Which of these is NOT an Unfair Claims Settlement Practice?

Settling a claim by arbitration is a legitimate and accepted practice within insurance and financial services. Arbitration is often included as a clause within insurance contracts, where disputes are resolved outside of court by an impartial third party. This mechanism can actually provide a quicker resolution for both parties compared to traditional litigation processes.

On the other hand, the other choices involve behaviors that are deemed unfair and are often regulated against. Inducing unnecessary delays in payment compromises the integrity of the claims process, creating unfair hardship for the claimant. Failing to promptly acknowledge communications can lead to frustration and potential financial loss for the claimant, as it hinders their ability to effectively manage their situation. Refusing to pay valid claims outright not only undermines trust between the insurer and the insured but also violates legal obligations that insurers have to honor legitimate claims. Therefore, settling claims through arbitration is a standard practice, while the others represent unfair treatment of claimants.