AIC 300 Exam 1 Questions with Correct
Answers
People purchase property-casualty insurance policies to
protect against financial losses
Indemnify
to restore a party that sustain a loss to the financial position they had before. wont just pay
anything - insurer's Claims Department will conduct a good-faith investigation of a claim and
pay only legitimate claims that are covered by the policy.
Claims and insurer primary goals
1. Keep promise -fair prompt and equitable service when losses involve 1st or 3rd party
claims. 2. support the insurer profit goal
1st party insurance
Property insurance is considered first-party insurance because the insurer, or second party,
makes payment for covered losses directly to the policyholder, or first party.
3rd party insurance
Liability insurance is considered third-party insurance because the insurer makes payments
on behalf of the policyholder to a claimant (third party) who is injured or whose property is
damaged by the policyholder.
claims department structure
headed by a senior claims officer reporting to CEO or CFO
Insurance fraud costs how much per year
Costs roughly $40 billion per year, excluding health insurance
third party administrators (TPAs)
,an organization that administrative services associated with risk financing and insurance.
They are often associated with large independent adjusting firms or with subsidiaries of
insurers.
TPAs job
TPAs handle claims, keep claims records, and perform statistical analyses.
Claims representatives
a person in charge of investigating, evaluating, and settling claims
producers
any of several kinds of personal (agents, brokers, sales reps) who place insurance and surety
business with insurers and who represents insurers or insureds or both. who insurer goes to.
some even pay small claims
public adjusters
an outside organization or person hired by an insured to represent in a claim in exchange for a
fee. Some states have statutes that govern the services public adjusters can provide. But, in
general, a public adjuster prepares an insured's claim and negotiates the settlement with the
staff claims representative or independent adjuster.
when are independent adjusters used
used by insurers to handle claims in strategic locations, when they don't need claims offices
there. Could also be used to handle field work, for specialized skills or when claims staff are
too busy.
Line underwriters
evaluate new submissions and perform renewal underwriting, usually by working directly
with insurance producers and applicants
Staff underwriters
,manage risk selection by working with line underwriters and coordinating decisions about
products, pricing, and guidelines
Underwriter key activates
1. minimize adverse selection, 2. ensure adequate policy surplus, 3. Enforce underwriting
guidelines
The Claims Department relies on underwriters for
thorough, accurate data about the circumstances under which coverage was written.
Claims personnel help underwriters by
ensuring that claims are paid fairly and according to their respective policy. Proper,
consistent, and efficient claims handling enables underwriters to evaluate, select, and
appropriately price loss exposures.
claims & premium audits
claims information benefits the premium audit function by verifying employment
classifications. Premium auditors can provide inventory values, contractors' equipment lists,
and other facts that are important to the claims function.
The goal of insurer marketing is to
effectively communicate to target audiences that the insurer's products and services will meet
their needs and to subsequently secure customers, in support of the insurer's strategies and
objectives.
An insurer's management team must decide
insurance products and services will be sold to which markets. Product decisions range from
what product lines to offer to what coverages, limits, and deductibles to include in the policy.
Sales fulfillment is
the satisfactory delivery of products and services. Fulfilling a product plan affects many
departments within an insurer's business. For example, introducing policies and services that
, target high-net-worth individuals as a market segment involves customer service,
underwriting, claims, and other functional areas.
customer service representatives handle
claims notifications, they must collaborate with claims representatives to ensure fast, accurate
communication of claims-related information.
why to insurers employ panel experts
when needs arise for field experts, the claims rep can select a panel member who best fits the
investigation's needs. Depending on the types of claims they handle, they will interact with
various experts in a field, including attorneys, medical providers, expert witnesses, and
investigators.
who do claims regularly interact with
underwriters, marketing and sales professionals, customer service representatives, and
external experts.
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.
why is communication important to claims
During claims investigation and resolution, claims representatives communicate with various
parties, including insureds, claimants, witnesses, attorneys, experts, and other insurance
professionals. Appropriate communication with claimants is key to ensuring their
collaboration in the resolution of their claims.
What do you think sets the tone for the claim's adjustment process?
The claims rep's initial contact with the insured sets the tone for the adjustment process.
