AIC-M EXAM QUESTIONS AND ANSWERS
Which one of the following expresses how the mission statement usually differs from a
vision statement? - Answers-A vision statement focuses on the future, while the mission
statement focuses on the present.
Which one of the following explains how organizational structures change over time? -
Answers-Organizational structures respond to internal growth, profit goals, and the
external environment.
Which one of the following explains why communication to employees is critical to any
organization? - Answers-Communication is critical to alignment in any organization.
Communication that is a continuous effort encouraging employee investment is similar
to a targeted marketing campaign creating awareness and affecting employee behavior.
Which one of the following describes how the culture and management style of an
organization affects its communications? - Answers-Organizational culture determines
the style of communications. Organizations with a delegatory style of management will
provide communications that are broad and strategic, allowing employees to create their
own way of achieving goals. Directive managers will tell others what to do. Supportive
management will explain the rationale for goals and encourage employees to pursue
related endeavors.
Providing flexible work schedules is an effective way for a manager to - Answers-Meet
employees' work-life balance needs.
Change initiatives should be divided into defined stages to allow the organization to
implement and adapt the change incrementally. To motivate the employees, successful
implementation of each stage should - Answers-Be rewarded with some type of
celebration.
In the mid-'90s, Daniel Goleman popularized the concept of emotional intelligence. He
used the term "empathy" to describe one's ability to - Answers-Understand and develop
others by acknowledging their feelings, concerns, perspectives, and developmental
needs.
Team members in successful process-oriented organizations trust each other, share
sacrifices, and coach and learn from each other. This is because - Answers-Team
members are equally accountable for the team's output.
The primary purpose of the claims function is to - Answers-Fulfill the insurer's promise.
Which one of the following statements is correct with respect to claimants'
representation by lawyers? - Answers-For some types of claims and in certain areas of
the U.S., claimants are more likely to hire lawyers.
,Which one of the following statements is correct regarding the marketing value of the
claim function? - Answers-The claim adjusting process can be a source of new
coverage ideas and product niche innovations.
Which one of the following statements is correct regarding the relationship between risk
control and claims? - Answers-The risk control department needs claim experience
information to direct loss-control resources and efforts to crucial areas.
Risk control can assist premium auditing by - Answers-Reporting the existence of new
operations.
Late one night, a car ran into Becky's parked car, and when she came out of her house,
the car backed up and left the scene. Candice, the claim representative, asks Becky if
she remembers anything specific about the car. Becky replies that it was blue. Candice
notes the description and thanks Becky for her help. A desirable quality that Candice
could improve on the most is - Answers-Inquisitiveness.
Based on the age-to-age development factors in the table below, which one of the
following represents the factor that would be used to develop losses that are 12 months
from maturity? Assume that the analyst would use the average factors.
AccidentMonths of DevelopmentYear12-2424-3636-Final11.1001.0910.95821.1671.048
31.143 4- Average1.1371.0700.958 - Answers-0.958
Which one of the following statements is true regarding the establishment of loss
reserves? - Answers-Case reserves are established by the claim department while
IBNR reserves are established by actuaries.
Which one of the following is an example of the "we find you" approach to soliciting
candidates for employment? - Answers-Collaborating with an executive search firm
In determining employee results and behaviors through job analysis, each set of KSAs
(Knowledge, Skills and Attitudes) should be described in terms that suggest a way to -
Answers-Measure or quantify them.
A 360-degree feedback system employs self-evaluation and peer appraisals delivered
through - Answers-Anonymous employee surveys.
The most loyal employees are those who - Answers-Believe in the organization's
mission.
In a high-functioning virtual team, the role of the manager is best described as that of a -
Answers-Facilitator.
Encouraging data sharing among teams and measuring an employee's teamwork are
ways for a manager to foster - Answers-Employee unity.
,Which one of the following is an example of an external stakeholder that does not have
a business relationship with an organization? - Answers-Competitors
China is an example of a country where it may be difficult for actuaries to determine
appropriate financial reserves due to which one of the following? - Answers-Lack of
historical data.
