AIC 300 EXAMINATION QUESTIONS AND 100%
VERIFIED 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.
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
Premium Audit - Methodical examination of a policyholders operations, records, and
books of account to determine the actual exposure units and premium for insurance coverages
already provided.
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.
First notice of loss (FNOL) - The initial report notifying the insurer of a claim.
Reserve - The amount the insurer estimates and sets aside to pay on an existing claim.
Individual case method - A method of setting reserves based on the claim's
circumstances and the claims and representative's experience in handling similar claims.
Roundtable method - A method of setting reserves by using the consensus of two or
more claims personnel who have independently evaluated the claims file.
Average value method - A case reserving method that establishes a predetermined dollar
amount of reserve for each claim as it is reported.
Formula Method - A method of setting claim reserves by using a mathematical formula.
VERIFIED 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.
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
Premium Audit - Methodical examination of a policyholders operations, records, and
books of account to determine the actual exposure units and premium for insurance coverages
already provided.
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.
First notice of loss (FNOL) - The initial report notifying the insurer of a claim.
Reserve - The amount the insurer estimates and sets aside to pay on an existing claim.
Individual case method - A method of setting reserves based on the claim's
circumstances and the claims and representative's experience in handling similar claims.
Roundtable method - A method of setting reserves by using the consensus of two or
more claims personnel who have independently evaluated the claims file.
Average value method - A case reserving method that establishes a predetermined dollar
amount of reserve for each claim as it is reported.
Formula Method - A method of setting claim reserves by using a mathematical formula.
