AIC 300 exam with correct answers
Indemnify |- |correct |answer |-To |restore |a |party |who |has |sustained |a |loss |to |the |same |financial
|position |that |party |held |before |the |loss |occurred.
Third-party |administrator |(TPA) |- |correct |answer |-An |organization |that |provides |administrative
|services |associated |with |risk |financing |and |insurance.
Claims |representative |- |correct |answer |-A |person |responsible |for |investigating, |evaluating, |and
|settling |claims.
Public |adjuster |- |correct |answer |-An |outside |organization |or |person |hired |by |an |insured |to
|represent |the |insured |in |a |claim |in |exchange |for |a |fee.
Premium |audit |- |correct |answer |-Methodical |examination |of |a |policyholder's |operations, |records,
|and |books |of |account |to |determine |the |actual |exposure |units |and |premium |for |insurance
|coverages |already |provided.
Quantitative |Audit |Factors |- |correct |answer |-Timeliness |of |reports, |reserving |and |payments
Qualitative |Audit |Factors |- |correct |answer |-Realistic |reserving, |accurate |evaluation |of |insured's
|liability |and |follow-up |on |subrogation |opportunity
Loss |ratio |- |correct |answer |-A |ratio |that |measures |losses |and |loss |adjustment |expenses |against
|earned |premiums |and |that |reflects |the |percentage |of |premiums |being |consumed |by |losses.
Loss |adjustment |expense |(LAE) |- |correct |answer |-The |expense |that |an |insurer |incurs |to |investigate,
|defend, |and |settle |claims |according |to |the |terms |specified |in |the |insurance |policy.
Aaron |works |for |a |multi-line |insurer. |He |works |with |insurance |producers |and |applicants |to |evaluate
|new |business |submissions |and |conduct |renewal |underwriting. |Aaron |is |a
,A. |Personal |lines |underwriter.
B. |Line |underwriter.
C. |Staff |underwriter.
D. |Public |underwriter. |- |correct |answer |-B. |Line |underwriter.
This |describes |the |duties |of |a |line |underwriter, |rather |than |a |staff |underwriter. |There |is |not |enough
|information |to |determine |which |line |of |business |is |being |written. |A |public |underwriter |does |not
|exist. |Line |underwriters |evaluate |new |submissions |and |perform |renewal |underwriting, |usually |by
|working |directly |with |insurance |producers |and |applicants. |Staff |underwriters, |meanwhile, |manage
|risk |selection |by |working |with |line |underwriters |and |coordinating |decisions |about |products, |pricing
|and |guidelines.
Hugo |is |conducting |an |audit |of |a |branch |office |claims |operation. |He |is |evaluating |timeliness |of
|reports, |number |of |files |opened, |proper |releases |taken, |and |accuracy |of |data |entry. |Which |one |of
|Hugo's |metrics |is |a |qualitative |audit |factor?
A. |Number |of |files |opened
B. |Timeliness |of |reports
C. |Accuracy |of |data |entry
D. |Proper |releases |taken |- |correct |answer |-D. |Proper |releases |taken
Which |one |of |the |following |statements |regarding |third-party |administrators |(TPAs) |is |most
|accurate?
A. |TPAs |handle |claims, |keep |claims |records, |and |perform |statistical |analyses.
B. |TPAs |are |generally |found |in |an |insurer's |claims |department.
C. |TPAs |are |typically |used |by |businesses |that |have |chosen |not |to |self-insure.
D. |TPAs |are |employed |only |by |independent |adjusting |firms. |- |correct |answer |-A. |TPAs |handle
|claims, |keep |claims |records, |and |perform |statistical |analyses.
Steps |of |Making |an |Initial |Claims |Assessment |- |correct |answer |-Acknowledging |and |Assigning |the
|Claim
,Identifying |the |Policy
Contacting |the |Insured |or |the |Insured's |Representative
How |do |recorded |statements |and |examinations |under |oath |differ? |- |correct |answer |-An
|examination |under |oath |is |more |formal |than |a |recorded |statement. |Recorded |statements |are |often
|taken |by |claims |representatives, |typically |by |telephone. |Examinations |under |oath |are |usually
|performed |by |an |attorney |for |the |insurer |at |the |insurer's |office |or |a |court |reporter's |office.
Effective |statements |exhibit |these |qualities: |- |correct |answer |-Coherence—The |statement |follows |a
|logical |sequence.
Completeness—The |statement |is |thorough.
Objectivity—The |statement |contains |facts |relevant |to |the |loss |expressed |in |the |interviewee's |own
|words.
