What is prohibited regarding claims settlements based on altered applications?

Settling claims based on altered applications is a significant ethical and legal violation within the insurance industry. When an adjuster proceeds with a settlement without the insured's knowledge or consent, it undermines the trust and transparency essential to the insurance process. Insurance contracts are fundamentally agreements between the insurer and the insured, and both parties must have full awareness and agreement on any settlement terms.

This prohibition is particularly important because it ensures that the insured retains control over their claims process and is informed about any decisions that impact their financial recovery. Such actions as settling without knowledge can lead to disputes, mistrust, and potential legal consequences for the adjuster and the insurance company.

While the other options describe actions that might also negatively impact the insured or violate industry standards, they do not directly address the explicit ethical breach of settling claims without the insured's agreement. This specific provision aims to protect the rights and interests of the insured in the claims process.