AIC 302 COMPREHENSIVE ANSWERS AND
QUESTIONS SET A+
✔✔Survival action - ✔✔A legal cause of action that existed for the deceased before
his or her death.
✔✔Wrongful death action - ✔✔A legal cause of action that exists for the survivor of the
deceased.
✔✔Pecuniary loss - ✔✔The monetary economic loss of the survivors.
✔✔Household service - ✔✔A service such as cooking or cleaning.
✔✔Intrinsic value of children - ✔✔The assumption that parents make rational financial
decisions in having children, knowing that the investment
in the expense of raising them will provide companionship
and comfort as a return when the children are older.
✔✔Best alternative to a negotiated agreement (BATNA) - ✔✔The most that an insurer
would pay for a loss after
considering all the facts. The claims representative
determines the highest probable award (as from a trial or
arbitration), then adds the costs of the action.
✔✔Expert system (artificial intelligence systems) - ✔✔A software program that
duplicates the decision-making
process.
✔✔Artificial intelligence (AI) - ✔✔Computer processing or output that simulates human
reasoning or knowledge.
✔✔Nuisance settlement - ✔✔A payment made for a nominal amount to conclude a
doubtful liability claim.
, ✔✔First-call settlement - ✔✔A settlement made upon the first contact with claimant.
✔✔Drop draft - ✔✔A draft and release sent to the claimant for an amount the
claims representative thinks would settle the claim.
✔✔Advance payment - ✔✔A payment made to a claimant following a loss to cover
the immediate expenses resulting from that loss.
✔✔Lien - ✔✔A creditor's legal right or interest in another's property,
usually lasting until satisfaction of the specific debt or
duty that the lien secures.
✔✔Perfected lien - ✔✔This exists when the insurer responsible for paying the loss
has been formally placed on notice of the lien.
✔✔Medicare liens - ✔✔These can be claimed by the government if circumstances
indicate that the insurer should have known that
Medicare was involved, such as in a claim involving an
elderly person.
✔✔Settlement agreement - ✔✔An oral or a written contract by which parties
compromise a disputed matter. Often a release document
is included with the agreement.
✔✔Offer - ✔✔A promise that requires some action by the intended
recipient to make an agreement.
✔✔Acceptance - ✔✔The assent to an offer that occurs when the party to whom
an offer has been made either agrees to the proposal or
does what has been proposed.
✔✔Consideration - ✔✔Something of value or bargained for and exchanged by the
parties to a contract.
✔✔Release - ✔✔A legally binding contract between the parties to a dispute
that embodies their agreement, obligates each to fulfill
the agreement, and releases both parties from further
obligation to one another that relates to the dispute.
✔✔Covenant not to sue - ✔✔An agreement that states that in exchange for a specified
sum of money, the claimant will not sue one of the joint
tortfeasors.
✔✔Structured settlement - ✔✔An agreement in settlement of a claim involving specific
QUESTIONS SET A+
✔✔Survival action - ✔✔A legal cause of action that existed for the deceased before
his or her death.
✔✔Wrongful death action - ✔✔A legal cause of action that exists for the survivor of the
deceased.
✔✔Pecuniary loss - ✔✔The monetary economic loss of the survivors.
✔✔Household service - ✔✔A service such as cooking or cleaning.
✔✔Intrinsic value of children - ✔✔The assumption that parents make rational financial
decisions in having children, knowing that the investment
in the expense of raising them will provide companionship
and comfort as a return when the children are older.
✔✔Best alternative to a negotiated agreement (BATNA) - ✔✔The most that an insurer
would pay for a loss after
considering all the facts. The claims representative
determines the highest probable award (as from a trial or
arbitration), then adds the costs of the action.
✔✔Expert system (artificial intelligence systems) - ✔✔A software program that
duplicates the decision-making
process.
✔✔Artificial intelligence (AI) - ✔✔Computer processing or output that simulates human
reasoning or knowledge.
✔✔Nuisance settlement - ✔✔A payment made for a nominal amount to conclude a
doubtful liability claim.
, ✔✔First-call settlement - ✔✔A settlement made upon the first contact with claimant.
✔✔Drop draft - ✔✔A draft and release sent to the claimant for an amount the
claims representative thinks would settle the claim.
✔✔Advance payment - ✔✔A payment made to a claimant following a loss to cover
the immediate expenses resulting from that loss.
✔✔Lien - ✔✔A creditor's legal right or interest in another's property,
usually lasting until satisfaction of the specific debt or
duty that the lien secures.
✔✔Perfected lien - ✔✔This exists when the insurer responsible for paying the loss
has been formally placed on notice of the lien.
✔✔Medicare liens - ✔✔These can be claimed by the government if circumstances
indicate that the insurer should have known that
Medicare was involved, such as in a claim involving an
elderly person.
✔✔Settlement agreement - ✔✔An oral or a written contract by which parties
compromise a disputed matter. Often a release document
is included with the agreement.
✔✔Offer - ✔✔A promise that requires some action by the intended
recipient to make an agreement.
✔✔Acceptance - ✔✔The assent to an offer that occurs when the party to whom
an offer has been made either agrees to the proposal or
does what has been proposed.
✔✔Consideration - ✔✔Something of value or bargained for and exchanged by the
parties to a contract.
✔✔Release - ✔✔A legally binding contract between the parties to a dispute
that embodies their agreement, obligates each to fulfill
the agreement, and releases both parties from further
obligation to one another that relates to the dispute.
✔✔Covenant not to sue - ✔✔An agreement that states that in exchange for a specified
sum of money, the claimant will not sue one of the joint
tortfeasors.
✔✔Structured settlement - ✔✔An agreement in settlement of a claim involving specific
