AIC 30 Exam Practice Questions With Complete Solutions | Latest Update 2026 | Guaranteed Pass

AIC 30 Exam Practice Questions With Complete Solutions | Latest Update 2026 | Guaranteed Pass 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 selfinsured 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 recoveryQualitative 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 Unfair Claims Settlement Practice Act - answer-to prevent insurance companies from taking unfair advantage of the insured/claimantsReservations 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 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 another. Slander, libel, invasion of privacy, false arrest, assault, battery, etc.. Direct Loss - answer-a reduction in the value of property that results directly and immediately in the loss of value from damage to the property or injury to the person Indirect Loss - answer-a loss that arises as a result of damage to property or injury to a person, other than the direct loss. Example: Loss of Salary for an injury, loss of use of the house causing you to rent another place to stay Pro Rata Contribution - answer-an approach to other insurance by which the insurers contribute to the loss in the proportion to which they contribute to the total amount of coverage purchased. (their limits of liability) Insurable Interest - answer-an ownership in the property that is not unduly remote, and if lost would cause the person financial harm if an insured event occurred.Compensatory Damages - answer-designed to make the person whole again. Awarded to reimburse for actual harm Special Damages - answer-a part of compensatory damages, that awards a sum of money to reimburse for "quantifiable" bills. General Damages - answer-a monetary award to compensate a victim for "qualitative" injuries such as pain and suffering, scar tissue, loss of consortium. Punitive (Exemplary) Damages - answer-designed to punish and prevent further deceitful, reckless, or malicious actions. As they are designed to punish, they need to bear any relationship to the party's actual damages. Coinsurance Clause - answer-requires the insured to carry insurance equal to at least a specified percentage of the insured property value. ADR - Alternative Dispute Resolution - answer-Procedures to help settle disputes without litigation. Ex: Arbitration, formal appraisal, mini-trial, summary jury trials, and mediation. (or negotiation, but no dispute) Mediation - answer-facilitated negotiation - nonbinding. An alternative to going into litigation, used when negotiation breaks down. Arbitration - answer-An ADR, when disputing parties agree to select a neutral or proceed to an organization that provides an arbitrator to act as a judge. this outside party issues a ruling, and is binding and final.Appraisal Clause - answer-ADR option that prescribes their expert, our expert and the experts select a neutral they feel is an expert in the field. The matter is discussed, and when any 2 of the 3 agree, the matter is selected and is binding and final. Mini-Trial - answer-ADR - the case undergoes an abbreviated version of a trial before a panel or an advisor who poses questions, and offers opinions on the outcome of a trial based on the evidence presented. Both sides may participate, but they do not have to. The goal is to show the strengths and weaknesses before trial, and in so doing aid in a negotiated agreement Summary Jury Trial (Mock Jury Trial) - answer-ADR in which disputing parties participate in an abbreviated trial, presenting evidence of a few witness to a panel of Mock Jurors who decide the case. (non binding) Again, show weaknesses and facilities negotiation. Reserve - answer-the amount the insurer estimates and sets aside to pay on a claim that has not been settled Individual Case Method - answer-the adjuster sets the reserve based on the facts of the case, and the adjusters experience with similar claims Roundtable Method - answer-a method of setting a reserve by having two or more individuals review the file, discuss and develop a consensus for the reserve Average Value Method - answer-a predetermined reserve is established for each claim as it is reported. Some will be over that amount, some will be under. It is an average expected payment amountFormula Method - answer-a reserve is set by using a mathematical formula. Applies a relationship for amount of medical treatment received, wage loss, etc. Using the total of those, developing an amount of compensation.