AIC 30: 1-3 Practice Qs || 100% Correct Solutions.
Some jurisdictions have found certain practices in claim handling to be the unauthorized practice
of law. An typical example is correct answers Providing direction on legal strategies.
When a severe hurricane comes ashore in the southeast, the wind and water damage are
extensive. Best Insurance Company's regional claim office is overwhelmed and cannot keep up
with the volume of claims. The company's home office temporarily assigns claim representatives
from across the country to the southeast region to assist. Which one of the following is correct
concerning potential ethical or professional dilemmas associated with this situation? correct
answers States often grant temporary licenses to out-of-state claim representatives for
catastrophe claim handling.
Ethical and professional conduct can benefit consumers by correct answers Encouraging fair
treatment and prompt payment.
One benefit of ethical and professional conduct of claim representatives for insurers is that such
conduct will typically correct answers Attract investors
Which one of the following involves applying a set of principles and values in making a choice
between an acceptable course of action and a better one? correct answers Ethics
Which one of the following creates legal duties for insurers? correct answers Consumer
regulations
Fred had wind damage to his barn and also to an already damaged pickup truck. Fred knows he
can, but should not, report the preexisting damage as a new damage for claim payment by his
insurer. Fred is facing correct answers A moral dilemma.
correctly describe reasons for the use of independent adjusters correct answers Insurers may use
independent adjusters when special skills and expertise are needed, for example to investigate
aircraft accidents. n the case of a catastrophic loss such as a hurricane, an insurer may not have
sufficient staff to manage the large number of claims, and may use independent adjusters. In
some areas it is not economically feasible to set up claim offices, and insurers may contract with
independent adjusters to handle claims in these remote areas.
a reason when an IA should NOT be used correct answers The insured may retain an
independent adjuster if settlement negotiations with the insurer are not progressing satisfactorily.
Ethics and professionalism are important for insurance professionals because correct answers
Consumer regulations may define the minimum expected ethical and professional standards.
Licensure-related ethical dilemmas can arise when a manager or supervisor asks a claim
representative to assume claim handling responsibilities correct answers In a territory in which
the claim representative is not licensed.
, Bart, a claim representative, was disappointed with his recent performance evaluation and salary
rating. Because of what Bart considered an unfair evaluation, he has since expended less effort in
his job and has taken less interest in improvement. The factor that most affected Bart's claim
handling competency in this situation is correct answers Inequitable rewards and promotions.
Joe who owns a used auto parts store is also a claim representative for an insurance company. To
obtain inexpensive parts, Joe often indicates a total loss on a claim so that he has access to more
auto parts at private auctions. Joe is involved in correct answers A conflict of interest.
Ultimately, the insurance product is correct answers A promise made by the insurer to the
insured.
A choice between keeping the money in a found wallet versus returning it to the owner is an
example of which one of the following types of dilemmas? correct answers Moral dilemma
Lou is a claim manager at a small property-casualty insurance company. Lou takes pride in the
fact that because of his leadership, his company has gained a public reputation for resisting
legitimate claims. Ultimately, this reputation correct answers Undermines the effectiveness of his
company's advertising.
Explain when the use of independent adjusters might be advantageous correct answers Insurers
may use independent adjusters for specific types of losses, for example, aircraft accidents, in
which specialized expertise is required to settle the claim. In the case of a catastrophic loss such
as a hurricane, an insurer may not have sufficient staff to manage the claim volume and may
temporarily depend upon independent adjusters to handle the excess. In some areas it is not
economically feasible to set up remote claim offices and in these areas insurers may depend on
independent adjusters to handle their insureds' losses.
EXCEPT correct answers The insured may retain an independent adjuster after becoming
dissatisfied with the pace of negotiations with the insurer.
Juanita is the senior claim officer for Worthy Insurance Company, which uses the claim audit as
a performance measure for its claim operations. Claim audits usually evaluate both quantitative
and qualitative factors. What is a qualitative factor for Juanita and her staff? correct answers
Accurate evaluation of insured's liability
While investigating a fire loss, claim representative Randy noticed on the itemized inventory that
the insured had lost one earring of a diamond set. While on site, Randy found the lost earring and
put it in his pocket. Later, he sold the earring for $600, knowing that the insured would be
compensated for the lost earring. Randy's action was correct answers Fraudulent.
As an independent claim adjuster, Peter may bill in tenth-of-an-hour increments. Peter received a
three minute phone call from the insured, Ed. Peter billed his insurer for the normal six minute
minimum billing. Peter returned the phone call to Ed and spoke only two minutes. Peter could
bill this call as a separate increment even though the total five minutes of phone time was less
than one-tenth-of-an-hour. Peter is faced with correct answers An ethical dilemma.
