AIC EXAM PACKAGE 2026 CORE
KNOWLEDGE AND INDUSTRY STANDARDS
REVIEW QUESTIONS ANSWERS VERIFIED
GUIDE
◉ What is the insurers promise?
Answer: to uphold the contract made on the policy (First or Third),
and to protect the insured from lawsuits in claims that are found
wrong
◉ What is the insurers promise in a property insurance policy?
Answer: Pay for damages made by the claimant/policyholder to any
property if fits the policy.
◉ What is the insurers promise in liability insurance policy?
Answer: pay for damages done to OTHERS (bodily injuries, property
damage or other)
◉ When is the insurer responsible to pay first party claims?
Answer: direct report from insured to insurer.
◉ When is the insurer responsible to pay third party claims?
,Answer: made against the policyholder by someone to whom the
policyholder may be liable
◉ By ensuring fair claim settlement, claims representatives prevent
any unnecessary increase in the cost of insurance and subsequent
reduction in the insurer's
Answer: underwriting profit
◉ An insurance contract is designed to be all of the following in the
event of a claim, EXCEPT
Answer: A means to provide a profit to the insured
◉ Third Party Administrator (TPA)
Answer: An organization that provides administrative services
associated with risk financing and insurance.
◉ Independent Adjuster
Answer: An independent claim representative who handles claims
for insurers for a fee.
◉ Producer
Answer: term "producer" includes agents, brokers, sales
representatives, and intermediaries who place insurance with
insurers
,◉ Public Adjuster
Answer: An outside organization or person hired by an insured to
represent the insured in a claim in exchange for a fee.
◉ Loss adjustment expense (LAE)
Answer: The expense that an insurer incurs to investigate, defend,
and settle claims according to the terms specified in the insurance
policy.
◉ Which one of the following involves making a choice between
what is lawful and what is unlawful?
Answer: legality
◉ For insurers, ethical and professional conduct can help
Answer: retain customers and attract investors
◉ Ethics and professionalism are important for insurance
professionals because
Answer: Consumer regulations may define the minimum expected
ethical and professional standards.
◉ Three ways good faith is established:
, Answer: By satisfying contractual duties and other promises
By maintaining insurers' credibility
By complying with legal duty
◉ If the business of insurance is conducted ethically and
professionally, society can reap the benefits of insurance, which
include
Answer: support for credit
◉ Most states require the licensing of
Answer: public adjusters
◉ Some jurisdictions have found certain practices in claim handling
to be the unauthorized practice of law. An typical example is
Answer: Providing direction on legal strategies
◉ Ethical and professional conduct of claim representatives can
benefit consumers by
Answer: Encouraging fair treatment and prompt payment.
◉ If the business of insurance is conducted ethically and
professionally, society can reap the benefits of insurance, which
include
KNOWLEDGE AND INDUSTRY STANDARDS
REVIEW QUESTIONS ANSWERS VERIFIED
GUIDE
◉ What is the insurers promise?
Answer: to uphold the contract made on the policy (First or Third),
and to protect the insured from lawsuits in claims that are found
wrong
◉ What is the insurers promise in a property insurance policy?
Answer: Pay for damages made by the claimant/policyholder to any
property if fits the policy.
◉ What is the insurers promise in liability insurance policy?
Answer: pay for damages done to OTHERS (bodily injuries, property
damage or other)
◉ When is the insurer responsible to pay first party claims?
Answer: direct report from insured to insurer.
◉ When is the insurer responsible to pay third party claims?
,Answer: made against the policyholder by someone to whom the
policyholder may be liable
◉ By ensuring fair claim settlement, claims representatives prevent
any unnecessary increase in the cost of insurance and subsequent
reduction in the insurer's
Answer: underwriting profit
◉ An insurance contract is designed to be all of the following in the
event of a claim, EXCEPT
Answer: A means to provide a profit to the insured
◉ Third Party Administrator (TPA)
Answer: An organization that provides administrative services
associated with risk financing and insurance.
◉ Independent Adjuster
Answer: An independent claim representative who handles claims
for insurers for a fee.
◉ Producer
Answer: term "producer" includes agents, brokers, sales
representatives, and intermediaries who place insurance with
insurers
,◉ Public Adjuster
Answer: An outside organization or person hired by an insured to
represent the insured in a claim in exchange for a fee.
◉ Loss adjustment expense (LAE)
Answer: The expense that an insurer incurs to investigate, defend,
and settle claims according to the terms specified in the insurance
policy.
◉ Which one of the following involves making a choice between
what is lawful and what is unlawful?
Answer: legality
◉ For insurers, ethical and professional conduct can help
Answer: retain customers and attract investors
◉ Ethics and professionalism are important for insurance
professionals because
Answer: Consumer regulations may define the minimum expected
ethical and professional standards.
◉ Three ways good faith is established:
, Answer: By satisfying contractual duties and other promises
By maintaining insurers' credibility
By complying with legal duty
◉ If the business of insurance is conducted ethically and
professionally, society can reap the benefits of insurance, which
include
Answer: support for credit
◉ Most states require the licensing of
Answer: public adjusters
◉ Some jurisdictions have found certain practices in claim handling
to be the unauthorized practice of law. An typical example is
Answer: Providing direction on legal strategies
◉ Ethical and professional conduct of claim representatives can
benefit consumers by
Answer: Encouraging fair treatment and prompt payment.
◉ If the business of insurance is conducted ethically and
professionally, society can reap the benefits of insurance, which
include
