AIC 30 Exam Study Guide Solutions

AIC 30 Exam Study Guide Solutions First Party Focus - ANSWER-Coverage and Amount of damage Second Party - ANSWER-Insurance Company First Party - ANSWER-Insured Third Party - ANSWER-Claimant Third Party Focus - ANSWER-Liability, Coverage, and Amount of damage Third Party Administrator (TPA) - ANSWER-an organization that provides admin services associated with risk financing and insurance. They handle claims and risk management for self-insured organizations Independent Adjuster - ANSWER-handles claims for the insurer for a fee. Works for the insurer Public Adjuster - ANSWER-an outside organization that is hired by the insured to represent the insured in the claim for a fee. Works for the public Quantitative Measures - ANSWER-can have actual numbers assigned, such as number of claims opened and percentage of subrogation recovery ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 2/18 Qualitative Measures - ANSWER-related to intangible measures. nothing concrete, did they do a good job? do they have good negotiation skills? Ethics - ANSWER-the study of what constitutes good and bad behavior, dealing with the moral duty and obligation Conflict of Interest - ANSWER-a situation that occurs when a decision makers personal interests interfere to the extent that he/she makes decisions that adversely affect the customer, claimant, or employer Ex Parte Contract - ANSWER-contracts in which only 1 party is heard. discussing the claim with the represented person without benefit of their attorney being involved. this is not illegal, but its not ethical. Fraud - ANSWER-an intentional misrepresentation resulting in harm to another person or organization Code of Ethics - ANSWER-professional guidelines of behavior within an organization or profession N.A.I.C - ANSWER-The National Association of Insurance Commissioners Model Laws - ANSWER-NAIC develops that they feel is an appropriate law related to insurance/risk management Model Laws - Goal - ANSWER-to standardize the laws related to insurance, to address issues related to insurance ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 3/18 Unfair Claims Settlement Practice Act - ANSWER-to prevent insurance companies from taking unfair advantage of the insured/claimants Reservations of Rights Letter - ANSWER-an insurer's letter that specifies coverage issues and informs the insured that the insurer is handling a claim with the understanding that the insurer may later deny coverage should the facts warrant it. Waiver - ANSWER-the intentional/unintentional relinquishing (give up) of a known right. (written, verbally, or by actions taken) Estoppel - ANSWER-a legal principal that prohibits a party from asserting a claim or a right once it has been waived and the other party relied upon that information to their detriment. Non Waiver Agreement - ANSWER-a signed agreement indicating that during the course of the investigation, neither the insurer nor the insured waives their rights under the policy, the insured is to sign and return the agreement Legal Liability - ANSWER-the legally enforceable obligation for a person or organization to pay a sum of money (damages) to another person or organization Statutory Law - ANSWER-the formal law or statutes enacted by legislative bodies such as congress, the state legislature, the Senate, or the town council ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 4/18 Negligence - ANSWER-the failure to exercise due care that a reasonable person would do in a similar situation to avoid harming others Four Parts of Negligence - ANSWER-- a duty owed to protect (or not go out of your way to harm) another party. - a breach of that duty - damage or injury occurs, - the damage or injury was a direct result of the breach of the duty. Contributory Negligence - ANSWER-a common-law principal that prevents a person who has been harmed from recovering damages if that person's own negligence in any way contributed to the harm Comparative Negligence - ANSWER-a common-law principal that requires both parties to a loss to share in the financial burden of the bodily injury or property damage according to their respective degrees of fault. Strict Liability - ANSWER-what you are doing is so inherently dangerous, if anything goes wrong you are held liable. You may have done everything you can to protect the others, but if anything goes wrong, you still pay. Intentional torts - ANSWER-doing something on purpose to harm