AIC 300 MAIN EXAM COMPLETE QUESTIONS||KEY TEST QUESTIONS with 100% Correct Detailed Answers||A+ GRADED!!!Brand New VersionUpdated ||

AIC 300 MAIN EXAM COMPLETE QUESTIONS||KEY TEST QUESTIONS with 100% Correct Detailed Answers||A+ GRADED!!!Brand New VersionUpdated || 1) Cross Industry Standard Process for Data Mining (CRISP DM) - ANSWER An accepted standard for the steps in any data mining process used to provide business solutions 2) Data mining - ANSWER The analysis of large amounts of data to find new relationships and patterns that will assist in developing business solutions 3) Data science - ANSWER 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 4) Direct loss - ANSWER A reduction in the value of property that results directly and often immediately from damage to that property 5) Discovery - ANSWER A pretrial exchange of all relevant information between the plaintiff and defendant 6) Domain knowledge - ANSWER Information related to the context of the information a data scientist is working with 7) Ethics - ANSWER The study of what constitutes good and bad behavior, dealing with moral duty and obligation 8) Expert System method - ANSWER A method of setting reserves with a software application that estimates losses and loss adjustment expenses 9) Federal Rules of Civil Procedure - ANSWER A set of rules established to ensure that civil actions and procedures move through the United States district courts as quickly as possible 10) First notice of loss (FNOL) - ANSWER The initial report notifying the insurer of a claim 11) Formula method - ANSWER A method of setting claims reserves be using a mathematical formula 12) General damages - ANSWER A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve specific, measurable expenses 13) Hard fraud - ANSWER Actions that are undertaken deliberately to defraud 14) Holdout data - ANSWER In the model training process, existing data with a known target variable that is not used as part of the training data 15) Indemnify - ANSWER To restore a party who has sustained a loss to the same financial position that party held before the loss occurred 16) Indirect loss - ANSWER A loss that arises as a result of damage to property, other than the direct loss to the property 17) Individual case method - ANSWER A method of setting reserves based on the claim's circumstances and the claims representative's experience in handling similar claims 18) Information gain - ANSWER A measure of the predictive power of one or more attributes 19) Insurable interest - ANSWER 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 20) Insurance fraud - ANSWER Any deliberate deception committed against an insurer or an insurance producer for the purpose of unwarranted financial gain 21) Internet of Things (IoT) - ANSWER A network of objects that transmit data to each other and to central hubs through the internet 22) Leaf node - ANSWER A terminal node of a classification tree that is used to classify an instance based on its attributes 23) Lift - ANSWER 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 24) Loss adjustment expense (LAE) - ANSWER The expense that an insurer incurs to investigate, defend, and settle claims according to the terms specified in the insurance policy 25) Loss ratio - ANSWER A ratio that measures losses and loss adjustment expenses against earned premiums and that reflects the percentage of premiums being consumed by losses 26) Machine learning - ANSWER Artificial intelligence in which computers continually teach themselves to make better decisions based on previous results and new data 27) Material fact - ANSWER A fact that is significant to a decision or matter at hand 28) Misrepresentation - ANSWER A false statement of a material fact on which a party relies 29) Motion to dismiss - ANSWER A request that a court terminate an action because of settlement, voluntary withdrawal, or procedural defect 30) Motion in limine - ANSWER A pretrial request that certain evidence be excluded from the trial 31) Motion for summary judgment - ANSWER 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 32) In liability claims, the claims rep will require an authorization from the injured party to - ANSWER Obtain medical records 33) In her investigations into fraudulent claims, Laura uses information about the driver's history and driving habits to determine factors such as speed, acceleration, and location. Laura is using - ANSWER Telematics. 34) As a part of the first contact with an insured on a property damage claim, a claims representative may provide a blank - ANSWER First notice of loss form 35) The NAIC model act specifies that its provisions regarding bad-faith claims are to be enforced by - ANSWER State insurance departments 36) Which one of the following statements regarding subrogation is most accurate? - ANSWER Most policies require the insured to cooperate with the insurer in recovering payment through subrogation, to include testifying or appearing in court. 37) If the decision on a claim settlement is negative, as in a denial, good-faith claims handling requires the claims rep to - ANSWER Explain the rationale behind the decision to the claimant. 38) Sho is a claims representative. With regard to his responsibility for defending his employer against fraud, Sho understands that - ANSWER Paying fraudulent claims affects insureds. 39) Claims rep Miguel is conducting a settlement with a claimant. He constructs his first offer so that the claimant will likely find it undesirable. This becomes the basis of comparison for the second offer that he makes. Miguel understands that people - ANSWER Feel empowered when given a choice. 40) Among the methods used to pay claims are the issuance of checks and bank drafts. The main difference between the two is that - ANSWER With a bank draft, the bank must verify that the insurer has authorized payment 41) DaJuan, a claims representative, sets a low case reserve for a seemingly simple claim. A few weeks later it becomes apparent that the initial reserve was too low, and he increases it in order to issue payments. More bills related to the claim arrive a few months later, and he increases the reserve again. This process is known as - ANSWER Stairstepping 42) Ida was named in a bad-faith lawsuit as the claims representative who handled the file. The court dismissed the suit, however, because the statute of limitations had expired. This means that - ANSWER Too much time had expired after the claim concluded 43) Conor is a claims representative whose supervisor is reviewing his claim status notes. The supervisor took exception with one of Conor's notes, which read, "The claimant is obviously lying because his account of how the accident happened keeps changing." The supervisor should advise Conor that this statement is inappropriate because it is not - ANSWER Objective. 