AIC 300 (230 QUESTIONS) ANSWERED CORRECTLY TO SCORE A+

AIC 300 (230 QUESTIONS) ANSWERED CORRECTLY TO SCORE A+ Which one of the following is a data mining technique an insurer applies when it knows what - Answer-Classification 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? - Answer-Data science 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? - Answer-Classification The first step in the data mining process is to - Answer-Understand what a business wants to achieve Carla is investigating a claim for a stolen car. The insured provided a copy of the police report, but she notices that the account in the police report differs from the insured's version of events. At this point, Carla should - Answer-Continue with her investigation Benjamin is with the SIU department of an insurer. His company developed technology to identify patterns related to fraudulent claims activity. He is using a program to analyze claims data to identify similarities or connections that might indicate fraud. Benjamin is utilizing - Answer-Data mining Soft fraud occurs when a claim is exaggerated and is also referred to as - Answer-Opportunity fraud As a claims representative, Beatrice is on the front lines for protecting her employer from insurance fraud. Beatrice should understand that insurance fraud - Answer-Costs roughly $40 billion per year, excluding health insurance Larissa is an auto claim adjuster. Traditionally, she has relied on police reports and witness testimony in her decision making. Recent technological developments give her access to the driver's driving habits, including acceleration, speed, and braking. This data available to Larissa is known as - Answer-Telematics Soft fraud, also called opportunity fraud, occurs when - Answer-A legitimate claim is exaggerated Which one of the following best describes the term 'professionalism' as it relates to claims professionals? - Answer-The behaviors necessary to implement an ethical decision 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 - Answer-Maintains regular and prompt communication For an excess liability claim to be filed, a final judgment or settlement must have been entered against the insured, and - Answer-The amount of the judgment must be in excess of the insured's policy limit 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? - Answer-Timely contact with all parties to a claim Which one of the following statements regarding state versions of the NAIC model act is correct? - Answer-Some states allow insureds and claimants to bring lawsuits against insurers, while others allow only insureds Not long after Valteri issued a denial and closed the claim, the insured sued for coverage and alleged bad-faith claim handling against the insurer. Valteri was able to demonstrate for his superiors that he had made a good-faith investigation and determined that the claim was not covered by the policy. The insurer maintains that Valteri had reasonable justification in fact for denying the claim. The insurer is employing the - Answer-Debatable reasonable basis defense Ella sued her insurer and alleged bad-faith claim handling after the insurer settled a claim against her that Ella thought should have been denied. As a result of the settlement, Ella's premium increased. In her suit, Ella claimed that the insurer rushed the investigation and did not take all of her facts into consideration in her defense. While the court found that Ella's argument had merit, it did not award her the full value because it found that Ella had not provided her information to the insurer in a timely manner. The insurer used the defense of - Answer-Comparative negligence An insurer has received a claim related to an accident involving a hoverboard, and an investigation is needed to process the claim. However, the company doesn't have any claims representatives who are knowledgeable about handling hoverboard claims. What type of claims professional should the company hire to help with this investigation? - Answer-Independent adjuster Natalie is a claims representative attempting to settle a complex claim for an insured. Unfortunately, the insured is dissatisfied with the way settlement negotiations are progressing. Whom might the insured hire to make sure that his interests are protected? - Answer-Public adjuster Leila was recently hired as a claims representative for an insurer. How will Leila help underwriters, and how will underwriters rely on Leila? - Answer-It helps underwriters by ensuring that claims are paid fairly and according to their respective policy. The Claims Department relies on underwriters for thorough, accurate data about the circumstances under which coverage was written As a claims representative, who might Geoffrey collaborate with in addition to other employees of the insurer? - Answer-Geoffrey might collaborate with an expert to evaluate the cause or value of a loss, investigate the possibility of fraud by an insured or a third-party claimant, or provide legal advice. What sets the tone for the claims adjustment process? - Answer-Claims rep's initial contact with the insure When do claims reps have the greatest opportunity to positively influence others? - Answer-During catastrophes, when their help is needed most What are a loss ratio and a loss adjustment expense (LAE)? - Answer-A loss ratio is a ratio that measures losses and loss adjustment expenses against earned premiums and that reflects the percentage of premiums being consumed by losses. LAE is the expense that an insurer incurs to investigate, defend, and settle claims according to the terms specified in the insurance policy. An insurer's management team is evaluating the organization's financial wellbeing and wants to determine whether the Claims Department is functioning properly, whether the Underwriting Department is selecting appropriate loss exposures, and whether the Actuarial Department is pricing the insurance products correctly. What is the profitability measure that can help management make these determinations? - Answer-The loss ratio can help the management team make these determinations. The loss ratio compares an insurer's losses and LAE to its collected premiums and reveals the percentage of premiums being consumed by losses. What is the first activity in the claims handling process? - Answer-Acknowledging receipt of the claim What must a claims representative determine after confirming that a policy was in force on the date of the loss? - Answer-Whether the loss occurred within the policy period, coverage exists under the policy for the type of loss reported, and the insured followed the policy's terms and conditions. How do recorded statements and examinations under oath differ? - Answer-An examination under oath is more formal than a recorded statement. Recorded statements are often taken by claims representatives, typically by telephone. Examinations under oath are usually performed by an attorney for the insurer at the insurer's office or a court reporter's office. What qualities do effective statements exhibit? - Answer-• Coherence—The statement follows a logical sequence • Completeness—The statement is thorough • Objectivity—The statement contains facts relevant to the loss expressed in the interviewee's own words Jenny is in an automobile accident and files a claim. What information should the claims representative consider when investigating the accident scene? - Answer-Tire tracks, curves in the road, and objects or conditions that may interfere with a driver's view or cause an accident (such as a pothole) Freja files a workers compensation claim. What type of an investigation should the claims representative conduct and why? - Answer-Medical investigation. This helps the claims representative determine the costs of medical treatment, the expected duration of treatment and disability, the need for rehabilitation, and the suitability of medical care for the type of injuries the claimant suffered. While working on an auto collision claim, Lois, a claims representative, adds a remark regarding gender in the claims file. Is this remark appropriate? - Answer-Remarks regarding the gender of claimants or insureds are not appropriate for inclusion in a claims file. Linnea, a new claims representative, wants to know what elements should be reflected in claims file status notes? What would you tell her? - Answer-• Clear, concise, and accurate information • Timely claims handling • A fair and balanced investigation that considers the insured's and insurer's interests • Objective comments about the insurer, insured, or other parties associated with the claim • A thorough good-faith investigation Why is establishing and maintaining adequate reserves important? - Answer-If a claims representative doesn't set accurate case reserves, it could affect the financial health of the insurer for which he or she works. In extreme cases, inaccurate reserving could cause insolvency. What is the formula method of setting claim reserves? - Answer-With the formula method of setting claim reserves, a formula for setting a reserve is determined by the insurer and is automatically created for the claims rep based on the facts of a claim. What is stairstepping a reserve? - Answer-A claims rep may set a modest initial reserve but then raise the reserve by a few thousand dollars to issue payments. Later, the reserve is increased again when more bills arrive. Who does an insurance policy typically cover? - Answer-Some policies cover only insureds named or listed in the policy. However, most policies define "insured" to cover additional persons, such as family members of the named insured who reside in the home What should Kolby, a claims representative, do to determine whether a cause of loss is covered? - Answer-Kolby should thoroughly investigate all the facts concerning the loss and apply them to the language in all the policy provisions. He must also carefully read the exclusions to find possible coverage exceptions and analyze policy definitions. Eduardo is the insured in a liability claim. What are the damages for which he may be liable? - Answer-Punitive and compensatory damages. Punitive damages punish a wrongdoer for a reckless, malicious, or deceitful act with the purpose of deterring similar conduct. Compensatory damages include special damages and general damages. What must a claims representative do before making any payments? - Answer-The claims representative must verify all the policy limits applicable to a loss before making any payments to ensure that payment falls within the available limits of coverage.