AIC 300 - Claims in an Evolving World Latest Update 2024 Version 155 Questions and Verified Correct Answers Guaranteed Success A claims representative should have the ability to persuade or influence
- Claimants.
- Insureds.
- Supervisors.
D. Claimants, insureds, supervisors and others. - CORRECT ANSWER: D. Claimants,
insureds, supervisors and others.The impression that claims reps make on claimants, insureds, and others reflects either favorably or unfavorably on the insurer.
Adam manages a claims department for an insurer. He measures the department's performance by best practices, claims audits, customer satisfaction data, and loss ratio.Which one of Adam's measures refers to a system of identified internal practices that claims representatives perform to produce superior performance?
- Loss ratio
- Best practices
- Customer satisfaction data
D. Claims audits - CORRECT ANSWER: B. Best practices
Best practices generally refers to a system of identified internal practices that are shared with claims reps and produce superior performance.
Alva works for an international, multi-line insurer. She helps her company to manage risk selection by working with other underwriters and coordinating decisions about products, pricing, and guidelines. Alva is a
- Master underwriter.
- Chief Underwriting Officer.
- Staff underwriter.
D. Line underwriter. - CORRECT ANSWER: C. Staff underwriter.
This describes the duties of a staff underwriter. There is not enough information to determine which line of business is being written. Line underwriters evaluate new submissions and perform renewal underwriting, usually by working directly with insurance producers and applicants. Staff underwriters, meanwhile, manage risk selection by working with line underwriters and coordinating decisions about products, pricing and guidelines.
Among the methods used to pay claims are the issuance of checks and bank drafts.The main difference between the two is that
- Only bank drafts may be used for claim payments in excess of $10,000.
- With a bank draft, the bank must verify that the insurer has authorized payment.
- With a check, the bank must verify that the insurer has authorized payment. 1 / 4
- Only checks may be used for claim payments in excess of $10,000. - CORRECT
ANSWER: B. With a bank draft, the bank must verify that the insurer has authorized payment.With a bank draft, the bank must verify that the insurer has authorized payment before disbursing funds.
An insurer that finds it economically impractical to establish a claims office in a given state is likely to use which one of the following to perform the claims handling function?
- Producers
- Third-party administrators
- Public adjusters
D. Independent adjusters - CORRECT ANSWER: D. Independent adjusters
Insurers may contract with independent adjusters to handle claims in strategic locations.
Antonia has a general liability policy with a self-insured retention of $50,000. The policy has an occurrence limit of $250,000 and an aggregate limit of $500,000. She had submitted one prior claim this policy term for which $100,000 was paid by the insurer.How much will Antonia's insurer pay on a subsequent claim under the same policy period that is valued at $400,000?
A. $200,000
B. $250,000
C. $400,000
D. $500,000 - CORRECT ANSWER: B. $250,000
$250,000. After the SIR limit had been reached, the insurer was obligated to pay up to the occurrence limit.
As a claims representative, Joshua frequently requests proofs of loss and affidavits, and conducts examinations under oath and recorded statements. Which one of Joshua's sworn statements is administered by the insurer's attorney at the office of the insurer, attorney, or court reporter?
- Affadivit
- Recorded statement
- Proof of loss
D. Examination under oath - CORRECT ANSWER: D. Examination under oath
Examination under oath is administered by the attorney for the insurer after notice is issued to appear at the office of the insurer, attorney, or court reporter.
As a part of the first contact with an insured on a property damage claim, a claims representative may provide a blank
- Reservation of rights form.
- Proof of loss form.
- Nondisclosure form.
D. First notice of loss form. - CORRECT ANSWER: B. Proof of loss form.
A claims representative may provide a blank proof of loss form and any necessary written instructions so the insured can document the claim.
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Attorney Grace is representing an insurer in a case and is preparing a pretrial motion.Her argument is that the court has no jurisdiction for the cause of action brought by the claimant. Grace is preparing a
- Motion to dismiss.
