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AIC 300 EXAM 2025 | ALL QUESTIONS AND CORRECT
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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 ---------CORRECT ANSWER-----------------A. Proper releases taken Proper releases taken is a qualitative audit factor; the others are quantitative. 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. ---------CORRECT ANSWER-----------------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.
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. ---------CORRECT ANSWER-----------------D. Listening. Claims professionals should first listen carefully to understand what the claimant is saying. 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. ---------CORRECT ANSWER--------------- --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. 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.
C. Debatable reasonable basis defense. D. Statute of limitations defense. ---------CORRECT ANSWER----------------- C. Debatable reasonable basis defense. The insurer may establish that defense that it had a reasonable basis for questioning whether a claim was covered. One of Julio's expectations as a claims representative is good-faith claims handling. He keeps insureds informed about the claim because they have that expectation and because they are most likely to make a complaint about bad-faith claim handling. He also wishes to participate in the defense and in discussions about the possibility of settlement. For these reasons, Julio Select one: A. Conducts fair evaluations. B. Maintains complete and accurate documentation. C. Maintains regular and prompt communication. D. Conducts good-faith negotiation. ---------CORRECT ANSWER-------------- ---C. Maintains regular and prompt communication. Communicating with all parties to a claim is a crucial aspect of good- faith claims handling and resolution. Which one of the following statements regarding state versions of the NAIC model act is correct? Select one: A. Only insureds may bring lawsuits against insurers. B. Only claimants may bring lawsuits against insurers. C. Both insureds and claimants may bring lawsuits against insurers. D. Some states allow insureds and claimants to bring lawsuits against insurers, while others allow only insureds. ---------CORRECT ANSWER------ -----------D. Some states allow insureds and claimants to bring lawsuits against insurers, while others allow only insureds.
Tobias is a claims representative who understands the importance of good- faith claims handling, including fair evaluation, good-faith negotiation, complete and accurate documentation, and timely contact with all parties to a claim. Which one of Tobias' good-faith claims handling practices helps his employer because the parties will be more likely to remember details of the loss accurately? Select one: A. Fair evaluation B. Complete and accurate documentation C. Timely contact with all parties to a claim D. Good-faith negotiation ---------CORRECT ANSWER-----------------C. Timely contact with all parties to a claim Timely contact with all parties to a claim helps ensure that parties will be more likely to remember details of the loss accurately. For an excess liability claim to be filed, a final judgment or settlement must have been entered against the insured, and Select one: A. The insured must have paid that judgment. B. The amount of the judgment must be in excess of the insured's policy limit. C. Evidence of bad faith must be produced. D. The insurer must have determined that coverage does not apply. --------- CORRECT ANSWER-----------------B. The amount of the judgment must be in excess of the insured's policy limit. For an excess liability claim to be filed, a final judgment or settlement must have been entered against the insured, and the amount of the judgment must be in excess of the insured's policy limit. The insured is not required to have paid the judgment before bringing suit. Which one of the following best describes the term 'professionalism' as it relates to claims professionals? Select one: A. The behaviors necessary to implement an ethical decision
Luke runs his business out of a store front in a commercial building. After a fire destroyed part of the building, Luke made a claim for damages and received a settlement check from the property insurer. This necessarily means that Luke Select one: A. Has business interruption coverage. B. Is named in the policy declarations or an endorsement. C. Has an insurable interest in the damaged property. D. Is the owner of the building. ---------CORRECT ANSWER-----------------B. Is named in the policy declarations or an endorsement. An individual may have an insurable interest in a building, but not be considered an insured under the policy because the person's name is not listed in the declarations or on an endorsement. Rodrigo manages a claims department for an insurer and uses loss ratio as a measure of the department's performance. Rodrigo calculates loss ratio as Select one: A. Losses divided by written premium. B. Losses and LAE divided by earned premium. C. Losses and LAE divided by written premium. D. Losses divided by earned premium. ---------CORRECT ANSWER---------- -------B. Losses and LAE divided by earned premium. Losses and LAE divided by earned premium. Loss ratio measures losses and loss adjustment expenses against earned premium and reflects the percentage of premiums being consumed by losses. In liability claims, the claims rep will require an authorization from the injured party to Select one: A. Investigate the claim. B. Obtain medical records.
C. Contact the insured. D. Issue a partial claim settlement. ---------CORRECT ANSWER--------------- --B. Obtain medical records. In liability claims, the claims rep will require an authorization from the injured party to obtain medical records. Insurers usually send denial letters Select one: A. By email to ensure prompt receipt by the insured. B. By certified mail with a return receipt requested. C. By overnight courier. D. By registered mail. ---------CORRECT ANSWER-----------------B. By certified mail with a return receipt requested. Some will also send a copy via regular mail in case the certified letter is not accepted. As methods of communication evolve, it's important for claims professionals to remember that any written claims communication may be Select one: A. Replaced with verbal communication. B. Misinterpreted. C. Edited later. D. Subpoenaed. ---------CORRECT ANSWER-----------------D. Subpoenaed. Any written claims communication may be subpoenaed. 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.
