AIC 30: 1-3 Practice Questions with Correct Answers
Question 1:
Some jurisdictions have found certain practices in claim handling to be the unauthorized
practice of law. An typical example is
Answer:
Providing direction on legal strategies.
Question 2:
When a severe hurricane comes ashore in the southeast, the wind and water damage are
extensive. Best Insurance Company's regional claim office is overwhelmed and cannot keep up
with the volume of claims. The company's home office temporarily assigns claim
representatives from across the country to the southeast region to assist. Which one of the
following is correct concerning potential ethical or professional dilemmas associated with this
situation?
Answer:
States often grant temporary licenses to out-of-state claim representatives for catastrophe
claim handling.
Question 3:
Ethical and professional conduct can benefit consumers by
Answer:
Encouraging fair treatment and prompt payment.
Question 4:
One benefit of ethical and professional conduct of claim representatives for insurers is that
such conduct will typically
Answer:
Attract investors
Question 5:
Which one of the following involves applying a set of principles and values in making a choice
between an acceptable course of action and a better one?
Answer:
Ethics
,Question 6:
Which one of the following creates legal duties for insurers?
Answer:
Consumer regulations
Question 7:
Fred had wind damage to his barn and also to an already damaged pickup truck. Fred knows he
can, but should not, report the preexisting damage as a new damage for claim payment by his
insurer. Fred is facing
Answer:
A moral dilemma.
Question 8:
correctly describe reasons for the use of independent adjusters
Answer:
Insurers may use independent adjusters when special skills and expertise are needed, for
example to investigate aircraft accidents. n the case of a catastrophic loss such as a hurricane,
an insurer may not have sufficient staff to manage the large number of claims, and may use
independent adjusters. In some areas it is not economically feasible to set up claim offices, and
insurers may contract with independent adjusters to handle claims in these remote areas.
Question 9:
a reason when an IA should NOT be used
Answer:
The insured may retain an independent adjuster if settlement negotiations with the insurer are
not progressing satisfactorily.
Question 10:
Ethics and professionalism are important for insurance professionals because
Answer:
Consumer regulations may define the minimum expected ethical and professional standards.
Question 11:
Licensure-related ethical dilemmas can arise when a manager or supervisor asks a claim
representative to assume claim handling responsibilities
Answer:
In a territory in which the claim representative is not licensed.
, Question 12:
Bart, a claim representative, was disappointed with his recent performance evaluation and
salary rating. Because of what Bart considered an unfair evaluation, he has since expended less
effort in his job and has taken less interest in improvement. The factor that most affected Bart's
claim handling competency in this situation is
Answer:
Inequitable rewards and promotions.
Question 13:
Joe who owns a used auto parts store is also a claim representative for an insurance company.
To obtain inexpensive parts, Joe often indicates a total loss on a claim so that he has access to
more auto parts at private auctions. Joe is involved in
Answer:
A conflict of interest.
Question 14:
Ultimately, the insurance product is
Answer:
A promise made by the insurer to the insured.
Question 15:
A choice between keeping the money in a found wallet versus returning it to the owner is an
example of which one of the following types of dilemmas?
Answer:
Moral dilemma
Question 16:
Lou is a claim manager at a small property-casualty insurance company. Lou takes pride in the
fact that because of his leadership, his company has gained a public reputation for resisting
legitimate claims.
Ultimately, this reputation
Answer:
Undermines the effectiveness of his company's advertising.
Question 1:
Some jurisdictions have found certain practices in claim handling to be the unauthorized
practice of law. An typical example is
Answer:
Providing direction on legal strategies.
Question 2:
When a severe hurricane comes ashore in the southeast, the wind and water damage are
extensive. Best Insurance Company's regional claim office is overwhelmed and cannot keep up
with the volume of claims. The company's home office temporarily assigns claim
representatives from across the country to the southeast region to assist. Which one of the
following is correct concerning potential ethical or professional dilemmas associated with this
situation?
Answer:
States often grant temporary licenses to out-of-state claim representatives for catastrophe
claim handling.
Question 3:
Ethical and professional conduct can benefit consumers by
Answer:
Encouraging fair treatment and prompt payment.
Question 4:
One benefit of ethical and professional conduct of claim representatives for insurers is that
such conduct will typically
Answer:
Attract investors
Question 5:
Which one of the following involves applying a set of principles and values in making a choice
between an acceptable course of action and a better one?
Answer:
Ethics
,Question 6:
Which one of the following creates legal duties for insurers?
Answer:
Consumer regulations
Question 7:
Fred had wind damage to his barn and also to an already damaged pickup truck. Fred knows he
can, but should not, report the preexisting damage as a new damage for claim payment by his
insurer. Fred is facing
Answer:
A moral dilemma.
Question 8:
correctly describe reasons for the use of independent adjusters
Answer:
Insurers may use independent adjusters when special skills and expertise are needed, for
example to investigate aircraft accidents. n the case of a catastrophic loss such as a hurricane,
an insurer may not have sufficient staff to manage the large number of claims, and may use
independent adjusters. In some areas it is not economically feasible to set up claim offices, and
insurers may contract with independent adjusters to handle claims in these remote areas.
Question 9:
a reason when an IA should NOT be used
Answer:
The insured may retain an independent adjuster if settlement negotiations with the insurer are
not progressing satisfactorily.
Question 10:
Ethics and professionalism are important for insurance professionals because
Answer:
Consumer regulations may define the minimum expected ethical and professional standards.
Question 11:
Licensure-related ethical dilemmas can arise when a manager or supervisor asks a claim
representative to assume claim handling responsibilities
Answer:
In a territory in which the claim representative is not licensed.
, Question 12:
Bart, a claim representative, was disappointed with his recent performance evaluation and
salary rating. Because of what Bart considered an unfair evaluation, he has since expended less
effort in his job and has taken less interest in improvement. The factor that most affected Bart's
claim handling competency in this situation is
Answer:
Inequitable rewards and promotions.
Question 13:
Joe who owns a used auto parts store is also a claim representative for an insurance company.
To obtain inexpensive parts, Joe often indicates a total loss on a claim so that he has access to
more auto parts at private auctions. Joe is involved in
Answer:
A conflict of interest.
Question 14:
Ultimately, the insurance product is
Answer:
A promise made by the insurer to the insured.
Question 15:
A choice between keeping the money in a found wallet versus returning it to the owner is an
example of which one of the following types of dilemmas?
Answer:
Moral dilemma
Question 16:
Lou is a claim manager at a small property-casualty insurance company. Lou takes pride in the
fact that because of his leadership, his company has gained a public reputation for resisting
legitimate claims.
Ultimately, this reputation
Answer:
Undermines the effectiveness of his company's advertising.