- Motion for summary judgment.
- Motion to suppress.
D. Motion in limine. - CORRECT ANSWER: A. Motion to dismiss.
This is a request that a court terminate an action because of settlement, voluntary withdrawal, or procedural defect.
Because a full or partial denial of a claim may result in a bad-faith lawsuit, a claims representative should
- Seek a supervisor's approval before denying a claim.
- Make every effort to approve each claim.
- Check with the reinsurer before denying a claim.
- Carefully document their reasoning for denial. - CORRECT ANSWER: D. Carefully
document their reasoning for denial.Claims reps should carefully document their reason(s) for fully or partially denying a claim.
Bettina's apartment is burglarized and several items are stolen. In filing her claim, she tells her insurer that her stolen television was both newer and larger than it actually was.This constitutes which one of the following types of fraud?
- False claim
- Misrepresentation
- Concealment
D. Soft fraud - CORRECT ANSWER: D. Soft fraud
In soft fraud, a legitimate loss occurs but the value of that loss is exaggerated.
Ciara is going to college with the goal of working as a data scientist for an insurer. She will need a strong foundation in mathematics and statistics, computer programming, domain knowledge, and data science. Which one of Ciara's skills will require her to understand the insurance profession to which the data is being applied?
- Domain knowledge
- Data science.
- Mathematics and statistics
D. Computer programming - CORRECT ANSWER: A. Domain knowledge
Domain knowledge is the understanding of the discipline, profession, or activity to which the data is being applied.
Claims rep Miguel is conducting a settlement with a claimant. He constructs his first offer so that the claimant will likely find it undesirable. This becomes the basis of comparison for the second offer that he makes. Miguel understands that people
- Feel empowered when given a choice.
- Are naturally suspicious of an initial offer.
- Are easier to manipulate with choices. 3 / 4
D. Will typically accept a second offer. - CORRECT ANSWER: A. Feel empowered
when given a choice.This is the basis of the choicing technique.
Conor is a claims representative whose supervisor is reviewing his claim status notes.The supervisor took exception with one of Conor's notes, which read, "The claimant is obviously lying because his account of how the accident happened keeps changing." The supervisor should advise Conor that this statement is inappropriate because it is
not:
- Objective
- Concise
- Accurate
D. Clear - CORRECT ANSWER: A. Objective
Claim status notes should contain objective comments about the parties, and this statement is subjective.
Cristobal is negotiating a settlement with a claimant attorney in a workers compensation claim. The attorney has requested 200 weeks of benefits, which was more than Cristobal was hoping to pay. Cristobal countered with an offer to pay the 200 weeks if the worker would sign an agreement to resign his position and to never reopen the claim. Cristobal's negotiation strategy is an example of
- Enticing a reasonable demand.
- Making concessions cautiously.
- Leaning on the evaluation.
D. Timing settlements effectively. - CORRECT ANSWER: B. Making concessions
cautiously.Claims reps should only make concessions for specific reasons, the other party has made a concession, or a concession would allow the claim to be settled more quickly
DaJuan, a claims representative, sets a low case reserve for a seemingly simple claim.A few weeks later it becomes apparent that the initial reserve was too low, and he increases it in order to issue payments. More bills related to the claim arrive a few months later, and he increases the reserve again. This process is known as
- Stairstepping.
- Incremental reserving.
- Reopening.
D. Readjusting. - CORRECT ANSWER: A. Stairstepping.
The process of repeatedly increasing the reserve for a claim is called stairstepping.
Daniel is a claims supervisor. One of his responsibilities is to review claim files to monitor the performance of the adjusters and to provide guidance. He also realizes that claims department peers review files as part of roundtable discussions and that state insurance department representatives might review files as part of market conduct studies. For these reasons, Daniel makes sure his direct reports
- Conduct good-faith negotiations.
- Maintain complete and accurate documentation.
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