AIC 300 - Claims In An Evolving World: Questions With
Comprehensive Solutions
To restore a party who has sustained a loss to the same financial position that
party held before the loss occurred. Correct Ans - Indemnify
An organization that provides administrative services associated with risk
financing and insurance. Correct Ans - Third-party administrator (TPA)
A person responsible for investigating, evaluating, and settling claims.
Correct Ans - Claims representative
Any of several kinds of insurance personnel who place insurance and surety
business with insurers and who represent either insurers or insureds, or both.
Correct Ans - Producer
An outside organization or person hired by an insured to represent the
insured in a claim in exchange for a fee. Correct Ans - Public adjuster
Methodical examination of a policyholder's operations, records, and books of
account to determine the actual exposure units and premium for insurance
coverages already provided. Correct Ans - Premium audit
A ratio that measures losses and loss adjustment expenses against earned
premiums and that reflects the percentage of premiums being consumed by
losses. Correct Ans - Loss ratio
The expense that an insurer incurs to investigate, defend, and settle claims
according to the terms specified in the insurance policy. Correct Ans -
Loss adjustment expense (LAE)
The initial report notifying the insurer of a claim. Correct Ans - First
notice of loss (FNOL)
The amount the insurer estimates and sets aside to pay on an existing claim.
Correct Ans - Reserve
,A method of setting reserves based on the claim's circumstances and the
claims representative's experience in handling similar claims. Correct Ans -
Individual case method
A method of setting reserves by using the consensus of two or more claims
personnel who have independently evaluated the claims file. Correct Ans -
Roundtable method
A case reserving method that establishes a predetermined dollar amount of
reserve for each claim as it is reported. Correct Ans - Average value
method
A method of setting claim reserves by using a mathematical formula.
Correct Ans - Formula method
A method of setting reserves with a software application that estimates losses
and loss adjustment expenses. Correct Ans - Expert system method
A reduction in the value of property that results directly and often
immediately from damage to that property. Correct Ans - Direct loss
A loss that arises as a result of damage to property, other than the direct loss
to the property. Correct Ans - Indirect loss
An approach to other insurance by which the insurers contribute to the loss
payment in the proportion to which they contribute to the total amount of
coverage purchased (their limits of liability). Correct Ans - Pro rata
contribution
An interest in the subject of an insurance policy that is not unduly remote and
that would cause the interested party to suffer financial loss if an insured
event occurred. Correct Ans - Insurable interest
A payment awarded by a court to punish a defendant for a reckless, malicious,
or deceitful act to deter similar conduct; the award need not bear any relation
to a party's actual damages. Correct Ans - Punitive damages (exemplary
damages)
,A payment awarded by a court to reimburse a victim for actual harm.
Correct Ans - Compensatory damages
A form of compensatory damages that awards a sum of money for specific,
identifiable expenses associated with the injured person's loss, such as
medical expenses or lost wages. Correct Ans - Special damages
A monetary award to compensate a victim for losses, such as pain and
suffering, that do not involve specific, measurable expenses. Correct Ans -
General damages
A clause that requires the insured to carry insurance equal to at least a
specified percentage of the insured property's value. Correct Ans -
Coinsurance clause
A pretrial exchange of all relevant information between the plaintiff and
defendant. Correct Ans - Discovery
A document that directs a sheriff or another court-designated officer to notify
the defendant named in the lawsuit that a lawsuit has been started and that
the defendant has a specified amount of time to answer the complaint.
Correct Ans - Summons
The allegations made by a plaintiff in a lawsuit. Correct Ans - Complaint
The delivery of a summons and complaint to a defendant by an authorized
person. Correct Ans - Service of process
A claim made in the complaint by the plaintiff, specifying what the plaintiff
expects to prove to obtain a judgment against the defendant. Correct Ans -
Allegation
A set of rules established to ensure that civil actions and procedures move
through the United States district courts as quickly as possible. Correct Ans
- Federal Rules of Civil Procedure
, A law that stipulates the length of time after an event during which legal
proceedings (such as a lawsuit or criminal charges) may be initiated.
Correct Ans - Statute of limitations
The principle that lower courts must follow precedents set by higher courts.
Correct Ans - Stare decisis
A request that a court terminate an action because of settlement, voluntary
withdrawal, or procedural defect. Correct Ans - Motion to dismiss
A pretrial request asking the court to enter a judgment when no material facts
are in dispute and the moving party is entitled to judgment as a matter of law.
Correct Ans - Motion for summary judgment
A pretrial request that certain evidence be excluded from the trial. Correct
Ans - Motion in limine
Sets of data that are too large to be gathered and analyzed by traditional
methods. Correct Ans - Big data
A network of objects that transmit data to each other and to central hubs
through the internet. Correct Ans - Internet of Things (IoT)
The use of technological devices to transmit data via wireless communication
and GPS tracking. Correct Ans - Telematics
A sensor attached to or embedded in clothing and accessories. Correct Ans
- Wearable sensor tag
The analysis of large amounts of data to find new relationships and patterns
that will assist in developing business solutions. Correct Ans - Data mining
Sets of data that are too large to be gathered and analyzed by traditional
methods. Correct Ans - Big data
An operational sequence used to solve mathematical problems and to create
computer programs. Correct Ans - Algorithm
Comprehensive Solutions
To restore a party who has sustained a loss to the same financial position that
party held before the loss occurred. Correct Ans - Indemnify
An organization that provides administrative services associated with risk
financing and insurance. Correct Ans - Third-party administrator (TPA)
A person responsible for investigating, evaluating, and settling claims.
