What is required for an insurance company to settle a claim or suit?

For an insurance company to settle a claim or suit, written consent from the insured is crucial. This requirement is in place to ensure that the insured party agrees to the terms of the settlement and protects their interests in the matter. Written consent also provides a clear record of agreement, which can help mitigate misunderstandings or disputes regarding the settlement later on. It aligns with the fiduciary duty of the insurance company to handle claims in a manner that respects the policyholder's rights and choices.

In many cases, settling a claim can involve significant implications for the policyholder, including potential effects on their coverage, future premium rates, and their relationship with the insurance company. Therefore, requiring this written consent ensures that the insured is fully informed and actively involved in decisions affecting their policy and coverage.

The other choices, while they may appear plausible in certain contexts, do not meet the standard requirements typically set by insurance policies and regulations. For instance, prior verbal consent may not provide the documented support needed, while the assertion that no consent is necessary for small claims lacks consideration of the legal obligations under the insurance contract. Similarly, while approval from the insurance regulator can be relevant in various compliance matters, it is not a direct requirement for the company to settle claims, which primarily hinges