AIC 300 EXAMINATION QUESTIONS AND 100%
VERIFIED ANSWERS
In model performance evaluation, a model's correct predictions divided by its total predictions -
Accuracy
A person who uses mathematical methods to analyze insurance data for various purposes, such as to
develop insurance rates or set claim reserves - Actuary
An operational sequence used to solve mathematical problems and to create computer programs -
Algorithm
A claim made in the complaint by the plaintiff, specifying what the plaintiff expects to prove to obtain a
judgement against the defendant - Allegation
A case reserving method that establishes a predetermined dollar amount of reserve for each claim as it
is reported - Average value method
Sets of data that are too large to be gathered and analyzed by traditional methods - Big data
A distributed digital ledger that facilitates secure transactions without the need for a third party -
Blockchain
A person responsible for investigating, evaluating, and settling claims - Claims representative
A supervised learning technique that uses a structure similar to a tree to segment data according to
known attributes to determine the value of a categorical target variable - Classification tree
A clause that required the insured to carry insurance equal to at least a specified percentage of the
insured property's value - Coinsurance clause
A representation of data attributes in a classification tree - Combination of nodes
A common-law principle that requires both parties to a loss to share the financial burden of the bodily
injury or property damage according to their respective degrees of fault - Comparative negligence
A payment awarded by a court to reimburse a victim for actual harm - Compensatory damages
The allegations made by a plaintiff in a lawsuit - Complaint
A claim that contains one or more characteristics that cause it to cost more than the average claim -
Complex claim
An intentional failure to disclose a material fact - Concealment
A common-law principle that prevents a person who has been harmed from recovering damages if that
person's own negligence contributed in any way to the harm - Contributory Negligence
,An accepted standard for the steps in any data mining process used to provide business solutions -
Cross Industry Standard Process for Data Mining (CRISP DM)
The analysis of large amounts of data to find new relationships and patterns that will assist in developing
business solutions - Data mining
An interdisciplinary field involving the design and use of techniques to process very large amounts of
data from a variety of sources and to provide knowledge based on the data - Data science
A reduction in the value of property that results directly and often immediately from damage to that
property - Direct loss
A pretrial exchange of all relevant information between the plaintiff and defendant - Discovery
Information related to the context of the information a data scientist is working with - Domain
knowledge
The study of what constitutes good and bad behavior, dealing with moral duty and obligation -
Ethics
A method of setting reserves with a software application that estimates losses and loss adjustment
expenses - Expert System method
A set of rules established to ensure that civil actions and procedures move through the United States
district courts as quickly as possible - Federal Rules of Civil Procedure
The initial report notifying the insurer of a claim - First notice of loss (FNOL)
A method of setting claims reserves be using a mathematical formula - Formula method
A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve
specific, measurable expenses - General damages
Actions that are undertaken deliberately to defraud - Hard fraud
In the model training process, existing data with a known target variable that is not used as part of the
training data - Holdout data
To restore a party who has sustained a loss to the same financial position that party held before the loss
occurred - Indemnify
A loss that arises as a result of damage to property, other than the direct loss to the property -
Indirect loss
A method of setting reserves based on the claim's circumstances and the claims representative's
experience in handling similar claims - Individual case method
A measure of the predictive power of one or more attributes - Information gain
,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 - Insurable interest
Any deliberate deception committed against an insurer or an insurance producer for the purpose of
unwarranted financial gain - Insurance fraud
A network of objects that transmit data to each other and to central hubs through the internet -
Internet of Things (IoT)
A terminal node of a classification tree that is used to classify an instance based on its attributes -
Leaf node
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 - Lift
The expense that an insurer incurs to investigate, defend, and settle claims according to the terms
specified in the insurance policy - Loss adjustment expense (LAE)
A ratio that measures losses and loss adjustment expenses against earned premiums and that reflects
the percentage of premiums being consumed by losses - Loss ratio
Artificial intelligence in which computers continually teach themselves to make better decisions based on
previous results and new data - Machine learning
A fact that is significant to a decision or matter at hand - Material fact
A false statement of a material fact on which a party relies - Misrepresentation
A request that a court terminate an action because of settlement, voluntary withdrawal, or procedural
defect - Motion to dismiss
A pretrial request that certain evidence be excluded from the trial - Motion in limine
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 - Motion for summary judgment
In model performance evaluation, a model's correct positive predictions divided by its total positive
predictions - Precision
A model used to predict an unknown outcome by means of a defined target variable - Predictive
model
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 - Premium Audit
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) - Pro
rata contribution
, Any of several kinds of insurance personnel who place insurance and surety business with insurers and
who represent either insurers or insureds, or both - Producer
An outside organization or person hired by an insured to represent the insured in a claim in exchange for
a fee - Public Adjuster
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 - Punitive
damages (exemplary damages)
Successively applying a model - Recursively
The amount the insurer estimates and sets aside to pay on an existing claim - Reserve
The first node in a classification tree - Root node
A method of setting reserves by using the consensus of two or more claims personnel who have
independently evaluated the claims file - Roundtable method
The delivery of a summons and complaint to a defendant by an authorized person - Service of
process
Fraud that occurs when a legitimate claim is exaggerated - Soft fraud, or opportunity fraud
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
damages
A division set up to investigate suspicious claims, premium fraud, or application fraud - Special
Investigation unit (SIU)
An accident deliberately caused by a person who intends to feign injury and collect on the ensuing claim
- Staged Accident
The principle that lower courts must follow precedents set by higher courts - Stare decisis
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 - Statute of limitations
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 - Summons
The use of technological devices to transmit data via wireless communication and GPS tracking -
Telematics
An organization that provides administrative services associated with risk financing and insurance -