Correct Ans - Claims representative
Any of several kinds of insurance personnel who place insurance and surety
business with insurers and who represent either insurers or insureds, or both.
Correct Ans - Producer
An outside organization or person hired by an insured to represent the
insured in a claim in exchange for a fee. Correct Ans - Public adjuster
Methodical examination of a policyholder's operations, records, and books of
account to determine the actual exposure units and premium for insurance
coverages already provided. Correct Ans - Premium audit
A ratio that measures losses and loss adjustment expenses against earned
premiums and that reflects the percentage of premiums being consumed by
losses. Correct Ans - Loss ratio
The expense that an insurer incurs to investigate, defend, and settle claims
according to the terms specified in the insurance policy. Correct Ans -
Loss adjustment expense (LAE)
The initial report notifying the insurer of a claim. Correct Ans - First
notice of loss (FNOL)
The amount the insurer estimates and sets aside to pay on an existing claim.
Correct Ans - Reserve
,A method of setting reserves based on the claim's circumstances and the
claims representative's experience in handling similar claims. Correct Ans -
Individual case method
A method of setting reserves by using the consensus of two or more claims
personnel who have independently evaluated the claims file. Correct Ans -
Roundtable method
A case reserving method that establishes a predetermined dollar amount of
reserve for each claim as it is reported. Correct Ans - Average value
method
A method of setting claim reserves by using a mathematical formula.
Correct Ans - Formula method
A method of setting reserves with a software application that estimates losses
and loss adjustment expenses. Correct Ans - Expert system method
A reduction in the value of property that results directly and often
immediately from damage to that property. Correct Ans - Direct loss
A loss that arises as a result of damage to property, other than the direct loss
to the property. Correct Ans - Indirect loss
An approach to other insurance by which the insurers contribute to the loss
payment in the proportion to which they contribute to the total amount of
coverage purchased (their limits of liability). Correct Ans - Pro rata
contribution
An interest in the subject of an insurance policy that is not unduly remote and
that would cause the interested party to suffer financial loss if an insured
event occurred. Correct Ans - Insurable interest
A payment awarded by a court to punish a defendant for a reckless, malicious,
or deceitful act to deter similar conduct; the award need not bear any relation
to a party's actual damages. Correct Ans - Punitive damages (exemplary
damages)
,A payment awarded by a court to reimburse a victim for actual harm.
Correct Ans - Compensatory damages
A form of compensatory damages that awards a sum of money for specific,
identifiable expenses associated with the injured person's loss, such as
medical expenses or lost wages. Correct Ans - Special damages
A monetary award to compensate a victim for losses, such as pain and
suffering, that do not involve specific, measurable expenses. Correct Ans -
General damages
A clause that requires the insured to carry insurance equal to at least a
specified percentage of the insured property's value. Correct Ans -
Coinsurance clause
A pretrial exchange of all relevant information between the plaintiff and
defendant. Correct Ans - Discovery
A document that directs a sheriff or another court-designated officer to notify
the defendant named in the lawsuit that a lawsuit has been started and that
the defendant has a specified amount of time to answer the complaint.
Correct Ans - Summons
The allegations made by a plaintiff in a lawsuit. Correct Ans - Complaint
The delivery of a summons and complaint to a defendant by an authorized
person. Correct Ans - Service of process
A claim made in the complaint by the plaintiff, specifying what the plaintiff
expects to prove to obtain a judgment against the defendant. Correct Ans -
Allegation
A set of rules established to ensure that civil actions and procedures move
through the United States district courts as quickly as possible. Correct Ans
- Federal Rules of Civil Procedure
, A law that stipulates the length of time after an event during which legal
proceedings (such as a lawsuit or criminal charges) may be initiated.
Correct Ans - Statute of limitations
The principle that lower courts must follow precedents set by higher courts.
Correct Ans - Stare decisis
A request that a court terminate an action because of settlement, voluntary
withdrawal, or procedural defect. Correct Ans - Motion to dismiss
A pretrial request asking the court to enter a judgment when no material facts
are in dispute and the moving party is entitled to judgment as a matter of law.
Correct Ans - Motion for summary judgment
A pretrial request that certain evidence be excluded from the trial. Correct
Ans - Motion in limine
Sets of data that are too large to be gathered and analyzed by traditional
methods. Correct Ans - Big data
A network of objects that transmit data to each other and to central hubs
through the internet. Correct Ans - Internet of Things (IoT)
The use of technological devices to transmit data via wireless communication
and GPS tracking. Correct Ans - Telematics
A sensor attached to or embedded in clothing and accessories. Correct Ans
- Wearable sensor tag
The analysis of large amounts of data to find new relationships and patterns
that will assist in developing business solutions. Correct Ans - Data mining
Sets of data that are too large to be gathered and analyzed by traditional
methods. Correct Ans - Big data
An operational sequence used to solve mathematical problems and to create
computer programs. Correct Ans - Algorithm