How to ensure empathetic listening
Listen and explain that you understand
Answers
People purchase property-casualty insurance policies to
protect against financial losses
Indemnify
to restore a party that sustain a loss to the financial position they had before. wont just pay
anything - insurer's Claims Department will conduct a good-faith investigation of a claim and
pay only legitimate claims that are covered by the policy.
Claims and insurer primary goals
1. Keep promise -fair prompt and equitable service when losses involve 1st or 3rd party
claims. 2. support the insurer profit goal
1st party insurance
Property insurance is considered first-party insurance because the insurer, or second party,
makes payment for covered losses directly to the policyholder, or first party.
3rd party insurance
Liability insurance is considered third-party insurance because the insurer makes payments
on behalf of the policyholder to a claimant (third party) who is injured or whose property is
damaged by the policyholder.
claims department structure
headed by a senior claims officer reporting to CEO or CFO
Insurance fraud costs how much per year
Costs roughly $40 billion per year, excluding health insurance
third party administrators (TPAs)
,an organization that administrative services associated with risk financing and insurance.
They are often associated with large independent adjusting firms or with subsidiaries of
insurers.
TPAs job
TPAs handle claims, keep claims records, and perform statistical analyses.
Claims representatives
a person in charge of investigating, evaluating, and settling claims
producers
any of several kinds of personal (agents, brokers, sales reps) who place insurance and surety
business with insurers and who represents insurers or insureds or both. who insurer goes to.
some even pay small claims
public adjusters
an outside organization or person hired by an insured to represent in a claim in exchange for a
fee. Some states have statutes that govern the services public adjusters can provide. But, in
general, a public adjuster prepares an insured's claim and negotiates the settlement with the
staff claims representative or independent adjuster.
when are independent adjusters used
used by insurers to handle claims in strategic locations, when they don't need claims offices
there. Could also be used to handle field work, for specialized skills or when claims staff are
too busy.
Line underwriters
evaluate new submissions and perform renewal underwriting, usually by working directly
with insurance producers and applicants
Staff underwriters
,manage risk selection by working with line underwriters and coordinating decisions about
products, pricing, and guidelines
Underwriter key activates
1. minimize adverse selection, 2. ensure adequate policy surplus, 3. Enforce underwriting
guidelines
The Claims Department relies on underwriters for
thorough, accurate data about the circumstances under which coverage was written.
Claims personnel help underwriters by
ensuring that claims are paid fairly and according to their respective policy. Proper,
consistent, and efficient claims handling enables underwriters to evaluate, select, and
appropriately price loss exposures.
claims & premium audits
claims information benefits the premium audit function by verifying employment
classifications. Premium auditors can provide inventory values, contractors' equipment lists,
and other facts that are important to the claims function.
The goal of insurer marketing is to
effectively communicate to target audiences that the insurer's products and services will meet
their needs and to subsequently secure customers, in support of the insurer's strategies and
objectives.
An insurer's management team must decide
insurance products and services will be sold to which markets. Product decisions range from
what product lines to offer to what coverages, limits, and deductibles to include in the policy.
Sales fulfillment is
the satisfactory delivery of products and services. Fulfilling a product plan affects many
departments within an insurer's business. For example, introducing policies and services that
, target high-net-worth individuals as a market segment involves customer service,
underwriting, claims, and other functional areas.
customer service representatives handle
claims notifications, they must collaborate with claims representatives to ensure fast, accurate
communication of claims-related information.
why to insurers employ panel experts
when needs arise for field experts, the claims rep can select a panel member who best fits the
investigation's needs. Depending on the types of claims they handle, they will interact with
various experts in a field, including attorneys, medical providers, expert witnesses, and
investigators.
who do claims regularly interact with
underwriters, marketing and sales professionals, customer service representatives, and
external experts.
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.
why is communication important to claims
During claims investigation and resolution, claims representatives communicate with various
parties, including insureds, claimants, witnesses, attorneys, experts, and other insurance
professionals. Appropriate communication with claimants is key to ensuring their
collaboration in the resolution of their claims.
What do you think sets the tone for the claim's adjustment process?
The claims rep's initial contact with the insured sets the tone for the adjustment process.
How to ensure empathetic listening
Listen and explain that you understand
