2026 CORRECT RESPONSES SET
◉ An insurer has received a claim related to an accident involving a
hoverboard, and an investigation is needed to process the claim.
However, the company doesn't have any claims representatives who
are knowledgeable about handling hoverboard claims. What type of
claims professional should the company hire to help with this
investigation?.
Answer: Independent adjuster
◉ Natalie is a claims representative attempting to settle a complex
claim for an insured. Unfortunately, the insured is dissatisfied with
the way settlement negotiations are progressing. Whom might the
insured hire to make sure that his interests are protected?.
Answer: Public adjuster
◉ Leila was recently hired as a claims representative for an insurer.
How will Leila help underwriters, and how will underwriters rely on
Leila?.
Answer: It helps underwriters by ensuring that claims are paid fairly
and according to their respective policy. The Claims Department
relies on underwriters for thorough, accurate data about the
circumstances under which coverage was written
,◉ As a claims representative, who might Geoffrey collaborate with in
addition to other employees of the insurer?.
Answer: Geoffrey might collaborate with an expert to evaluate the
cause or value of a loss, investigate the possibility of fraud by an
insured or a third-party claimant, or provide legal advice.
◉ What sets the tone for the claims adjustment process?.
Answer: Claims rep's initial contact with the insure
◉ When do claims reps have the greatest opportunity to positively
influence others?.
Answer: During catastrophes, when their help is needed most
◉ What are a loss ratio and a loss adjustment expense (LAE)?.
Answer: A loss ratio is a ratio that measures losses and loss
adjustment expenses against earned premiums and that reflects the
percentage of premiums being consumed by losses. LAE is the
expense that an insurer incurs to investigate, defend, and settle
claims according to the terms specified in the insurance policy.
◉ An insurer's management team is evaluating the organization's
financial wellbeing and wants to determine whether the Claims
Department is functioning properly, whether the Underwriting
Department is selecting appropriate loss exposures, and whether
, the Actuarial Department is pricing the insurance products correctly.
What is the profitability measure that can help management make
these determinations?.
Answer: The loss ratio can help the management team make these
determinations. The loss ratio compares an insurer's losses and LAE
to its collected premiums and reveals the percentage of premiums
being consumed by losses.
◉ What is the first activity in the claims handling process?.
Answer: Acknowledging receipt of the claim
◉ What must a claims representative determine after confirming
that a policy was in force on the date of the loss?.
Answer: Whether the loss occurred within the policy period,
coverage exists under the policy for the type of loss reported, and
the insured followed the policy's terms and conditions.
◉ How do recorded statements and examinations under oath differ?.
Answer: An examination under oath is more formal than a recorded
statement. Recorded statements are often taken by claims
representatives, typically by telephone. Examinations under oath are
usually performed by an attorney for the insurer at the insurer's
office or a court reporter's office.
◉ What qualities do effective statements exhibit?.