What action must an insurer take if they determine liability for a claim but fail to settle it within the set timeframe?

When an insurer determines liability for a claim but does not settle it within the specified timeframe, the most appropriate action to take is to make an offer of settlement. This step is crucial because it shows the insurer's acknowledgment of liability and demonstrates their willingness to resolve the claim. By making a settlement offer, the insurer engages in the claims process effectively, potentially avoiding legal repercussions and fostering goodwill with the claimant.

Making an offer of settlement reflects the insurer's obligation to act in good faith, ensuring that the claimant is given an opportunity to resolve the matter amicably. This approach can also help mitigate any frustrations the claimant might have due to the delay in settlement.

While notifying the claimant of the delay or providing written justification might be necessary in some contexts, the essential action needed in this scenario is to actively work toward resolution by extending a settlement offer. Paying additional penalties or simply delaying communication does not help in resolving the situation, nor do they align with the best practices for managing claims efficiently.