CIP C112 Practical Issues In Claims Management Exam
Actual Exam Newest Complete 150 Questions And Correct
Detailed Answers| Already Graded A+
(6 steps for) claims handlig - ans -1.coverage analysis
2. loss reserving
3. reporting to others
4. investigation
5. evaluation
6. negotiation and settlement.
(how do) P&C Ins. Co's. define themselves ? - ans -by how they fulfil their promise
of follow through on indemnity payments to Insureds.
claims are adjudicated - ans -according to the policy wording in effect at the time
the claim occurred.
step 4 of claims handling (Auto investigation) (7) - ans -having the insd provide
loan/lease info 2. certs for vehicle, 3. location of all keys, 4. names and contact
info of all people having access to the vehicle, 5. description of vehicle, 7. receipts
for upgrades.
Quantitative measurement is - ans -Stated numerically.
Advantages of using PPN (6) - ans -economics of scale 2. Ensuring product and
service quality 3. Special priority treatment 4. Cost controlling mechanism for
adjuster 5. Discount price without sacrificing quality 6. Fixed labour or unit cost
Preferred Contractors (should have the following qualities) - ans -reputation for
being honest 2. properly licensed. 3. competitive pricing. 4. no surcharges 5.
commitment to handling claims promptly and fairly. 6. written guarantees 7.
priority for insureds. 8. modern well maintained equipment. 9. compliant with
fire, environmental and health regulations. 10. experienced staff.
common 1st step in setting a dept. budget is - ans -look as same dept's. budget
from previous year
,Baseline budgeting - ans -uses previous years budget to determine new budget
Zero based budgeting - ans -examines root need of the organisation justifying
each expenditure
performance based budgeting - ans -deeper review of each category to ensure it
contributes to the company's overall mission and goals.
SIU - ans -special investigation unit
SIU is staffed by people with exceptional investigation skills. (The ability to
maintain excellent working relationships with) - ans -law enforcement officials, 2.
fire officials and other organizations who investigate Insurance Fraud. Often
provide training on Fraud awareness.
allocated expense - ans -paid by adjusters to handle the claims file.
Unallocated expenses - ans -Other expenses not seen on any particular claim.
(cost of doing business)
unallocated expenses (examples) - ans -staff salaries. 2. equipment for staff 3.
furniture, 4. supplies, 5. education.
allocated expenseses (examples) - ans -Engineers, 2. IA's , 3. Counsel, 4.
appraisers
6 parts to Monitoring the claims function - ans -1. Control of documentation
2. Standards of Measurement
3. Multi-layered goal setting
4. Complaint analysis as a control mechanism
5. Preferred vendors and Service providers
6. Controlling Fraud.
total loss reserve amount is made up of - ans -case loss reserves and aggregate
reserves
, aggregate reserves are - ans -calculated by actuaries
over reserving - ans -leads to loss of competitive edge if actuaries have used them
to calculate premium.
under reserving - ans -leads to loss of company resources as not enough premium
would be charged to cover the future losses.
(name two ) reserving philosophies - ans -ultimate possible outcome theory 2.
probable settlement value theory
Ultimate possible outcome theory - ans -A) Moderate worst case scenario
B) Assumes negative outcome to judicial arguments
C) Conservative
D) Reserves on the high side
E) Early negotiation rarely successful / most large files go to litigation
Probable settlement value theory - ans -A) More optimistic
B) Negotiation or mediation usually result in a favourable outcome
C) Less litigation / conservative judicial framework
what reserves would you set for a total loss fire on a home - ans -1. Building
2. Contents
3. Additional Living Expense
(others could be Liability, Scheduled items, outbuildings)
Average cost or Volume reserves - ans -are set up when adjusters open a type of
claim actuaries predetermine the reserve amount.
tabular Reserves - ans -actuaries deveop tables for long-tail exposures like Bodily
Injuries and are affected by the Time value Of Money
Time Value Of Money (definition) - ans -concept where money in your possession
today is worth more then the same amount at a future date. (the money would
earn interest overtime if it were invested.)
