AIC 300 ANSWERS AND QUESTIONS SET A+
✔✔Mark, a claims rep, is analyzing a claim for fraud. What elements should he be
looking for? - ✔✔• An individual or an organization that has intentionally made an untrue
representation • An untrue representation that concerns an important or a material fact
or event • An untrue representation that was knowingly made • An untrue representation
that was intended to deceive • Whether the victim relied and acted on the untrue
representation • Whether the victim suffered some detriment, such as loss of money
and/or property, as a result of relying and acting on the untrue representation
✔✔Why is soft fraud also known as opportunity fraud? - ✔✔A perpetrator of soft fraud
uses the "opportunity" of a legitimate claim to obtain greater reimbursement than would
be received for the actual loss.
✔✔In order to collect insurance benefits, Maria lied and said her wedding ring was
stolen from her home, when in fact it was not stolen. Why is this a false claim? - ✔✔This
is a false claim because Maria is intentionally trying to deceive her insurance company
in order to gain financially.
✔✔What tool do many insurers use to detect characteristics that are common to
fraudulent claims? - ✔✔Many insurers use computer programs and data analytics to
detect characteristics that are common to fraudulent claims.
✔✔How do some state governments help claims representatives detect and investigate
fraud? - ✔✔Many state governments have enacted laws that help claims reps by
providing some form of protection and guidance. These include extending claims
investigation time limits and not disclosing to an insured that fraud is suspected if there
is already evidence. Often, the evidence must be available for state authorities.
✔✔Why does Emma, a claims representative, need to understand the importance of
ethics in good-faith claims handling? - ✔✔Emma should understand that ethics is
particularly important in good-faith claims handling because she may face numerous
ethical dilemmas while trying to balance the interests of her customers, the insureds
and claimants, and those of the insurer, who is her employer.
, ✔✔What is professionalism, and how does it relate to ethics? - ✔✔Professionalism
requires individuals to act knowledgeably, courteously, and empathetically. These
behaviors and qualities are necessary to properly implement an ethical decision.
✔✔Emma is striving to establish good faith while satisfying contractual duties and other
promises. Why are ethics and professionalism of utmost importance to Emma in this
regard? - ✔✔Ethics and professionalism are of utmost importance to Emma because
she is bound by the insurance contract to act in good faith. While trying to keep the
promises specified in insurance policies and created by law, she will likely encounter
and need to satisfy a variety of parties, including insureds, claimants, producers, service
providers, regulators, and the general public. If the needs of these various parties
conflict, Emma may be faced with dilemmas that require her understanding of and
ability to apply ethical and professional principles.
✔✔What are the primary elements of good-faith claims handling that Pam, a new claims
representative, should incorporate into her work? - ✔✔• Timely, thorough, and unbiased
investigation • Complete and accurate documentation • Fair evaluation • Good-faith
negotiation • Regular and prompt communication • Competent legal advice • Effective
claims management
✔✔Max is a claims rep conducting a complicated claim investigation. How can he
ensure that he's established the foundation for handling the claim in good faith? -
✔✔Max will know if he practiced good-faith claim handling if the claim investigation is: •
Timely—Prompt contact reassures insureds and claimants that their claims are
important and makes them less likely to accept the advice of others, who may
encourage them to retain a lawyer or pursue unnecessary litigation. • Thorough—He
should collect all relevant and necessary evidence for as long as new facts develop or
become available. • Unbiased—Claims reps should make decisions only after gathering
sufficient information, remaining alert for new information that may change the course of
the claim.
✔✔Why is it important for a claim file to provide a complete and accurate account of all
activities and actions undertaken by the claims representative? - ✔✔A claim file must
provide a complete and accurate account of all the activities and actions undertaken by
the claims representative because many people, such as supervisors, colleagues, and
state insurance department reps, may read the file for various purposes.
✔✔What are the different standards regarding negotiations to which claims
representatives and lawyers are held? - ✔✔Claims representatives must make realistic
offers and carefully consider all demands. However, lawyers can, and often do make
exaggerated demands in a vigorous representation of their clients, to obtain the best
settlement possible.
