first party insurance - Correct Answer insurer makes payment for covered losses directly to the policyholder (first party)
third-party insurance - Correct Answer insurer makes payments on behalf of the policyholder to a claimant (third party)
third party administrators (TPAs) - Correct An...
AIC 300 Questions With Error-Free Solutions
first party insurance - Correct Answer insurer makes payment for covered losses
directly to the policyholder (first party)
third-party insurance - Correct Answer insurer makes payments on behalf of the
policyholder to a claimant (third party)
third party administrators (TPAs) - Correct Answer - an organization that provides
administrative services associated with risk financing and insurance (claims, records,
analysis, etc)
- self insured businesses can handle their own claims or hire a TPA
- P&C insurers have subsidiaries that serve as a TPA
staff claims representatives - Correct Answer a person responsible for investigating,
evaluating, and settling claims (ex: adjusters)
independent adjusters - Correct Answer - specialized claims + field work
- if insurer cant afford claims offices in every state
- some are self employed, some work for adjusting firms
producers - Correct Answer - any kinds of insurance personnel who place insurance
and surety business with insurers and who represent either insurers, insureds, or both
- ex: agents, brokers, sales reps
public adjusters - Correct Answer - outside organization or person hired by an insured
to represent the insured in a claim in exchange for a fee
- if insured is not happy with settlement or it is a complex claim
types of staff claims representatives - Correct Answer inside: exclusively from insurer's
office
field: outside, both in and out of office, handle claims with tasks like investigating scene
of loss, meeting with insureds, etc
line underwriters - Correct Answer work directly with insurance producers and
applicants to evaluate new submissions & renewals
staff underwriters - Correct Answer work with line underwriters to coordinate decisions
about products, pricing, and guidelines
premium audit - Correct Answer methodical examinations of a policyholder's
operations, records, and books of account to determine the actual exposure units and
premium for insurance coverages already provided
why should claim reps be careful with what they say on claims communication? -
Correct Answer claims investigation activities can later be used as evidence in legal
proceedings, any written claims communication can be subpoenaed
, loss ratio - Correct Answer losses & los adjustment expenses / earned premium
measures the performance of claims & uw departments
loss adjustment expenses (LAE) - Correct Answer the expense that an insurer incurs
to investigate, defend, and settle claims according to the terms specified in the policy
short term solution to reduce LAE - Correct Answer reduce expenses by offering
settlement payments instead of paying for investigation and legal defense
3 Quality Measures of a Claims Dept - Correct Answer - best practices
- claims audits
- customer satisfaction data
Quantitative vs Qualitative Audit Factors - Correct Answer quantitative: all come from #
data (ex: timeliness of reports, number of files opened monthly, avg claims settlement
value)
qualitative: based on judgement (realistic reserving, proper releases taken, correct
coverage evaluation, good negotiation skills)
Claims Acknowledgement - Correct Answer claims process begins when an insurer
receives a claim. this advises that the claim was received
Activities in the claims handling process - Correct Answer 1. Acknowledge a claim and
assigning it to a claims rep
2. Identifying the policy
3. Contacting the insured of the insured's representative
4. Investigating and documenting the claim
5. Determining the cause of loss and the loss amount
6. Concluding the claim
First notice of loss (FNOL) - Correct Answer the initial report notifying the insurer of a
claim
some states have time requirement for assignment/acknowledgement of claims
Reservation of rights letter - Correct Answer any significant doubt over coverage
report-only claims - Correct Answer EE fell but no injury yet - just monitoring the
person for anything that may develop
critical aspects of contacting the insured - Correct Answer - Timing and method of
contact
- preparation and initial contact (prepare questions)
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