AIC 300|194 QUESTIONS AND ANSWERS

Indemnify - ️️To restore a party who has sustained a loss to the same financial position that party held before the loss occurred. Third-party administrator (TPA) - ️️An organization that provides administrative services associated with risk financing and insurance. Claims representative - ️️A person responsible for investigating, evaluating, and settling claims. Public adjuster - ️️An outside organization or person hired by an insured to represent the insured in a claim in exchange for a fee. 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. Quantitative Audit Factors - ️️Timeliness of reports, reserving and payments Qualitative Audit Factors - ️️Realistic reserving, accurate evaluation of insured's liability and follow-up on subrogation opportunity 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. 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.