Seven-Part |Method |- |correct |answer |-1. |Permission |and |introduction—date, |time, |and |location |of
|the |interview, |names |of |the |parties |involved |in |the |interview, |and |an |affirmation |from |the
|interviewee |that |the |interview |is |given |with |permission
2. |Identification—identifying |information |about |the |person |being |interviewed, |such |as |name,
|address, |phone |number, |and |driver's |license |number
3. |Setting—answers |to |questions |such |as |who |was |involved |in |the |loss, |what |was |involved |in |the
|loss, |when |the |loss |occurred, |where |the |loss |occurred, |and |why |the |loss |occurred
4. |Incident—a |step-by-step |description |of |how |the |loss |occurred
5. |Post |incident |injuries/damages—description |of |the |property |damage |and |bodily |injuries |to
|individuals
6. |Miscellaneous—any |information |the |interviewee |wants |to |add
7. |Conclusion—reaffirmation |that |the |statement |was |taken |with |permission
, Reserve |- |correct |answer |-The |amount |the |insurer |estimates |and |sets |aside |to |pay |on |an |existing
|claim.
Individual |case |method |- |correct |answer |-a |method |of |setting |reserves |based |on |the |claim's
|circumstances |and |the |claim |representative's |experience |in |handling |similar |claims
Roundtable |method |- |correct |answer |-A |method |of |setting |reserves |by |using |the |consensus |of |two
|or |more |claim |personnel |who |have |independently |evaluated |the |claim |file
Average |value |method |- |correct |answer |-A |case |reserving |method |that |establishes |a |predetermined
|dollar |amount |of |reserve |for |each |claim |as |it |is |reported.
Formula |method |- |correct |answer |-A |method |of |setting |claim |reserves |by |using |a |mathematical
|formula.
Expert |system |method |- |correct |answer |-A |method |of |setting |reserves |with |a |software |application
|that |estimates |losses |and |loss |adjustment |expenses.
Carolina |is |a |claim |representative |handling |a |liability |claim. |She |is |speaking |to |the |claimant |over
|the |phone |and |has |informed |him |that |his |statements |must |be |true |under |penalty |of |perjury. |When
|completed, |she |sent |a |transcription |of |the |conversation |to |the |claimant |for |him |to |sign |before |a
|notary. |Carolina |has |taken |a(n) |- |correct |answer |-Recorded |statement
Which |one |of |the |following |methods |of |establishing |case |reserves |is |used |most |often |when |there
|are |small |variations |in |loss |size |for |a |particular |type |of |claim?
A. |Roundtable |method
B. |Average |value |method
C. |Formula |method
D. |Individual |case |method |- |correct |answer |-B. |Average |value |method
Indemnify |- |correct |answer |-To |restore |a |party |who |has |sustained |a |loss |to |the |same |financial
|position |that |party |held |before |the |loss |occurred.
Third-party |administrator |(TPA) |- |correct |answer |-An |organization |that |provides |administrative
|services |associated |with |risk |financing |and |insurance.
Claims |representative |- |correct |answer |-A |person |responsible |for |investigating, |evaluating, |and
|settling |claims.
Public |adjuster |- |correct |answer |-An |outside |organization |or |person |hired |by |an |insured |to
|represent |the |insured |in |a |claim |in |exchange |for |a |fee.
Premium |audit |- |correct |answer |-Methodical |examination |of |a |policyholder's |operations, |records,
|and |books |of |account |to |determine |the |actual |exposure |units |and |premium |for |insurance
|coverages |already |provided.
Quantitative |Audit |Factors |- |correct |answer |-Timeliness |of |reports, |reserving |and |payments
Qualitative |Audit |Factors |- |correct |answer |-Realistic |reserving, |accurate |evaluation |of |insured's
|liability |and |follow-up |on |subrogation |opportunity
Loss |ratio |- |correct |answer |-A |ratio |that |measures |losses |and |loss |adjustment |expenses |against
|earned |premiums |and |that |reflects |the |percentage |of |premiums |being |consumed |by |losses.
Loss |adjustment |expense |(LAE) |- |correct |answer |-The |expense |that |an |insurer |incurs |to |investigate,
|defend, |and |settle |claims |according |to |the |terms |specified |in |the |insurance |policy.
Aaron |works |for |a |multi-line |insurer. |He |works |with |insurance |producers |and |applicants |to |evaluate
|new |business |submissions |and |conduct |renewal |underwriting. |Aaron |is |a
,A. |Personal |lines |underwriter.
B. |Line |underwriter.
C. |Staff |underwriter.
D. |Public |underwriter. |- |correct |answer |-B. |Line |underwriter.
This |describes |the |duties |of |a |line |underwriter, |rather |than |a |staff |underwriter. |There |is |not |enough
|information |to |determine |which |line |of |business |is |being |written. |A |public |underwriter |does |not
|exist. |Line |underwriters |evaluate |new |submissions |and |perform |renewal |underwriting, |usually |by
|working |directly |with |insurance |producers |and |applicants. |Staff |underwriters, |meanwhile, |manage
|risk |selection |by |working |with |line |underwriters |and |coordinating |decisions |about |products, |pricing
|and |guidelines.
