AIC 300 EVALUATION TEST ANSWERS AND
QUESTIONS SET A+
✔✔Indemnify - ✔✔To restore a party who has sustained a loss to the same financial
position that party held before the loss occurred
✔✔Indirect loss - ✔✔A loss that arises as a result of damage to property, other than the
direct loss to the property
✔✔Individual case method - ✔✔A method of setting reserves based on the claim's
circumstances and the claims representative's experience in handling similar claims
✔✔Information gain - ✔✔A measure of the predictive power of one or more attributes
✔✔Insurable interest - ✔✔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
✔✔Insurance fraud - ✔✔Any deliberate deception committed against an insurer or an
insurance producer for the purpose of unwarranted financial gain
✔✔Internet of Things (IoT) - ✔✔A network of objects that transmit data to each other
and to central hubs through the internet
✔✔Leaf node - ✔✔A terminal node of a classification tree that is used to classify an
instance based on its attributes
✔✔Lift - ✔✔In model performance evaluation, the percentage of positive predictions
made by the model divided by the percentage of positive predictions that would be
made in the absence of the model
✔✔Loss adjustment expense (LAE) - ✔✔The expense that an insurer incurs to
investigate, defend, and settle claims according to the terms specified in the insurance
policy
,✔✔Loss ratio - ✔✔A ratio that measures losses and loss adjustment expenses against
earned premiums and that reflects the percentage of premiums being consumed by
losses
✔✔Machine learning - ✔✔Artificial intelligence in which computers continually teach
themselves to make better decisions based on previous results and new data
✔✔Material fact - ✔✔A fact that is significant to a decision or matter at hand
✔✔Misrepresentation - ✔✔A false statement of a material fact on which a party relies
✔✔Motion to dismiss - ✔✔A request that a court terminate an action because of
settlement, voluntary withdrawal, or procedural defect
✔✔Motion in limine - ✔✔A pretrial request that certain evidence be excluded from the
trial
✔✔Motion for summary judgment - ✔✔A pretrial request asking the court to enter a
judgement when no material facts are in dispute and the moving party is entitled to
judgment as a matter of law
✔✔Precision - ✔✔In model performance evaluation, a model's correct positive
predictions divided by its total positive predictions
✔✔Predictive model - ✔✔A model used to predict an unknown outcome by means of a
defined target variable
✔✔Premium Audit - ✔✔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
✔✔Pro rata contribution - ✔✔An approach to other insurance by which the insurers
contribute to the loss payment in proportion to which they contribute to the total amount
of coverage purchased (their limits of liability)
✔✔Producer - ✔✔Any of several kinds of insurance personnel who place insurance and
surety business with insurers and who represent either insurers or insureds, or both
✔✔Public Adjuster - ✔✔An outside organization or person hired by an insured to
represent the insured in a claim in exchange for a fee
, ✔✔Punitive damages (exemplary damages) - ✔✔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
✔✔Recursively - ✔✔Successively applying a model
✔✔Reserve - ✔✔The amount the insurer estimates and sets aside to pay on an existing
claim
✔✔Root node - ✔✔The first node in a classification tree
✔✔Roundtable method - ✔✔A method of setting reserves by using the consensus of
two or more claims personnel who have independently evaluated the claims file
✔✔Service of process - ✔✔The delivery of a summons and complaint to a defendant by
an authorized person
✔✔Soft fraud, or opportunity fraud - ✔✔Fraud that occurs when a legitimate claim is
exaggerated
✔✔Special 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
✔✔Special Investigation unit (SIU) - ✔✔A division set up to investigate suspicious
claims, premium fraud, or application fraud
✔✔Staged Accident - ✔✔An accident deliberately caused by a person who intends to
feign injury and collect on the ensuing claim
✔✔Stare decisis - ✔✔The principle that lower courts must follow precedents set by
higher courts
✔✔Statute of limitations - ✔✔A law that stipulates the length of time after an even
during which legal proceedings (such as a lawsuit or criminal charges may be initiated
✔✔Summons - ✔✔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
✔✔Telematics - ✔✔The use of technological devices to transmit data via wireless
