Download AIC 300 - Claims World (Evolving) Two with complete solutions and more Exams Insurance Economics in PDF only on Docsity!
AIC 300 - Claims World (Evolving) Two
Proper releases taken is a qualitative audit factor; the others are quantitative. - ✔✔Hugo is conducting an audit of a branch office claims operation. He is evaluating timeliness of reports, number of files opened, proper releases taken, and accuracy of data entry. Which one of Hugo's metrics is a qualitative audit factor? Select one: A. Proper releases taken B. Timeliness of reports C. Number of files opened D. Accuracy of data entry D. Line underwriter. Line underwriter. This describes the duties of a line underwriter, rather than a staff underwriter. There is not enough information to determine which line of business is being written. A public underwriter does not exist. 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. - ✔✔Aaron works for a multi- line insurer. He works with insurance producers and applicants to evaluate new business submissions and conduct renewal underwriting. Aaron is a Select one: A. Staff underwriter.
B. Public underwriter. C. Personal lines underwriter. D. Line underwriter. D. Listening. If a claim is complex, or if settlement negotiations are not progressing with the insurer, the insured may hire a public adjuster to protect his or her interests. - ✔✔In which one of the following scenarios is a public adjuster most likely to become involved? Select one: A. An insurer finds it financially unfeasible to hire its own claims staff in a given state. B. An insured is unable to afford legal representation to contest a claim. C. A catastrophic disaster strikes, involving damage to many properties. D. An insured's negotiations with the insurer on a complex claim are not going well. B. TPAs handle claims, keep claims records, and perform statistical analyses. - ✔✔Which one of the following statements regarding third-party administrators (TPAs) is most accurate? Select one: A. TPAs are typically used by businesses that have chosen not to self-insure. B. TPAs handle claims, keep claims records, and perform statistical analyses. C. TPAs are generally found in an insurer's claims department. D. TPAs are employed only by independent adjusting firms.
Claims professionals should first listen carefully to understand what the claimant is saying. - ✔✔The first key to communicating empathetically as a claims professional is Select one: A. A comprehensive understanding of relevant insurance policies. B. Speaking calmly and clearly. C. Being prepared with all documentation relating to the claim. D. Listening. C. Cost to investigate, defend, and settle claims. Cost to investigate, defend, and settle claims. LAE is the expense that an insurer incurs to investigate, defend, and settle claims according to the terms specified in the insurance policy. - ✔✔Mia tracks loss adjustment expense (LAE) as part of her management of the claims department for an insurer. Mia considers LAE to be the Select one: A. Total amount of loss reserves of all claims. B. Paid portion of claims. C. Cost to investigate, defend, and settle claims. D. Total incurred amount of claims.
D. Claim representative. Claim reps collaborate with more than other insurer employees. Many insurers employ a panel of experts that the claims rep can select according to the investigation's needs. - ✔✔In her role with an insurer, Katarina has opportunity to collaborate with not only employees from her company, but also external experts with particular expertise. For example, as part of her investigation, she hired an engineer to conduct a review of a machine that was involved in a personal injury. Katarina is a(n) Select one: A. Medical provider. B. Expert Witness. C. Premium auditor. D. Claim representative. A. Open-ended Open-ended questions can be used to clarify an interviewee's statements. - ✔✔When Mehmet interviews witnesses as part of his claims investigation, he asks different types of questions based on need, such as open-ended, direct, indirect, and leading. Which type of question should Mehmet ask when he wants to set the interviewee at ease and he is looking for explanation or elaboration of details in the interviewee's own words? Select one: A. Open-ended
Select one: A. An insured files a homeowners claim for stolen jewelry. An investigation reveals that the jewelry is still in the insured's possession. B. An investigation reveals that an insured set her own business on fire. C. An insured files a claim for collision damage from a hit and run accident, when in fact he backed into a utility pole. D. A claims rep discovers that their insured's car accident was caused by a road contractor who left equipment lying in the travel lanes of a highway. D. A medical investigation. All bodily injury claims, including workers compensation claims, require a medical investigation. - ✔✔In claims investigation, all bodily injury claims require Select one: A. Statements from all witnesses. B. Multiple claims payments C. An attorney. D. A medical investigation. D. Prepare a list of questions for the insured. Before making initial contact with an insured or claimant, a claims representative should prepare a list of questions for the insured, along with information on how
the claim will be handled. - ✔✔Before making initial contact with an insured or claimant, a claims representative should Select one: A. Research similar losses in the same geographical area. B. Contact company counsel for a reservation of rights letter. C. Prepare an approximate estimate based on similar losses. D. Prepare a list of questions for the insured. C. Recorded statement. A recorded statement is taken by the claims rep over the phone or in person. - ✔✔Carolina is a claim representative handling a liability claim. She is speaking to the claimant over the phone and has informed him that his statements must be true under penalty of perjury. When completed, she sent a transcription of the conversation to the claimant for him to sign before a notary. Carolina has taken a(n) Select one: A. Affidavit. B. Deposition. C. Recorded statement. D. Examination under oath. B. Large loss
B. Average value method The average value method is used most often when their are small variations in loss size for a particular type of claim, and when claims can be concluded quickly.
- ✔✔Which one of the following methods of establishing case reserves is used most often when there are small variations in loss size for a particular type of claim? Select one: A. Individual case method B. Average value method C. Formula method D. Roundtable method A. The insurer's case reserves. To determine whether an insurer typically underreserves or overreserves claims, actuaries compare the insurer's paid losses to the insurer's case reserves. - ✔✔To determine whether an insurer typically underreserves or overreserves claims, actuaries compare the insurer's paid losses to Select one: A. The insurer's case reserves. B. The insurer's profits. C. NAIC model regulations. D. National averages.
