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California company staff adjusters Questions and Correct Answers (Verified Answers) Plus Rationales 2025
Typology: Exams
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16.Which document outlines the duties of staff adjusters in California? The California Insurance Code It provides the regulatory framework for all claims handling activities. 17.How often must insurance companies in California review their claims practices? Periodically as required by CDI This ensures compliance with fair claims settlement regulations. 18.Staff adjusters in California must act in accordance with: The Fair Claims Settlement Practices Regulations These regulations govern how all claims, including those handled by staff adjusters, must be processed. 19.What is considered an unfair claims practice in California? Denying a claim without a reasonable investigation This violates state insurance laws and can result in penalties. 20.What must staff adjusters maintain during the claims process? Complete documentation Proper records are essential for transparency and regulatory compliance. 21.A staff adjuster who handles auto insurance claims in California must: Comply with California Auto Claims regulations They must follow specific timelines and communication standards for auto claims. 22.Which agency investigates complaints about company staff adjusters? California Department of Insurance The CDI handles complaints against all insurance claims professionals.
23.Staff adjusters working in health insurance must also comply with: HIPAA regulations They must protect personal health information during the claims process. 24.Which of the following is true about licensing reciprocity for staff adjusters in California? It does not apply Reciprocity is for licensed adjusters; staff adjusters are exempt from licensure. 25.What may result from mishandling a claim in California? Regulatory penalties for the insurer The insurer is held responsible for violations committed by staff adjusters. 26.Which of the following must be provided to a claimant promptly in California? Explanation of Benefits or denial reasons Fair Claims Practices require timely communication and documentation. 27.Can a staff adjuster offer legal advice in California? No Only licensed attorneys may provide legal advice. 28.Staff adjusters can only work on claims for: The insurer that employs them They are not permitted to handle claims for other insurers or independently. 29.Staff adjusters are considered: Employees They receive salaries and benefits directly from the insurance company.
37.Which is NOT required of a company staff adjuster in California? State adjuster license Only independent adjusters need to be licensed. 38.How should disputes over claims be handled by staff adjusters? Escalated according to company protocol Internal processes must be followed to resolve claim disputes. 39.What ethical principle should guide staff adjusters? Good faith and fair dealing They must treat claimants fairly and honestly. 40.A staff adjuster discovers a possible fraud. What should they do? Report it to their supervisor or SIU Suspected fraud must be referred for formal investigation. 41.Staff adjusters must avoid: Conflicts of interest This ensures unbiased handling of claims. 42.Are staff adjusters allowed to negotiate settlements? Yes They are authorized to negotiate claims on behalf of their employer. 43.What must be disclosed to the claimant during settlement? The basis for the offer Claimants have the right to understand how the settlement was calculated.
44.Which is an example of bad faith claims handling? Delaying payment without justification Unreasonable delay is a violation of state insurance law. 45.Who oversees training for staff adjusters in California? The insurance company It is the company's responsibility to provide adequate training. 46.Can a company staff adjuster work in another state without a license? Only if that state also exempts staff adjusters Licensing rules vary by state, and not all states exempt staff adjusters. 47.Are company staff adjusters covered by Errors and Omissions (E&O) insurance? Usually under the company’s policy Most insurers carry E&O coverage that includes employee adjusters. 48.A claimant complains about a staff adjuster’s conduct. Who investigates? The California Department of Insurance CDI handles complaints against all insurance personnel. 49.Which regulation outlines time frames for responses to claimants? California Code of Regulations, Title 10, Chapter 5 This section includes the Fair Claims Settlement Practices. 50.What is the maximum penalty for unfair claims practices by an insurer in California? $10,000 per violation Under the Insurance Code, serious violations can carry significant penalties.