Actual Exam Newest Complete 150 Questions And Correct
Detailed Answers| Already Graded A+
(6 steps for) claims handlig - ans -1.coverage analysis
2. loss reserving
3. reporting to others
4. investigation
5. evaluation
6. negotiation and settlement.
(how do) P&C Ins. Co's. define themselves ? - ans -by how they fulfil their promise
of follow through on indemnity payments to Insureds.
claims are adjudicated - ans -according to the policy wording in effect at the time
the claim occurred.
step 4 of claims handling (Auto investigation) (7) - ans -having the insd provide
loan/lease info 2. certs for vehicle, 3. location of all keys, 4. names and contact
info of all people having access to the vehicle, 5. description of vehicle, 7. receipts
for upgrades.
Quantitative measurement is - ans -Stated numerically.
Advantages of using PPN (6) - ans -economics of scale 2. Ensuring product and
service quality 3. Special priority treatment 4. Cost controlling mechanism for
adjuster 5. Discount price without sacrificing quality 6. Fixed labour or unit cost
Preferred Contractors (should have the following qualities) - ans -reputation for
being honest 2. properly licensed. 3. competitive pricing. 4. no surcharges 5.
commitment to handling claims promptly and fairly. 6. written guarantees 7.
priority for insureds. 8. modern well maintained equipment. 9. compliant with
fire, environmental and health regulations. 10. experienced staff.
common 1st step in setting a dept. budget is - ans -look as same dept's. budget
from previous year
,Baseline budgeting - ans -uses previous years budget to determine new budget
Zero based budgeting - ans -examines root need of the organisation justifying
each expenditure
performance based budgeting - ans -deeper review of each category to ensure it
contributes to the company's overall mission and goals.
SIU - ans -special investigation unit
SIU is staffed by people with exceptional investigation skills. (The ability to
maintain excellent working relationships with) - ans -law enforcement officials, 2.
fire officials and other organizations who investigate Insurance Fraud. Often
provide training on Fraud awareness.
allocated expense - ans -paid by adjusters to handle the claims file.
Unallocated expenses - ans -Other expenses not seen on any particular claim.
(cost of doing business)
unallocated expenses (examples) - ans -staff salaries. 2. equipment for staff 3.
furniture, 4. supplies, 5. education.
allocated expenseses (examples) - ans -Engineers, 2. IA's , 3. Counsel, 4.
appraisers
6 parts to Monitoring the claims function - ans -1. Control of documentation
2. Standards of Measurement
3. Multi-layered goal setting
4. Complaint analysis as a control mechanism
5. Preferred vendors and Service providers
6. Controlling Fraud.
total loss reserve amount is made up of - ans -case loss reserves and aggregate
reserves
, aggregate reserves are - ans -calculated by actuaries
over reserving - ans -leads to loss of competitive edge if actuaries have used them
to calculate premium.
under reserving - ans -leads to loss of company resources as not enough premium
would be charged to cover the future losses.
(name two ) reserving philosophies - ans -ultimate possible outcome theory 2.
probable settlement value theory
Ultimate possible outcome theory - ans -A) Moderate worst case scenario
B) Assumes negative outcome to judicial arguments
C) Conservative
D) Reserves on the high side
E) Early negotiation rarely successful / most large files go to litigation
Probable settlement value theory - ans -A) More optimistic
B) Negotiation or mediation usually result in a favourable outcome
C) Less litigation / conservative judicial framework
what reserves would you set for a total loss fire on a home - ans -1. Building
2. Contents
3. Additional Living Expense
(others could be Liability, Scheduled items, outbuildings)
Average cost or Volume reserves - ans -are set up when adjusters open a type of
claim actuaries predetermine the reserve amount.
tabular Reserves - ans -actuaries deveop tables for long-tail exposures like Bodily
Injuries and are affected by the Time value Of Money
Time Value Of Money (definition) - ans -concept where money in your possession
today is worth more then the same amount at a future date. (the money would
earn interest overtime if it were invested.)
