Which of the following practices is illegal in the context of claims handling?

In the context of claims handling, delaying claim payments without justification is illegal because it violates the ethical obligation insurers have to honor their contractual obligations to policyholders. Insurers are required to process claims in a timely manner when the claims are valid and supported by the necessary documentation. Delays that lack reasonable grounds can lead to financial hardship for policyholders who rely on timely payments to cover losses. This practice undermines the trust between insurance providers and consumers and goes against regulatory standards that seek to protect policyholders' interests.

On the other hand, providing thorough investigations of claims, promptly settling valid claims, and documenting reasons for claim denials are all considered best practices. Providing thorough investigations ensures that claims are handled fairly and accurately. Promptly settling valid claims is part of the insurer's duty to its policyholders, and documenting reasons for claims denials helps maintain transparency and accountability in the claims process. These practices contribute positively to the overall integrity of the insurance system.