44) Which one of the following methods of establishing case reserves involves a consensus among multiple claims reps? - ANSWER Roundtable method 45) Which one of the following elements of a policy can include coverage that is otherwise excluded, exclude coverage that is otherwise included, or add or delete insureds? - ANSWER An endorsement. 46) Attorney Grace is representing an insurer in a case and is preparing a pretrial motion. Her argument is that the court has no jurisdiction for the cause of action brought by the claimant. Grace is preparing a - ANSWER Motion to dismiss. 47) Because a full or partial denial of a claim may result in a bad-faith lawsuit, a claims representative should - ANSWER Carefully document their reasoning for denial. 48) Which one of the following is correct with respect to the elements of good-faith claim management? - ANSWER Consistent supervision, thorough training, and manageable caseloads help ensure that claim representatives are able to handle claims in good faith. 49) While staff claims representatives may have a variety of titles, the role is typically defined by two things: having a primary focus on claims and - ANSWER Being an employee of the insurer 50) Bettina's apartment is burglarized and several items are stolen. In filing her claim, she tells her insurer that her stolen television was both newer and larger than it actually was. This constitutes which one of the following types of fraud? - ANSWER Soft fraud 51) Antonia has a general liability policy with a self-insured retention of $50,000. The policy has an occurrence limit of $250,000 and an aggregate limit of $500,000. She had submitted one prior claim this policy term for which $100,000 was paid by the insurer. How much will Antonia's insurer pay on a subsequent claim under the same policy period that is valued at $400,000? - ANSWER $250,000 52) Maja handled a large liability claim that settled above the policy limits. The insured is now charging the claim was handled in bad faith. During their investigation of the badfaith claim, Maja and defense counsel discovered that the claimant had received the payment from the insurer, but not the amount above the policy limits that was to come from the insured's assets. Which one of the following defenses would Maja's defense most likely invoke? - ANSWER Insured's collusion with claimant 53) James works for a multi-line insurer. He is responsible for investigating claims that raise suspicion of fraud. James is in the - ANSWER Special Investigation Unit 54) In a typical scenario, a summons and complaint initiating litigation is received by these parties in which one of the following sequences? - ANSWER Insured, claims rep, defense counsel 55) Ciara is going to college with the goal of working as a data scientist for an insurer. She will need a strong foundation in mathematics and statistics, computer programming, domain knowledge, and data science. Which one of Ciara's skills will require her to understand the insurance profession to which the data is being applied? - ANSWER Domain knowledge 56) Luke runs his business out of a store front in a commercial building. After a fire destroyed part of the building, Luke made a claim for damages and received a settlement check from the property insurer. This necessarily means that Luke - ANSWER Is named in the policy declarations or an endorsement. 57) Insurers and claim representatives must keep the promises specified in insurance policies, as well as those created by the law. In insurance transactions, the insured pays a premium for the insurer's promise to - ANSWER Handle claims in good faith 58) Which one of the following can be applied over time to refine a model to better predict results? - ANSWER Machine learning 59) Alva works for an international, multi-line insurer. She helps her company to manage risk selection by working with other underwriters and coordinating decisions about products, pricing, and guidelines. Alva is a - ANSWER Staff underwriter 60) Mustafa is a data scientist who is working with a team of underwriting, IT, and actuary to develop a predictive analytics model. The main goal of the project is to translate the insights gained from the model they develop into business action. In Mustafa's experience, the team member that can provide the bridge between the analytics and the business is - ANSWER Actuary 61) Olivia is careful to keep proper claim status notes when she handles a claim. For example, she makes sure to only include neutral, objective comments about the parties involved. This is because claim notes - ANSWER Are potentially discoverable in a trial 62) The allegations contained in a summons and complaint typically serve four purposes: To give notice, reveal facts, formulate legal causes of action and - ANSWER State the damages sought 63) As a claims representative, Joshua frequently requests proofs of loss and affidavits, and conducts examinations under oath and recorded statements. Which one of Joshua's sworn statements is administered by the insurer's attorney at the office of the insurer, attorney, or court reporter? - ANSWER Examination under oath 64) Precision - ANSWER In model performance evaluation, a model's correct positive predictions divided by its total positive predictions 65) Predictive model - ANSWER A model used to predict an unknown outcome by means of a defined target variable 66) Premium Audit - ANSWER 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 67) Pro rata contribution - ANSWER 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) 68) Producer - ANSWER Any of several kinds of insurance personnel who place insurance and surety business with insurers and who