What are 'unfair claims settlement practices' by an insurer?
Last updated: 2026-07-11 · Educational content; not legal advice.
Short answer
RA 10607 (the Amended Insurance Code) Section 247 bars insurers from refusing, without just cause, to pay or settle claims, and lists specific 'unfair claim settlement practices.' These include misrepresenting pertinent policy provisions relating to a coverage at issue; failing to act with reasonable promptness on communications about claims; failing to attempt in good faith a prompt, fair, and equitable settlement once liability is reasonably clear; and compelling policyholders to file suit to recover amounts due by offering, without justifiable reason, substantially less than what is ultimately recovered. When an insurer commits such acts with a frequency indicating a general business practice, it violates Section 247 — evidence the Insurance Commission can weigh.
The practical value of Section 247 is that it names the delay-and-lowball tactics you may be experiencing and makes them a regulatory violation, not just an annoyance. Pair it with the payment deadlines and interest rules: Section 249 (non-life proceeds within 30 days of proof of loss), Section 248 (life death claims within 60 days), and Section 250 (interest at twice the Monetary Board ceiling for unjustified delay). Cite the specific Section 247 conduct in your written demand and in any Insurance Commission complaint, with your dated evidence of the insurer's behavior.
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Frequently asked
Give me concrete examples of an unfair practice.
Under RA 10607 Section 247: misstating what your policy actually covers to talk you out of a claim; ignoring or sitting on your claim communications; not making a genuine effort to settle promptly and fairly once it is clear the insurer is liable; and forcing you to sue by lowballing an offer far below what you would win in court. Each is named conduct you can cite.
Do I have to prove the insurer does this to everyone?
For a full Section 247 'general business practice' finding, the law looks at frequency — and the Commissioner's complaint history for that insurer is admissible. But you do not need industry-wide proof to complain: document your own case in detail, and the pattern across complainants is something the Insurance Commission can assemble.
What do I do with this?
Put the specific Section 247 conduct in a written demand letter, attach your dated timeline and correspondence, and demand prompt payment plus Section 250 interest for the delay. If the insurer still won't settle, file with the Insurance Commission (which can adjudicate claims up to ₱5,000,000 under Section 439) and reference the same conduct.
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Your rights as a policyholder or HMO member — what to do when an insurance claim is denied or delayed, how long an insurer has to pay a valid claim and the interest it owes for unreasonable delay (RA 10607, the Amended Insurance Code), the 2-year incontestability clause on life policies, HMO coverage and pre-existing-condition denials (now regulated by the Insurance Commission under EO 192 s.2015), what CTPL motor insurance covers and the no-fault indemnity, premium grace periods and lapsed policies, cash surrender value when you cancel, and how to file a complaint with the Insurance Commission.