Third-party administrator (TPA)
VERIFIED ANSWERS
In model performance evaluation, a model's correct predictions divided by its total predictions -
Accuracy
A person who uses mathematical methods to analyze insurance data for various purposes, such as to
develop insurance rates or set claim reserves - Actuary
An operational sequence used to solve mathematical problems and to create computer programs -
Algorithm
A claim made in the complaint by the plaintiff, specifying what the plaintiff expects to prove to obtain a
judgement against the defendant - Allegation
A case reserving method that establishes a predetermined dollar amount of reserve for each claim as it
is reported - Average value method
Sets of data that are too large to be gathered and analyzed by traditional methods - Big data
A distributed digital ledger that facilitates secure transactions without the need for a third party -
Blockchain
A person responsible for investigating, evaluating, and settling claims - Claims representative
A supervised learning technique that uses a structure similar to a tree to segment data according to
known attributes to determine the value of a categorical target variable - Classification tree
A clause that required the insured to carry insurance equal to at least a specified percentage of the
insured property's value - Coinsurance clause
A representation of data attributes in a classification tree - Combination of nodes
A common-law principle that requires both parties to a loss to share the financial burden of the bodily
injury or property damage according to their respective degrees of fault - Comparative negligence
A payment awarded by a court to reimburse a victim for actual harm - Compensatory damages
The allegations made by a plaintiff in a lawsuit - Complaint
A claim that contains one or more characteristics that cause it to cost more than the average claim -
Complex claim
An intentional failure to disclose a material fact - Concealment
A common-law principle that prevents a person who has been harmed from recovering damages if that
person's own negligence contributed in any way to the harm - Contributory Negligence
,An accepted standard for the steps in any data mining process used to provide business solutions -
Cross Industry Standard Process for Data Mining (CRISP DM)
The analysis of large amounts of data to find new relationships and patterns that will assist in developing
business solutions - Data mining
An interdisciplinary field involving the design and use of techniques to process very large amounts of
data from a variety of sources and to provide knowledge based on the data - Data science
A reduction in the value of property that results directly and often immediately from damage to that
property - Direct loss
A pretrial exchange of all relevant information between the plaintiff and defendant - Discovery
Information related to the context of the information a data scientist is working with - Domain
knowledge
The study of what constitutes good and bad behavior, dealing with moral duty and obligation -
Ethics
A method of setting reserves with a software application that estimates losses and loss adjustment
expenses - Expert System method
A set of rules established to ensure that civil actions and procedures move through the United States
district courts as quickly as possible - Federal Rules of Civil Procedure
The initial report notifying the insurer of a claim - First notice of loss (FNOL)
A method of setting claims reserves be using a mathematical formula - Formula method
A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve
specific, measurable expenses - General damages
Actions that are undertaken deliberately to defraud - Hard fraud
In the model training process, existing data with a known target variable that is not used as part of the
training data - Holdout data
To restore a party who has sustained a loss to the same financial position that party held before the loss
occurred - Indemnify
A loss that arises as a result of damage to property, other than the direct loss to the property -
Indirect loss
A method of setting reserves based on the claim's circumstances and the claims representative's
experience in handling similar claims - Individual case method
A measure of the predictive power of one or more attributes - Information gain
,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 - Insurable interest
Any deliberate deception committed against an insurer or an insurance producer for the purpose of
unwarranted financial gain - Insurance fraud
A network of objects that transmit data to each other and to central hubs through the internet -
Internet of Things (IoT)
A terminal node of a classification tree that is used to classify an instance based on its attributes -
Leaf node
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 - Lift
The expense that an insurer incurs to investigate, defend, and settle claims according to the terms
specified in the insurance policy - Loss adjustment expense (LAE)
A ratio that measures losses and loss adjustment expenses against earned premiums and that reflects
the percentage of premiums being consumed by losses - Loss ratio
Artificial intelligence in which computers continually teach themselves to make better decisions based on
previous results and new data - Machine learning
A fact that is significant to a decision or matter at hand - Material fact
A false statement of a material fact on which a party relies - Misrepresentation
A request that a court terminate an action because of settlement, voluntary withdrawal, or procedural
defect - Motion to dismiss
A pretrial request that certain evidence be excluded from the trial - Motion in limine
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 - Motion for summary judgment
In model performance evaluation, a model's correct positive predictions divided by its total positive
predictions - Precision
A model used to predict an unknown outcome by means of a defined target variable - Predictive
model
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 - Premium Audit
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) - Pro
rata contribution
, Any of several kinds of insurance personnel who place insurance and surety business with insurers and
who represent either insurers or insureds, or both - Producer
An outside organization or person hired by an insured to represent the insured in a claim in exchange for
a fee - Public Adjuster
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 - Punitive
damages (exemplary damages)
Successively applying a model - Recursively
The amount the insurer estimates and sets aside to pay on an existing claim - Reserve
The first node in a classification tree - Root node
A method of setting reserves by using the consensus of two or more claims personnel who have
independently evaluated the claims file - Roundtable method
The delivery of a summons and complaint to a defendant by an authorized person - Service of
process
Fraud that occurs when a legitimate claim is exaggerated - Soft fraud, or opportunity fraud
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
damages
A division set up to investigate suspicious claims, premium fraud, or application fraud - Special
Investigation unit (SIU)
An accident deliberately caused by a person who intends to feign injury and collect on the ensuing claim
- Staged Accident
The principle that lower courts must follow precedents set by higher courts - Stare decisis
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 - Statute of limitations
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 - Summons
The use of technological devices to transmit data via wireless communication and GPS tracking -
Telematics
An organization that provides administrative services associated with risk financing and insurance -
Third-party administrator (TPA)