Charlotte is handling a new claim and she has set the initial reserves at $1,000,000. She has been asked to complete an internal report summarizing all the file status information for distribution to management and updated as more information is received. The report Charlotte is completing is most likely a Select one: A. Status report. B. Summarized report. C. Preliminary report. D. Large loss report. ---------CORRECT ANSWER-----------------D. Large loss report. Most insurers have guidelines outlining when and under what circumstances large loss reports should be prepared. In which one of the following scenarios is the right of subrogation most likely to be employed by the insurer? 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. --- ------CORRECT ANSWER-----------------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. The right of subrogation allows an insurer to recover payment from a negligent third party. 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. ---------CORRECT ANSWER-----------------D. A medical investigation. All bodily injury claims, including workers compensation claims, require a medical investigation. 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. ---------CORRECT ANSWER-- ---------------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. 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. ---------CORRECT ANSWER-----------------C. Recorded statement. A recorded statement is taken by the claims rep over the phone or in person.
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. 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. ---------CORRECT ANSWER-----------------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. 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 ---------CORRECT ANSWER-----------------D. Pain and suffering Pain and suffering, disfigurement, loss of body function, and emotional distress are all forms of general damages. 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. ---------CORRECT ANSWER-----------------C. The DICE method. Mitsuki was severely injured when the safety latch on an amusement park ride failed and she was thrown from the ride. In her lawsuit with the amusement park, Mitsuki was awarded payment for pain and suffering, emotional distress, disfigurement, and loss of earnings. Which one of Mitsuki's awards is considered special damages? Select one: A. Loss of earnings B. Emotional distress C. Pain and suffering D. Disfigurement ---------CORRECT ANSWER-----------------A. Loss of earnings Loss of earnings, medical bills, and lost property payments are all considered special damages. Although most policies are occurrence forms, covering claims that occur during the policy period, some are claims-made forms. Which one of the following types of loss is most likely to involve a claims-made form? Select one: A. An automotive collision claim. B. A homeowners liability claim due to a slip and fall. C. A homeowners claim due to storm damage. D. A medical malpractice claim. ---------CORRECT ANSWER----------------- D. A medical malpractice claim. Claims-made forms are most often used for environmental, medical malpractice and directors and officers' policies.
Timing settlements effectively can impact how much money a claimant is willing to accept. 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. C. Higher courts must follow precedents set by lower courts. D. Lower courts must follow precedents set by higher courts. --------- CORRECT ANSWER-----------------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. Kira, a claims representative, receives a summons and complaint from an insured. In reviewing the facts, she has doubts that the insured's applicable policy will provide coverage. She should work with counsel and request a managerial review in order to issue Select one: A. A reservation of rights letter. B. An excess letter. C. A countersuit. D. A claim denial. ---------CORRECT ANSWER-----------------A. A reservation of rights letter. The insurer will issue a reservation of rights letter stating that it will provide defense only until it can establish that there is no coverage. The claims litigation process begins with the receipt of Select one:
A. A notice of claim. B. A civil violation notice. C. A summons and complaint. D. A settlement offer. ---------CORRECT ANSWER-----------------C. A summons and complaint. The claims litigation process begins with the receipt of a summons and complaint announcing the initiation of a lawsuit. 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. ---------CORRECT ANSWER-----------------C. Motion in limine. This is a pretrial request that certain evidence be excluded from the trial because it is irrelevant or prejudicial. 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 ---------CORRECT ANSWER------------- ----C. Using traditional sales techniques A common sales technique is mirroring the behavior of the customer.
Rin works for an insurer designing and using techniques to process large amounts of data from various sources and providing knowledge based on the analysis of that data. Rin is a(n) Select one: A. Actuary. B. Data scientist. C. IT professional. D. Ratemaker. ---------CORRECT ANSWER-----------------B. Data scientist. Data science involves experimenting with data using rapidly evolving methods to learn and provide solutions to complex problems. 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 ---------CORRECT ANSWER-----------------D. Classification Classification is a data mining technique an insurer applies when it knows what information it wants to predict. 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. ---------CORRECT ANSWER------------ -----C. Understand what a business wants to achieve. 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. ---------CORRECT ANSWER-----------------A. Risk selection. 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 ---------CORRECT ANSWER-----------------D. Data science Data science team needs to be engaged as soon as the need for a project arises. Part of the continuous cycle of data mining is preparing the data to eliminate missing or inaccurate information. This process is called Select one: A. Machine learning. B. Parsing. C. Predictive modeling. D. Cleaning. ---------CORRECT ANSWER-----------------D. Cleaning. Data should be cleaned as much as possible to eliminate missing or inaccurate information.
