CIC- INSURANCE COMPANY
OPERATIONS- CLAIMS- SEC 5 EXAM
QUESTIONS WITH COMPLETE
SOLUTIONS
Identify the components that should be included in a catastrophe plan - Answer-1. What
is the expected claims volume using a Geographic Information System?
2. What will be the average reserve at claim opening?
3. How do the policyholders contact the insurer and what will be the expected timeframe
for contact by the adjuster?
4. How will insurer notify agents of claims handling procedures for the catastrophe?
5. How will the insurer secure the services of independent adjusters and other vendors
as needed and how will authority be established?
6. How is temporary staff to be trained?
Define hard fraud and soft fraud and state the purpose of an insurer's Special
Investigations Unit - Answer-a. Hard fraud occurs when an insured or a claimant
deliberately plans or creates a loss, such as a theft, fire, slip and fall or other activity that
is covered by an insurance policy in order to receive payment for loss or damage
b. Soft Fraud - occurs when an insured or claimant exaggerates an otherwise legitimate
claim , such as stating additional items were taken in a burglary, exaggerating an injury
that occurs in a legitimate accident, etc. - it is more opportunistic
The Special Investigations Unit For The Insurer:
1. Identifies emerging trends, uncovers suspect claims, and conducts investigations in
an effort to minimize this multi-billion dollar problem
2. With sophisticated technologies and skilled investigators, works to identify, prevent,
and deter suspect claims
3. May be comprised of individuals with experience in both insurance claims handling
techniques, as well as law enforcement
Explain the goals and significance of proper claim reporting, including the various ways
jurisdictions may view late reporting - Answer-a. Timeliness and accuracy - prompt
reporting is essential
1) Ability to stabilize and mitigate quickly
2) Preserve the details for accuracy and completeness
b. The notice requirement is found in the Conditions section of the Policy
c. There may be a coverage issue if the insured does not comply
d. Prompt reporting may be stated as a condition precedent to coverage -
noncompliance negates coverage in some jurisdictions
e. However, other jurisdictions do not enforce this condition in that manner
OPERATIONS- CLAIMS- SEC 5 EXAM
QUESTIONS WITH COMPLETE
SOLUTIONS
Identify the components that should be included in a catastrophe plan - Answer-1. What
is the expected claims volume using a Geographic Information System?
2. What will be the average reserve at claim opening?
3. How do the policyholders contact the insurer and what will be the expected timeframe
for contact by the adjuster?
4. How will insurer notify agents of claims handling procedures for the catastrophe?
5. How will the insurer secure the services of independent adjusters and other vendors
as needed and how will authority be established?
6. How is temporary staff to be trained?
Define hard fraud and soft fraud and state the purpose of an insurer's Special
Investigations Unit - Answer-a. Hard fraud occurs when an insured or a claimant
deliberately plans or creates a loss, such as a theft, fire, slip and fall or other activity that
is covered by an insurance policy in order to receive payment for loss or damage
b. Soft Fraud - occurs when an insured or claimant exaggerates an otherwise legitimate
claim , such as stating additional items were taken in a burglary, exaggerating an injury
that occurs in a legitimate accident, etc. - it is more opportunistic
The Special Investigations Unit For The Insurer:
1. Identifies emerging trends, uncovers suspect claims, and conducts investigations in
an effort to minimize this multi-billion dollar problem
2. With sophisticated technologies and skilled investigators, works to identify, prevent,
and deter suspect claims
3. May be comprised of individuals with experience in both insurance claims handling
techniques, as well as law enforcement
Explain the goals and significance of proper claim reporting, including the various ways
jurisdictions may view late reporting - Answer-a. Timeliness and accuracy - prompt
reporting is essential
1) Ability to stabilize and mitigate quickly
2) Preserve the details for accuracy and completeness
b. The notice requirement is found in the Conditions section of the Policy
c. There may be a coverage issue if the insured does not comply
d. Prompt reporting may be stated as a condition precedent to coverage -
noncompliance negates coverage in some jurisdictions
e. However, other jurisdictions do not enforce this condition in that manner