Hugo |is |conducting |an |audit |of |a |branch |office |claims |operation. |He |is |evaluating |timeliness |of
|reports, |number |of |files |opened, |proper |releases |taken, |and |accuracy |of |data |entry. |Which |one |of
|Hugo's |metrics |is |a |qualitative |audit |factor?
A. |Number |of |files |opened
B. |Timeliness |of |reports
C. |Accuracy |of |data |entry
D. |Proper |releases |taken |- |correct |answer |-D. |Proper |releases |taken
Which |one |of |the |following |statements |regarding |third-party |administrators |(TPAs) |is |most
|accurate?
A. |TPAs |handle |claims, |keep |claims |records, |and |perform |statistical |analyses.
B. |TPAs |are |generally |found |in |an |insurer's |claims |department.
C. |TPAs |are |typically |used |by |businesses |that |have |chosen |not |to |self-insure.
D. |TPAs |are |employed |only |by |independent |adjusting |firms. |- |correct |answer |-A. |TPAs |handle
|claims, |keep |claims |records, |and |perform |statistical |analyses.
Steps |of |Making |an |Initial |Claims |Assessment |- |correct |answer |-Acknowledging |and |Assigning |the
|Claim
,Identifying |the |Policy
Contacting |the |Insured |or |the |Insured's |Representative
How |do |recorded |statements |and |examinations |under |oath |differ? |- |correct |answer |-An
|examination |under |oath |is |more |formal |than |a |recorded |statement. |Recorded |statements |are |often
|taken |by |claims |representatives, |typically |by |telephone. |Examinations |under |oath |are |usually
|performed |by |an |attorney |for |the |insurer |at |the |insurer's |office |or |a |court |reporter's |office.
Effective |statements |exhibit |these |qualities: |- |correct |answer |-Coherence—The |statement |follows |a
|logical |sequence.
Completeness—The |statement |is |thorough.
Objectivity—The |statement |contains |facts |relevant |to |the |loss |expressed |in |the |interviewee's |own
|words.
Seven-Part |Method |- |correct |answer |-1. |Permission |and |introduction—date, |time, |and |location |of
|the |interview, |names |of |the |parties |involved |in |the |interview, |and |an |affirmation |from |the
|interviewee |that |the |interview |is |given |with |permission
2. |Identification—identifying |information |about |the |person |being |interviewed, |such |as |name,
|address, |phone |number, |and |driver's |license |number
3. |Setting—answers |to |questions |such |as |who |was |involved |in |the |loss, |what |was |involved |in |the
|loss, |when |the |loss |occurred, |where |the |loss |occurred, |and |why |the |loss |occurred
4. |Incident—a |step-by-step |description |of |how |the |loss |occurred
5. |Post |incident |injuries/damages—description |of |the |property |damage |and |bodily |injuries |to
|individuals
6. |Miscellaneous—any |information |the |interviewee |wants |to |add
7. |Conclusion—reaffirmation |that |the |statement |was |taken |with |permission
, Reserve |- |correct |answer |-The |amount |the |insurer |estimates |and |sets |aside |to |pay |on |an |existing
|claim.
Individual |case |method |- |correct |answer |-a |method |of |setting |reserves |based |on |the |claim's
|circumstances |and |the |claim |representative's |experience |in |handling |similar |claims
Roundtable |method |- |correct |answer |-A |method |of |setting |reserves |by |using |the |consensus |of |two
|or |more |claim |personnel |who |have |independently |evaluated |the |claim |file
Average |value |method |- |correct |answer |-A |case |reserving |method |that |establishes |a |predetermined
|dollar |amount |of |reserve |for |each |claim |as |it |is |reported.
Formula |method |- |correct |answer |-A |method |of |setting |claim |reserves |by |using |a |mathematical
|formula.
Expert |system |method |- |correct |answer |-A |method |of |setting |reserves |with |a |software |application
|that |estimates |losses |and |loss |adjustment |expenses.
Carolina |is |a |claim |representative |handling |a |liability |claim. |She |is |speaking |to |the |claimant |over
|the |phone |and |has |informed |him |that |his |statements |must |be |true |under |penalty |of |perjury. |When
|completed, |she |sent |a |transcription |of |the |conversation |to |the |claimant |for |him |to |sign |before |a
|notary. |Carolina |has |taken |a(n) |- |correct |answer |-Recorded |statement
Which |one |of |the |following |methods |of |establishing |case |reserves |is |used |most |often |when |there
|are |small |variations |in |loss |size |for |a |particular |type |of |claim?
A. |Roundtable |method
B. |Average |value |method
C. |Formula |method
D. |Individual |case |method |- |correct |answer |-B. |Average |value |method