In establishing a global claims function, the staff will likely be hired in the country of
operations with the possible exception of - Answers-Senior Managers.
Difficulty in direct supervision, communication issues and the time and cost of in-person
meetings are all challenges presented by - Answers-Remote reporting relationships.
An insurer must plan to communicate its claim philosophy effectively before the plan will
have the intended results. An effectively communicated plan is one that receives buy-in
from the claims professionals, changes intended behaviors, and - Answers-Improves
performance.
Insurers define a claims philosophy as part of managing the claims function. Which one
of the following components of the claims philosophy ensures the philosophy is not
vague and that it is understood by the organization? - Answers-Clear message
Claims processes dictate how the organization's resources should be utilized in support
of its claims philosophies. Organizations must prioritize claims processes because -
Answers-Most organizations do not have the resources to support every process.
A claims department's optimal reporting structure should give claims representatives the
authority to make decisions while - Answers-Providing the appropriate level of
supervision to allow them to succeed.
Claims managers perform staffing analyses to determine the ideal number of claims
representatives for a department. One of the factors that may be considered in this
analysis is level of experience because - Answers-The higher the level of a
representative's experience, the higher that person's level of efficiency in adjusting
claims is likely to be.
Which one of the following is essential to maintaining the quality of a claims department
and contributes to a claims representative's feelings of job satisfaction and
empowerment? - Answers-Training.
Which one of the following identifies a benefit to the insurer of having customer-focused
claims representatives who provide better customer service than competitors? -
Answers-Increased customer retention
Marilyn is a new employee at Major Indemnity Insurance Company. Shortly after
beginning her job, she was rebuked by an underwriter for asking questions that the
, underwriter felt were not related to her job as a claims representative. Marilyn explained
to her supervisor, Ed, that at her previous employer, the claims representatives were
encouraged to challenge coworkers in other departments and to foster teamwork by
making group decisions. Marilyn asked Ed if she could form a committee to help foster
communications between the departments, and Ed agreed. Marilyn is attempting to
improve her company's claims - Answers-Culture.
The first step in the strategic management process is strategy formation. Strategy
formation usually begins with - Answers-Analysis of the organization's internal and
external environments.
The third stage of the strategic management process is - Answers-Strategy evaluation
or control.
Jeff Hartwell, CEO of a large manufacturing firm, has called together the firm's top
executives to discuss the firm's competitive strategy. Jeff believes that managers from
all functions should be included in the process; he welcomes critical thinking and
constructive criticism from the group and values minority views so that all managers will
have a sense of ownership in the firm's strategy. Which one of the following best
describes Jeff's approach to strategic decision-making? - Answers-An inquiry approach.
Joe's Java is a chain of corporate-owned stores that serve only coffee and pastries.
Joe's has adopted a no-frills approach to business. In order to keep overhead low, the
company often switches suppliers to obtain the lowest prices and it offers few benefits
to employees. Joe's slogan is: "Good coffee shouldn't be a luxury." Joe's business-level
marking strategy is best defined as - Answers-A focused cost leadership strategy.
If a customer or potential customer posts a negative comment or product review on an
organization's social media venue, the best way for the organization to protect the brand
is to - Answers-To courteously reply to the poster to seek more information, address
concerns, or offer solutions.
Daniel has developed a business continuity plan to address the threat of the loss of
utility services at his company's large manufacturing plant. The management team has
reviewed his plan and agrees that the plan can be quickly read and understood and
should be effective in the event of a crisis. Daniel has provided copies of the plan to all
relevant parties. Which one of the following should be Daniel's next step? - Answers-
Provide training and periodic rehearsals of the procedures
Meat Products Company (MPC) runs packing plants in three Midwest states. The
company was in the news recently because of its labor practices. The Department of
Labor (DOL) investigated complaints from five female employees that MPC
discriminated against them. The DOL found the claim was true. The Immigration and
Naturalization Service (INS) found that the company employed illegal immigrants and
paid them less than the minimum wage. When this news became public, MPC's
Which one of the following expresses how the mission statement usually differs from a
vision statement? - Answers-A vision statement focuses on the future, while the mission
statement focuses on the present.