communication and GPS tracking
QUESTIONS SET A+
✔✔Indemnify - ✔✔To restore a party who has sustained a loss to the same financial
position that party held before the loss occurred
✔✔Indirect loss - ✔✔A loss that arises as a result of damage to property, other than the
direct loss to the property
✔✔Individual case method - ✔✔A method of setting reserves based on the claim's
circumstances and the claims representative's experience in handling similar claims
✔✔Information gain - ✔✔A measure of the predictive power of one or more attributes
✔✔Insurable interest - ✔✔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
✔✔Insurance fraud - ✔✔Any deliberate deception committed against an insurer or an
insurance producer for the purpose of unwarranted financial gain
✔✔Internet of Things (IoT) - ✔✔A network of objects that transmit data to each other
and to central hubs through the internet
✔✔Leaf node - ✔✔A terminal node of a classification tree that is used to classify an
instance based on its attributes
✔✔Lift - ✔✔In model performance evaluation, the percentage of positive predictions
made by the model divided by the percentage of positive predictions that would be
made in the absence of the model
✔✔Loss adjustment expense (LAE) - ✔✔The expense that an insurer incurs to
investigate, defend, and settle claims according to the terms specified in the insurance
policy
,✔✔Loss ratio - ✔✔A ratio that measures losses and loss adjustment expenses against
earned premiums and that reflects the percentage of premiums being consumed by
losses
✔✔Machine learning - ✔✔Artificial intelligence in which computers continually teach
themselves to make better decisions based on previous results and new data
✔✔Material fact - ✔✔A fact that is significant to a decision or matter at hand
✔✔Misrepresentation - ✔✔A false statement of a material fact on which a party relies
✔✔Motion to dismiss - ✔✔A request that a court terminate an action because of
settlement, voluntary withdrawal, or procedural defect
✔✔Motion in limine - ✔✔A pretrial request that certain evidence be excluded from the
trial
✔✔Motion for summary judgment - ✔✔A pretrial request asking the court to enter a
judgement when no material facts are in dispute and the moving party is entitled to
judgment as a matter of law
✔✔Precision - ✔✔In model performance evaluation, a model's correct positive
predictions divided by its total positive predictions
✔✔Predictive model - ✔✔A model used to predict an unknown outcome by means of a
defined target variable
✔✔Premium Audit - ✔✔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
✔✔Pro rata contribution - ✔✔An approach to other insurance by which the insurers
contribute to the loss payment in proportion to which they contribute to the total amount
of coverage purchased (their limits of liability)
✔✔Producer - ✔✔Any of several kinds of insurance personnel who place insurance and
surety business with insurers and who represent either insurers or insureds, or both
✔✔Public Adjuster - ✔✔An outside organization or person hired by an insured to
represent the insured in a claim in exchange for a fee
, ✔✔Punitive damages (exemplary damages) - ✔✔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
✔✔Recursively - ✔✔Successively applying a model
✔✔Reserve - ✔✔The amount the insurer estimates and sets aside to pay on an existing
claim
✔✔Root node - ✔✔The first node in a classification tree
✔✔Roundtable method - ✔✔A method of setting reserves by using the consensus of
two or more claims personnel who have independently evaluated the claims file
✔✔Service of process - ✔✔The delivery of a summons and complaint to a defendant by
an authorized person
✔✔Soft fraud, or opportunity fraud - ✔✔Fraud that occurs when a legitimate claim is
exaggerated
✔✔Special 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
✔✔Special Investigation unit (SIU) - ✔✔A division set up to investigate suspicious
claims, premium fraud, or application fraud
✔✔Staged Accident - ✔✔An accident deliberately caused by a person who intends to
feign injury and collect on the ensuing claim
✔✔Stare decisis - ✔✔The principle that lower courts must follow precedents set by
higher courts
✔✔Statute of limitations - ✔✔A law that stipulates the length of time after an even
during which legal proceedings (such as a lawsuit or criminal charges may be initiated
✔✔Summons - ✔✔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
✔✔Telematics - ✔✔The use of technological devices to transmit data via wireless
communication and GPS tracking
