claims based on reckless behavior, as this type of conduct is not considered unfair discrimination within the context of claim settlement practices.
A) gender.
Denial of claims based on gender is strictly prohibited under the California Code of Regulations. This is considered a form of unfair discrimination, as it violates principles of equality and non-discrimination.
B) income.
Refusing to settle claims based on a person's income also constitutes unfair discrimination according to California regulations. Such practices would unfairly disadvantage individuals based on their financial status, which is not permissible.
C) reckless behavior.
Denial of claims based on reckless behavior is not classified as unfair discrimination. The regulations permit insurers to deny claims if the insured has engaged in conduct that is deemed reckless, as this is within the bounds of responsible risk management.
D) a physical handicap.
Claims cannot be denied based on a physical handicap as it constitutes unfair discrimination. The regulations protect individuals with disabilities from discrimination in the claims process, ensuring equitable treatment.
Conclusion
The correct answer, C, is justified because it reflects the permissible grounds for claim denial under California regulations, distinguishing it from other options that represent prohibited discriminatory practices. All other choices demonstrate forms of unfair discrimination that are explicitly forbidden, reinforcing the importance of equitable treatment in claim settlements.