Which one of the following explains how organizational structures change over time? -
Answers-Organizational structures respond to internal growth, profit goals, and the
external environment.
Which one of the following explains why communication to employees is critical to any
organization? - Answers-Communication is critical to alignment in any organization.
Communication that is a continuous effort encouraging employee investment is similar
to a targeted marketing campaign creating awareness and affecting employee behavior.
Which one of the following describes how the culture and management style of an
organization affects its communications? - Answers-Organizational culture determines
the style of communications. Organizations with a delegatory style of management will
provide communications that are broad and strategic, allowing employees to create their
own way of achieving goals. Directive managers will tell others what to do. Supportive
management will explain the rationale for goals and encourage employees to pursue
related endeavors.
Providing flexible work schedules is an effective way for a manager to - Answers-Meet
employees' work-life balance needs.
Change initiatives should be divided into defined stages to allow the organization to
implement and adapt the change incrementally. To motivate the employees, successful
implementation of each stage should - Answers-Be rewarded with some type of
celebration.
In the mid-'90s, Daniel Goleman popularized the concept of emotional intelligence. He
used the term "empathy" to describe one's ability to - Answers-Understand and develop
others by acknowledging their feelings, concerns, perspectives, and developmental
needs.
Team members in successful process-oriented organizations trust each other, share
sacrifices, and coach and learn from each other. This is because - Answers-Team
members are equally accountable for the team's output.
The primary purpose of the claims function is to - Answers-Fulfill the insurer's promise.
Which one of the following statements is correct with respect to claimants'
representation by lawyers? - Answers-For some types of claims and in certain areas of
the U.S., claimants are more likely to hire lawyers.
,Which one of the following statements is correct regarding the marketing value of the
claim function? - Answers-The claim adjusting process can be a source of new
coverage ideas and product niche innovations.
Which one of the following statements is correct regarding the relationship between risk
control and claims? - Answers-The risk control department needs claim experience
information to direct loss-control resources and efforts to crucial areas.
Risk control can assist premium auditing by - Answers-Reporting the existence of new
operations.
Late one night, a car ran into Becky's parked car, and when she came out of her house,
the car backed up and left the scene. Candice, the claim representative, asks Becky if
she remembers anything specific about the car. Becky replies that it was blue. Candice
notes the description and thanks Becky for her help. A desirable quality that Candice
could improve on the most is - Answers-Inquisitiveness.
Based on the age-to-age development factors in the table below, which one of the
following represents the factor that would be used to develop losses that are 12 months
from maturity? Assume that the analyst would use the average factors.
AccidentMonths of DevelopmentYear12-2424-3636-Final11.1001.0910.95821.1671.048
31.143 4- Average1.1371.0700.958 - Answers-0.958
Which one of the following statements is true regarding the establishment of loss
reserves? - Answers-Case reserves are established by the claim department while
IBNR reserves are established by actuaries.
Which one of the following is an example of the "we find you" approach to soliciting
candidates for employment? - Answers-Collaborating with an executive search firm
In determining employee results and behaviors through job analysis, each set of KSAs
(Knowledge, Skills and Attitudes) should be described in terms that suggest a way to -
Answers-Measure or quantify them.
A 360-degree feedback system employs self-evaluation and peer appraisals delivered
through - Answers-Anonymous employee surveys.
The most loyal employees are those who - Answers-Believe in the organization's
mission.
In a high-functioning virtual team, the role of the manager is best described as that of a -
Answers-Facilitator.
Encouraging data sharing among teams and measuring an employee's teamwork are
ways for a manager to foster - Answers-Employee unity.
,Which one of the following is an example of an external stakeholder that does not have
a business relationship with an organization? - Answers-Competitors
China is an example of a country where it may be difficult for actuaries to determine
appropriate financial reserves due to which one of the following? - Answers-Lack of
historical data.