Some jurisdictions have found certain practices in claim handling to be the unauthorized practice
of law. An typical example is correct answers Providing direction on legal strategies.
When a severe hurricane comes ashore in the southeast, the wind and water damage are
extensive. Best Insurance Company's regional claim office is overwhelmed and cannot keep up
with the volume of claims. The company's home office temporarily assigns claim representatives
from across the country to the southeast region to assist. Which one of the following is correct
concerning potential ethical or professional dilemmas associated with this situation? correct
answers States often grant temporary licenses to out-of-state claim representatives for
catastrophe claim handling.
Ethical and professional conduct can benefit consumers by correct answers Encouraging fair
treatment and prompt payment.
One benefit of ethical and professional conduct of claim representatives for insurers is that such
conduct will typically correct answers Attract investors
Which one of the following involves applying a set of principles and values in making a choice
between an acceptable course of action and a better one? correct answers Ethics
Which one of the following creates legal duties for insurers? correct answers Consumer
regulations
Fred had wind damage to his barn and also to an already damaged pickup truck. Fred knows he
can, but should not, report the preexisting damage as a new damage for claim payment by his
insurer. Fred is facing correct answers A moral dilemma.
correctly describe reasons for the use of independent adjusters correct answers Insurers may use
independent adjusters when special skills and expertise are needed, for example to investigate
aircraft accidents. n the case of a catastrophic loss such as a hurricane, an insurer may not have
sufficient staff to manage the large number of claims, and may use independent adjusters. In
some areas it is not economically feasible to set up claim offices, and insurers may contract with
independent adjusters to handle claims in these remote areas.
a reason when an IA should NOT be used correct answers The insured may retain an
independent adjuster if settlement negotiations with the insurer are not progressing satisfactorily.
Ethics and professionalism are important for insurance professionals because correct answers
Consumer regulations may define the minimum expected ethical and professional standards.
Licensure-related ethical dilemmas can arise when a manager or supervisor asks a claim
representative to assume claim handling responsibilities correct answers In a territory in which
the claim representative is not licensed.
, Bart, a claim representative, was disappointed with his recent performance evaluation and salary
rating. Because of what Bart considered an unfair evaluation, he has since expended less effort in
his job and has taken less interest in improvement. The factor that most affected Bart's claim
handling competency in this situation is correct answers Inequitable rewards and promotions.
Joe who owns a used auto parts store is also a claim representative for an insurance company. To
obtain inexpensive parts, Joe often indicates a total loss on a claim so that he has access to more
auto parts at private auctions. Joe is involved in correct answers A conflict of interest.
Ultimately, the insurance product is correct answers A promise made by the insurer to the
insured.
A choice between keeping the money in a found wallet versus returning it to the owner is an
example of which one of the following types of dilemmas? correct answers Moral dilemma
Lou is a claim manager at a small property-casualty insurance company. Lou takes pride in the
fact that because of his leadership, his company has gained a public reputation for resisting
legitimate claims. Ultimately, this reputation correct answers Undermines the effectiveness of his
company's advertising.
Explain when the use of independent adjusters might be advantageous correct answers Insurers
may use independent adjusters for specific types of losses, for example, aircraft accidents, in
which specialized expertise is required to settle the claim. In the case of a catastrophic loss such
as a hurricane, an insurer may not have sufficient staff to manage the claim volume and may
temporarily depend upon independent adjusters to handle the excess. In some areas it is not
economically feasible to set up remote claim offices and in these areas insurers may depend on
independent adjusters to handle their insureds' losses.
EXCEPT correct answers The insured may retain an independent adjuster after becoming
dissatisfied with the pace of negotiations with the insurer.
Juanita is the senior claim officer for Worthy Insurance Company, which uses the claim audit as
a performance measure for its claim operations. Claim audits usually evaluate both quantitative
and qualitative factors. What is a qualitative factor for Juanita and her staff? correct answers
Accurate evaluation of insured's liability
While investigating a fire loss, claim representative Randy noticed on the itemized inventory that
the insured had lost one earring of a diamond set. While on site, Randy found the lost earring and
put it in his pocket. Later, he sold the earring for $600, knowing that the insured would be
compensated for the lost earring. Randy's action was correct answers Fraudulent.
As an independent claim adjuster, Peter may bill in tenth-of-an-hour increments. Peter received a
three minute phone call from the insured, Ed. Peter billed his insurer for the normal six minute
minimum billing. Peter returned the phone call to Ed and spoke only two minutes. Peter could
bill this call as a separate increment even though the total five minutes of phone time was less
than one-tenth-of-an-hour. Peter is faced with correct answers An ethical dilemma.
