AIC-M EXAM QUESTIONS WITH CORRECT
ANSWERS 2025/2026 A+ GRADED 100%
VERIFIED
Which one of the following expresses how the mission statement usually differs from a vision
statement? - ANS-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? -
ANS-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? - ANS-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? - ANS-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 - ANS-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 - ANS-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 - ANS-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 - ANS-Team members are equally
accountable for the team's output.
,The primary purpose of the claims function is to - ANS-Fulfill the insurer's promise.
Which one of the following statements is correct with respect to claimants' representation by
lawyers? - ANS-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? - ANS-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? - ANS-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 - ANS-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 -
ANS-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 - ANS-0.958
Which one of the following statements is true regarding the establishment of loss reserves? -
ANS-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? - ANS-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 -
ANS-Measure or quantify them.
A 360-degree feedback system employs self-evaluation and peer appraisals delivered through -
ANS-Anonymous employee surveys.
The most loyal employees are those who - ANS-Believe in the organization's mission.
,In a high-functioning virtual team, the role of the manager is best described as that of a -
ANS-Facilitator.
Encouraging data sharing among teams and measuring an employee's teamwork are ways for a
manager to foster - ANS-Employee unity.
Which one of the following is an example of an external stakeholder that does not have a
business relationship with an organization? - ANS-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? - ANS-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 - ANS-Senior Managers.
Difficulty in direct supervision, communication issues and the time and cost of in-person
meetings are all challenges presented by - ANS-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 - ANS-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? - ANS-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 - ANS-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 - ANS-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 - ANS-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? -
ANS-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? - ANS-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 - ANS-Culture.
The first step in the strategic management process is strategy formation. Strategy formation
usually begins with - ANS-Analysis of the organization's internal and external environments.
The third stage of the strategic management process is - ANS-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? - ANS-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 - ANS-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 -
ANS-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? - ANS-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
ANSWERS 2025/2026 A+ GRADED 100%
VERIFIED
Which one of the following expresses how the mission statement usually differs from a vision
statement? - ANS-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? -
ANS-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? - ANS-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? - ANS-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 - ANS-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 - ANS-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 - ANS-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 - ANS-Team members are equally
accountable for the team's output.
,The primary purpose of the claims function is to - ANS-Fulfill the insurer's promise.
Which one of the following statements is correct with respect to claimants' representation by
lawyers? - ANS-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? - ANS-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? - ANS-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 - ANS-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 -
ANS-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 - ANS-0.958
Which one of the following statements is true regarding the establishment of loss reserves? -
ANS-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? - ANS-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 -
ANS-Measure or quantify them.
A 360-degree feedback system employs self-evaluation and peer appraisals delivered through -
ANS-Anonymous employee surveys.
The most loyal employees are those who - ANS-Believe in the organization's mission.
,In a high-functioning virtual team, the role of the manager is best described as that of a -
ANS-Facilitator.
Encouraging data sharing among teams and measuring an employee's teamwork are ways for a
manager to foster - ANS-Employee unity.
Which one of the following is an example of an external stakeholder that does not have a
business relationship with an organization? - ANS-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? - ANS-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 - ANS-Senior Managers.
Difficulty in direct supervision, communication issues and the time and cost of in-person
meetings are all challenges presented by - ANS-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 - ANS-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? - ANS-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 - ANS-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 - ANS-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 - ANS-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? -
ANS-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? - ANS-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 - ANS-Culture.
The first step in the strategic management process is strategy formation. Strategy formation
usually begins with - ANS-Analysis of the organization's internal and external environments.
The third stage of the strategic management process is - ANS-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? - ANS-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 - ANS-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 -
ANS-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? - ANS-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