D. Pain and suffering Pain and suffering, disfigurement, loss of body function, and emotional distress are all forms of general damages. - ✔✔Samuel was seriously injured in a car accident caused by a drunk driver. His settlement included payments for repairs to his vehicle, medical bills, pain and suffering, and lost wages. Which one of the payments in Samuel's settlement is considered general damages? Select one: A. Medical bills B. Lost wages C. Repairs to his vehicle D. Pain and suffering C. The DICE method. - ✔✔Andrew is a claims representative investigating whether coverage applies to a new claim. To help ensure that he considers every facet of the policy before determining coverage, he might use Select one: A. The CARD method. B. The CARE method. C. The DICE method. D. The DARE method.
C. A homeowners claim due to storm damage. D. A medical malpractice claim. D. Known terrorists and drug traffickers. Failure to check a master list of known terrorists and drug traffickers may result in substantial penalties. - ✔✔The Office of Foreign Assets Control requires claims payors to check payees against a database of Select one: A. Known perpetrators of insurance fraud. B. Policyholders of other insurers. C. Those who have collected a payment for the same loss. D. Known terrorists and drug traffickers. B. By electronic funds transfer. - ✔✔Claims may be paid in any of three ways: by check, by bank transfer or Select one: A. In a direct transfer of goods or services, as with a contractor performing repairs. B. By electronic funds transfer. C. By the issuance of a credit on the premium for the next policy period. D. In cash.
B. Timing settlements effectively Timing settlements effectively can impact how much money a claimant is willing to accept. - ✔✔Riko is an experienced settlement negotiator. When negotiating with claimant representatives, she uses techniques such as timing settlements effectively, enticing a reasonable demand, making concessions cautiously, and leaning on the evaluation. She understands that her current claimant is eager to receive money, so she is delaying the negotiations as long as possible. Which negotiation technique is Riko using? Select one: A. Enticing a reasonable demand B. Timing settlements effectively C. Making concessions cautiously D. Leaning on the evaluation D. Lower courts must follow precedents set by higher courts. Lower courts must follow precedents set by higher courts. This is the principle of stare decisis. - ✔✔Chloe is an insurer defense attorney who is preparing a trial strategy. She has researched a court decision that was made in a similar case and is basing the defense on that precedent. Chloe is relying on the principle of stare decisis, which is that Select one: A. Lower courts must follow precedents set by any other courts. B. Higher courts must follow precedents set by any other courts.
B. A civil violation notice. C. A summons and complaint. D. A settlement offer. C. Motion in limine. This is a pretrial request that certain evidence be excluded from the trial because it is irrelevant or prejudicial. - ✔✔Linnea is an attorney who is preparing to defend an insurer in a workers compensation case. Discovery produced several documents that are being presented as witnesses statements, but the witnesses admit in the statements to not actually seeing the accident. Linnea would like to omit these statements from the proceedings, so she is filing a Select one: A. Motion to dismiss. B. Motion to strike. C. Motion in limine. D. Motion to suppress. C. Using traditional sales techniques A common sales technique is mirroring the behavior of the customer. - ✔✔Claims rep Lily is negotiating a claim settlement with an unrepresented claimant and wishes to smooth the process. She is matching her demeanor, tone, and
mannerisms to those of the claimant. Lily is using which one of the following negotiation techniques? Select one: A. Setting expectations B. Performing a needs analysis C. Using traditional sales techniques D. Collecting extraneous information C. Classification Because Greatview wants to use known characteristics, the analyst would most likely use classification to predict which auto liability claims will go to litigation. - ✔✔Greatview Insurance wants to predict which auto liability claims will most likely go to litigation, so it can assign them to experienced adjusters early in the process. There are certain known indicators of litigation that Greatview wants to use in the data mining process. Which one of the following data mining techniques would Greatview's analyst most likely use? Select one: A. Regression analysis B. Association rule learning C. Classification D. Cluster analysis B. Information gain
D. Classification Classification is a data mining technique an insurer applies when it knows what information it wants to predict. - ✔✔Which one of the following is a data mining technique an insurer applies when it knows what information it wants to predict? Select one: A. Machine learning B. Association rule learning C. Cluster analysis D. Classification C. Understand what a business wants to achieve. - ✔✔The first step in the data mining process is to Select one: A. Collect the data that will be used. B. Select a data mining technique. C. Understand what a business wants to achieve. D. Prepare the data that will be used. A. Risk selection. - ✔✔Generally speaking, the most common application of predictive modeling in insurance occurs in Select one: A. Risk selection.
B. Marketing. C. Reinsurance. D. Claims handling. D. Data science Data science team needs to be engaged as soon as the need for a project arises. - ✔✔Hanna is in IT and works on data analytics projects for an insurer. These projects involve analyzing large amounts of data to help underwriting to select risks and price policies. Hanna knows that collaboration between data science, IT, underwriting, and actuary is critical to the success of these projects. In Hanna's experience, as soon as the need for a data project arises, the key to collaborating effectively is to engage which one of the following teams as soon as possible? Select one: A. Actuary B. IT C. Underwriting D. Data science D. Cleaning. Data should be cleaned as much as possible to eliminate missing or inaccurate information. - ✔✔Part of the continuous cycle of data mining is preparing the data to eliminate missing or inaccurate information. This process is called