represent either insurers or insureds, or both 69) Public Adjuster - ANSWER An outside organization or person hired by an insured to represent the insured in a claim in exchange for a fee 70) Punitive damages (exemplary damages) - ANSWER 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 71) Recursively - ANSWER Successively applying a model 72) Reserve - ANSWER The amount the insurer estimates and sets aside to pay on an existing claim 73) Root node - ANSWER The first node in a classification tree 74) Roundtable method - ANSWER A method of setting reserves by using the consensus of two or more claims personnel who have independently evaluated the claims file 75) Service of process - ANSWER The delivery of a summons and complaint to a defendant by an authorized person 76) Soft fraud, or opportunity fraud - ANSWER Fraud that occurs when a legitimate claim is exaggerated 77) Special damages - ANSWER 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 78) Special Investigation unit (SIU) - ANSWER A division set up to investigate suspicious claims, premium fraud, or application fraud 79) Staged Accident - ANSWER An accident deliberately caused by a person who intends to feign injury and collect on the ensuing claim 80) Stare decisis - ANSWER The principle that lower courts must follow precedents set by higher courts 81) Statute of limitations - ANSWER 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 82) Summons - ANSWER 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 83) Telematics - ANSWER The use of technological devices to transmit data via wireless communication and GPS tracking 84) Third-party administrator (TPA) - ANSWER An organization that provides administrative services associated with risk financing and insurance 85) Tort - ANSWER A wrongful act or an omission, other than a crime or breach of contract, that invades a legally protected right 86) Tortfeasor - ANSWER A person or an organization that has committed a tort 87) Training data - ANSWER Data that is used to train a predictive model and that therefore must have known values for the target variable of the model 88) Wearable sensor tag - ANSWER A sensor attached to or embedded in clothing and accessories 89) Aaron works for a multi-line insurer. He works with insurance producers and applicants to evaluate new business submissions and conduct renewal underwriting. Aaron is a - ANSWER Line underwriter 90) Mia tracks loss adjustment expense (LAE) as part of her management of the claims department for an insurer. Mia considers LAE to be the - ANSWER Cost to investigate, defend, and settle claims 91) Which one of the following statements regarding third-party administrators (TPAs) is most accurate? - ANSWER TPAs handle claims, keep claims records, and perform statistical analyses 92) In which one of the following scenarios is a public adjuster most likely to become involved? - ANSWER An insured's negotiations with the insurer on a complex claim are not going well 93) Hugo is conducting an audit of a branch office claims operation. He is evaluating timeliness of reports, number of files opened, proper releases taken, and accuracy of data entry. Which one of Hugo's metrics is a qualitative audit factor? - ANSWER Proper releases taken 94) As methods of communication evolve, it's important for claims professionals to remember that any written claims communication may be - ANSWER Subpoenaed 95) The first key to communicating empathetically as a claims professional is - ANSWER Listening 96) In her role with an insurer, Katarina has opportunity to collaborate with not only employees from her company, but also external experts with particular expertise. For example, as part of her investigation, she hired an engineer to conduct a review of a machine that was involved in a personal injury. Katarina is a(n) - ANSWER Claim representative 97) When Mehmet interviews witnesses as part of his claims investigation, he asks different types of questions based on need, such as open-ended, direct, indirect, and leading. Which type of question should Mehmet ask when he wants to set the interviewee at ease and he is looking for explanation or elaboration of details in the interviewee's own words? - ANSWER Open-ended 98) Which one of the following methods of establishing case reserves is used most often when there are small variations in loss size for a particular type of claim? - ANSWER Average value method 99) One of Juan's responsibilities as a claims representative is to prepare internal reports, such as preliminary, interim, large loss, and captioned. Which one of the reports Juan prepares is required for claims with reserves that exceed a specified threshold? - ANSWER Large loss 100) Charlotte is handling a new claim and she has set the initial reserves at $1,000,000. She has been asked to complete an internal report summarizing all the file status information for distribution to management and updated as more information is received. The report Charlotte is completing is most likely a - ANSWER Large loss report 101) In claims investigation, all bodily injury claims require - ANSWER A medical investigation 102) In the process of assigning a claim, an internal claims handler will often transfer information to the insurer's standard form, called the - ANSWER First notice of loss (FNOL) form 103) To determine whether an insurer typically underreserves or overreserves claims, actuaries compare the insurer's paid losses to - ANSWER The insurer's case reserves 104) In which one of the following scenarios is the right of subrogation most likely to be employed by the insurer? - ANSWER A claims rep discovers that their insured's car accident was caused by a road contractor who left equipment lying in the travel lanes of a highway 105) Before making initial contact with an insured or claimant, a claims representative should - ANSWER Prepare a list of questions for the insured 106) Carolina is a claim representative handling a liability claim. She is speaking to the claimant over the phone and has informed him that his statements must be true under penalty of perjury. When completed, she sent a transcription of the conversation to the claimant for him to sign before a notary. Carolina has taken a(n) - ANSWER Recorded statement