✔✔Mark, a claims rep, is analyzing a claim for fraud. What elements should he be
looking for? - ✔✔• An individual or an organization that has intentionally made an untrue
representation • An untrue representation that concerns an important or a material fact
or event • An untrue representation that was knowingly made • An untrue representation
that was intended to deceive • Whether the victim relied and acted on the untrue
representation • Whether the victim suffered some detriment, such as loss of money
and/or property, as a result of relying and acting on the untrue representation
✔✔Why is soft fraud also known as opportunity fraud? - ✔✔A perpetrator of soft fraud
uses the "opportunity" of a legitimate claim to obtain greater reimbursement than would
be received for the actual loss.
✔✔In order to collect insurance benefits, Maria lied and said her wedding ring was
stolen from her home, when in fact it was not stolen. Why is this a false claim? - ✔✔This
is a false claim because Maria is intentionally trying to deceive her insurance company
in order to gain financially.
✔✔What tool do many insurers use to detect characteristics that are common to
fraudulent claims? - ✔✔Many insurers use computer programs and data analytics to
detect characteristics that are common to fraudulent claims.
✔✔How do some state governments help claims representatives detect and investigate
fraud? - ✔✔Many state governments have enacted laws that help claims reps by
providing some form of protection and guidance. These include extending claims
investigation time limits and not disclosing to an insured that fraud is suspected if there
is already evidence. Often, the evidence must be available for state authorities.
✔✔Why does Emma, a claims representative, need to understand the importance of
ethics in good-faith claims handling? - ✔✔Emma should understand that ethics is
particularly important in good-faith claims handling because she may face numerous
ethical dilemmas while trying to balance the interests of her customers, the insureds
and claimants, and those of the insurer, who is her employer.
, ✔✔What is professionalism, and how does it relate to ethics? - ✔✔Professionalism
requires individuals to act knowledgeably, courteously, and empathetically. These
behaviors and qualities are necessary to properly implement an ethical decision.
✔✔Emma is striving to establish good faith while satisfying contractual duties and other
promises. Why are ethics and professionalism of utmost importance to Emma in this
regard? - ✔✔Ethics and professionalism are of utmost importance to Emma because
she is bound by the insurance contract to act in good faith. While trying to keep the
promises specified in insurance policies and created by law, she will likely encounter
and need to satisfy a variety of parties, including insureds, claimants, producers, service
providers, regulators, and the general public. If the needs of these various parties
conflict, Emma may be faced with dilemmas that require her understanding of and
ability to apply ethical and professional principles.
✔✔What are the primary elements of good-faith claims handling that Pam, a new claims
representative, should incorporate into her work? - ✔✔• Timely, thorough, and unbiased
investigation • Complete and accurate documentation • Fair evaluation • Good-faith
negotiation • Regular and prompt communication • Competent legal advice • Effective
claims management
✔✔Max is a claims rep conducting a complicated claim investigation. How can he
ensure that he's established the foundation for handling the claim in good faith? -
✔✔Max will know if he practiced good-faith claim handling if the claim investigation is: •
Timely—Prompt contact reassures insureds and claimants that their claims are
important and makes them less likely to accept the advice of others, who may
encourage them to retain a lawyer or pursue unnecessary litigation. • Thorough—He
should collect all relevant and necessary evidence for as long as new facts develop or
become available. • Unbiased—Claims reps should make decisions only after gathering
sufficient information, remaining alert for new information that may change the course of
the claim.
✔✔Why is it important for a claim file to provide a complete and accurate account of all
activities and actions undertaken by the claims representative? - ✔✔A claim file must
provide a complete and accurate account of all the activities and actions undertaken by
the claims representative because many people, such as supervisors, colleagues, and
state insurance department reps, may read the file for various purposes.
✔✔What are the different standards regarding negotiations to which claims
representatives and lawyers are held? - ✔✔Claims representatives must make realistic
offers and carefully consider all demands. However, lawyers can, and often do make
exaggerated demands in a vigorous representation of their clients, to obtain the best
settlement possible.