In establishing a global claims function, the staff will likely be hired in the country of
operations with the possible exception of - Answers-Senior Managers.
Difficulty in direct supervision, communication issues and the time and cost of in-person
meetings are all challenges presented by - Answers-Remote reporting relationships.
An insurer must plan to communicate its claim philosophy effectively before the plan will
have the intended results. An effectively communicated plan is one that receives buy-in
from the claims professionals, changes intended behaviors, and - Answers-Improves
performance.
Insurers define a claims philosophy as part of managing the claims function. Which one
of the following components of the claims philosophy ensures the philosophy is not
vague and that it is understood by the organization? - Answers-Clear message
Claims processes dictate how the organization's resources should be utilized in support
of its claims philosophies. Organizations must prioritize claims processes because -
Answers-Most organizations do not have the resources to support every process.
A claims department's optimal reporting structure should give claims representatives the
authority to make decisions while - Answers-Providing the appropriate level of
supervision to allow them to succeed.
Claims managers perform staffing analyses to determine the ideal number of claims
representatives for a department. One of the factors that may be considered in this
analysis is level of experience because - Answers-The higher the level of a
representative's experience, the higher that person's level of efficiency in adjusting
claims is likely to be.
Which one of the following is essential to maintaining the quality of a claims department
and contributes to a claims representative's feelings of job satisfaction and
empowerment? - Answers-Training.
Which one of the following identifies a benefit to the insurer of having customer-focused
claims representatives who provide better customer service than competitors? -
Answers-Increased customer retention
Marilyn is a new employee at Major Indemnity Insurance Company. Shortly after
beginning her job, she was rebuked by an underwriter for asking questions that the
, underwriter felt were not related to her job as a claims representative. Marilyn explained
to her supervisor, Ed, that at her previous employer, the claims representatives were
encouraged to challenge coworkers in other departments and to foster teamwork by
making group decisions. Marilyn asked Ed if she could form a committee to help foster
communications between the departments, and Ed agreed. Marilyn is attempting to
improve her company's claims - Answers-Culture.
The first step in the strategic management process is strategy formation. Strategy
formation usually begins with - Answers-Analysis of the organization's internal and
external environments.
The third stage of the strategic management process is - Answers-Strategy evaluation
or control.
Jeff Hartwell, CEO of a large manufacturing firm, has called together the firm's top
executives to discuss the firm's competitive strategy. Jeff believes that managers from
all functions should be included in the process; he welcomes critical thinking and
constructive criticism from the group and values minority views so that all managers will
have a sense of ownership in the firm's strategy. Which one of the following best
describes Jeff's approach to strategic decision-making? - Answers-An inquiry approach.
Joe's Java is a chain of corporate-owned stores that serve only coffee and pastries.
Joe's has adopted a no-frills approach to business. In order to keep overhead low, the
company often switches suppliers to obtain the lowest prices and it offers few benefits
to employees. Joe's slogan is: "Good coffee shouldn't be a luxury." Joe's business-level
marking strategy is best defined as - Answers-A focused cost leadership strategy.
If a customer or potential customer posts a negative comment or product review on an
organization's social media venue, the best way for the organization to protect the brand
is to - Answers-To courteously reply to the poster to seek more information, address
concerns, or offer solutions.
Daniel has developed a business continuity plan to address the threat of the loss of
utility services at his company's large manufacturing plant. The management team has
reviewed his plan and agrees that the plan can be quickly read and understood and
should be effective in the event of a crisis. Daniel has provided copies of the plan to all
relevant parties. Which one of the following should be Daniel's next step? - Answers-
Provide training and periodic rehearsals of the procedures
Meat Products Company (MPC) runs packing plants in three Midwest states. The
company was in the news recently because of its labor practices. The Department of
Labor (DOL) investigated complaints from five female employees that MPC
discriminated against them. The DOL found the claim was true. The Immigration and
Naturalization Service (INS) found that the company employed illegal immigrants and
paid them less than the minimum wage. When this news became public, MPC's