57.What must a staff adjuster do upon discovering missing documentation for a claim? Request the documentation promptly from the claimant or provider Prompt action helps maintain claim timelines and compliance. 58.Which of the following is NOT an allowed method of communication for a staff adjuster? Public social media platforms All communications must be secure and professional. 59.What is the purpose of documenting all claim activity? To create a clear, auditable trail of claim handling Proper documentation supports regulatory compliance and internal accountability. 60.When dealing with a represented claimant, staff adjusters must: Communicate through the claimant’s attorney Direct communication with a represented party may be prohibited. 61.If a claimant threatens legal action, the staff adjuster should: Notify the supervisor and refer the matter to legal counsel This ensures the company’s legal team can respond appropriately. 62.What role does a staff adjuster play in subrogation? They gather documentation to support recovery efforts Staff adjusters assist in the investigation, but the legal or recovery team handles the subrogation claim.
63.A claim involving suspected arson should be: Referred to the Special Investigations Unit (SIU) SIUs handle potentially fraudulent claims such as arson or staged losses. 64.What is the consequence if a staff adjuster repeatedly delays claim payments without justification? The insurer may face fines or disciplinary action CDI may penalize the insurer for ongoing regulatory violations. 65.A staff adjuster handling workers’ compensation claims must also follow: California Labor Code regulations Workers' comp claims are subject to specific labor and insurance laws. 66.If a claimant disputes the settlement amount, the staff adjuster should: Explain the valuation process and provide supporting documents Transparency helps resolve disputes and build trust. 67.Who may audit a company’s claims files for regulatory compliance in California? California Department of Insurance CDI performs periodic audits and reviews of insurer practices. 68.A staff adjuster’s notes in the claim file should be: Objective, professional, and factual Bias or emotional language may harm the claim record and company liability. 69.Staff adjusters should base settlement offers on: Policy terms and applicable evidence
76.Claims involving multiple parties require staff adjusters to: Communicate with each party equitably and document interactions Equal and fair treatment is essential in multi-party claims. 77.A claim involving environmental damage should be escalated to: The environmental claims unit or legal department These claims involve complex laws and require specialized handling. 78.Staff adjusters are expected to: Act in good faith during the entire claim process This is a core legal and ethical requirement. 79.Which is an acceptable reason for claim denial in California? Loss is excluded by policy language Denials must be based on clear policy terms and supporting evidence. 80.Which of the following must a denial letter include? Specific reason and applicable policy provision This is required under California claims regulations. 81.A staff adjuster should do what before closing a claim? Ensure all documentation is complete and payments processed Incomplete files can trigger regulatory issues. 82.When must staff adjusters notify a claimant of a claim closure? Upon completion of final payment or denial This provides closure and complies with communication regulations. 83.If an insurer fails to respond to CDI inquiries about a staff adjuster, it may result in:
Administrative penalties against the insurer Insurers are accountable for cooperating with the Department. 84.Staff adjusters may settle claims: Within the limits of their authority Exceeding settlement authority can lead to disciplinary action. 85.Adjusters must update claim files with: All communications and claim activities Comprehensive records are required for internal and external review. 86.A staff adjuster may be disqualified from handling a claim if: They have a conflict of interest Claims must be handled impartially to protect all parties involved. 87.Which of the following is NOT a valid defense for delayed claim settlement? Short staffing in the adjuster department Regulatory deadlines are not waived due to internal resource issues. 88.An adjuster who alters claim records improperly is guilty of: Fraudulent conduct Tampering with records is a serious ethical and legal violation. 89.What action must be taken if a claimant reports a loss caused by a third party? Document the details for possible subrogation This supports future recovery from the responsible party.
97.The staff adjuster’s priority when handling a new claim should be: Acknowledging the claim and beginning investigation Timely response is a fundamental compliance requirement. 98.What is an example of a low-value claim requiring prompt handling? Windshield damage claim Minor claims must still be handled promptly and fairly. 99.If an adjuster receives conflicting statements, they should: Document and investigate discrepancies Objective fact-finding is required before a determination is made.