CPCU 520 Chapter 6 Practice Questions with Answers

What is the primary goal of the claims function complying with the contractual promise to pay losses that are covered by the policy and supporting the insurer's financial goals What is the difference between a 1st party claim and a 3rd party claim? 1st party claims are made by the insured directly against the insurer. 3rd party claims are made indirectly by someone against the insured to whom the insured might be liable Describe how claims managers can help maintain an insurer's underwriting profit by managing all claim function expenses, setting appropriate spending policies, and using appropriately priced providers and services Describe the marketing department's need for claim information information about customer satisfaction and timeliness of settlements assist in marketing the insurer's product. What are actions an underwriter might take when a claim rep reports either a positive or negative loss characteristic found during a claim investigation the underwriter may adjust the premium or take other actions to accommodate the difference in the exposure in response to loss exposure characteristics found during the investigation Describe the result for actuaries when claim payments are recorded accurately and realistic reserves are set. the raw data that actuaries use to develop rates will be accurate and the rates will reflect the insurer's loss experience. what are 3 circumstances where claims reps interact with state insurance regulators when regulators license claim reps, investigate consumer complaints, and perform market conduct investigations. third party claims administrators TPA's handle claims, keep claims records, and perform statistical analyses. They are often associated with large independent adjusting firms or with subsidiaries of insurance companies what are the two types of performance measures used to evaluate a claims department's performance profitability measures and quality measures identify 3 purposes of claims guidelines training new claims personnel, a reference for when one employee must perform another employees duties, and they are useful when an insurer must defend a bad-faith lawsuit.