CIC - Insurance Company Operations Latest
Update 2024-2025 Actual Exam from Credible
Source with 250 Questions and 100% Verified
Detailed Correct Answers Guaranteed A+
Approved by Professor
"A" rates - CORRECT ANSWER: are used when no manual rate is available
-based on the facts of that particular risk
-maintain the records of the "a" rates
-Comply with regulatory requirements
4 options of Determination of coverage - CORRECT ANSWER: 1. Covered w/ legal
liability
2. Covered w/ no legal liability
3. Not covered w/ legal liability
4. Not covered w/ no legal liability
5 steps in an agency appointment with marketing rep - CORRECT ANSWER: 1.
Complete paperwork with agency principal
2. Teaches agency staff about insurance company's product
3. Supports agency staff with learning the technology platform
4. Facilitates teaching agency staff how to quote the company's products
5. Provides assistance in policy issuance and if needed, delivery of policy to insureds
5 steps of the claim process - CORRECT ANSWER: 1. Report
2. Investigate
3. Verify
4. Evaluate
,5. Resolve
5 ways claims handling process utilizes technology - CORRECT ANSWER: 1. track
adjuster locations to allow an adjuster close by to respond
2. Using digital photos to complete damage assessments in auto claims
3.Digitizing documents and delivering them electronically
4. Training adjusters to operate drones for quicker loss assessment and increased
safety ex. use drone to see roof damage
5. Applying analytics for fraud detection and potential recoveries
A mutual or privately held company would report on a - CORRECT ANSWER: STAT
basis and may also report on a more conventional GAAP basis at its own option
Mutual companies are not subject to SEC regulation
A publicly held insurance company would have one set of accounting reports done on a
- CORRECT ANSWER: STAT basis and one on a GAAP basis
publicly held companies are subject to SEC regulation
Absolute Liability - CORRECT ANSWER: without regard to fault
Additional Factors for Catastrophe prone areas - CORRECT ANSWER: 1. Real - time
aggregation of values
2. Measure of capacity
3. Impact on reinsurance pricing and coverage
Advantages vs Disadvantages of Class Rates - CORRECT ANSWER: Advantage:
Updated Annually at most, are always available when needed, lend themselves to
automation
,Disadvantage:
Depends on getting the right classification, higher chance of error or manipulation by
underwriter, does not reflect risk specific characteristic
Advantages vs Disadvantages of Specific Rates - CORRECT ANSWER: Advantage:
Unique to a particular building or operation and grant credits or applies debits
depending of good or bad characteristics found
Disadvantage:
Needs regular updating to reflect changed occupancies, operations or conditions.
Updates required formal requests for inspections and are not always available for
immediate use
Agency Expectations of an Insurance Company - CORRECT ANSWER: 1. Stability
2. Excellent product value
3. Knowledgeable staff
4. Prompt claims handling and payment of claims
5.Efficient Automation
Agent and Broker Services - CORRECT ANSWER: 1. Marketing Assistance
2.Agency Access for Account Management
3. Education and Training
4.Financial Support
5. Assistance with regulatory/licensing
Aggregate excess of loss - CORRECT ANSWER: reinsurer pays when the ceding
company's aggregate net losses exceed a predetermined amount or proportion of
premium income
, ex. reinsurance covers 90% of losses in excess of a 70% loss ratio
Allocated Loss Adjustment Expense (ALAE) - CORRECT ANSWER: An expense
directly assigned to or that arises from a particular claim
ex. a lawyers cost that is specifically related to the claim
An insurance company needs a catastrophe plan and its dependent on what factors -
CORRECT ANSWER: 1 size of insurance company
2. geographic location of insurance company
3. Claim department staffing model
4. type of business written
5. severity and types of claims expected
Arbitration - CORRECT ANSWER: An outside service provider assembles a panel of
claims experts to make a claims decision. May or may not be binding.
Auditors Primary responsibilites - CORRECT ANSWER: 1. Follows industry and the
insurance company's rules and procedures in conducting the audit
2. Reviews policyholders operations to accurately classify the business exposure
3. Performs audit annually
Automated systems support the underwriting process by - CORRECT ANSWER: 1.
doesn't fully replace the human element
2. Electronic quoting system with uw capabilities
3. Agency or customer driven online quoting system
4. Includes built-in uw rules so that undesirable business cannot be written
Update 2024-2025 Actual Exam from Credible
Source with 250 Questions and 100% Verified
Detailed Correct Answers Guaranteed A+
Approved by Professor
"A" rates - CORRECT ANSWER: are used when no manual rate is available
-based on the facts of that particular risk
-maintain the records of the "a" rates
-Comply with regulatory requirements
4 options of Determination of coverage - CORRECT ANSWER: 1. Covered w/ legal
liability
2. Covered w/ no legal liability
3. Not covered w/ legal liability
4. Not covered w/ no legal liability
5 steps in an agency appointment with marketing rep - CORRECT ANSWER: 1.
Complete paperwork with agency principal
2. Teaches agency staff about insurance company's product
3. Supports agency staff with learning the technology platform
4. Facilitates teaching agency staff how to quote the company's products
5. Provides assistance in policy issuance and if needed, delivery of policy to insureds
5 steps of the claim process - CORRECT ANSWER: 1. Report
2. Investigate
3. Verify
4. Evaluate
,5. Resolve
5 ways claims handling process utilizes technology - CORRECT ANSWER: 1. track
adjuster locations to allow an adjuster close by to respond
2. Using digital photos to complete damage assessments in auto claims
3.Digitizing documents and delivering them electronically
4. Training adjusters to operate drones for quicker loss assessment and increased
safety ex. use drone to see roof damage
5. Applying analytics for fraud detection and potential recoveries
A mutual or privately held company would report on a - CORRECT ANSWER: STAT
basis and may also report on a more conventional GAAP basis at its own option
Mutual companies are not subject to SEC regulation
A publicly held insurance company would have one set of accounting reports done on a
- CORRECT ANSWER: STAT basis and one on a GAAP basis
publicly held companies are subject to SEC regulation
Absolute Liability - CORRECT ANSWER: without regard to fault
Additional Factors for Catastrophe prone areas - CORRECT ANSWER: 1. Real - time
aggregation of values
2. Measure of capacity
3. Impact on reinsurance pricing and coverage
Advantages vs Disadvantages of Class Rates - CORRECT ANSWER: Advantage:
Updated Annually at most, are always available when needed, lend themselves to
automation
,Disadvantage:
Depends on getting the right classification, higher chance of error or manipulation by
underwriter, does not reflect risk specific characteristic
Advantages vs Disadvantages of Specific Rates - CORRECT ANSWER: Advantage:
Unique to a particular building or operation and grant credits or applies debits
depending of good or bad characteristics found
Disadvantage:
Needs regular updating to reflect changed occupancies, operations or conditions.
Updates required formal requests for inspections and are not always available for
immediate use
Agency Expectations of an Insurance Company - CORRECT ANSWER: 1. Stability
2. Excellent product value
3. Knowledgeable staff
4. Prompt claims handling and payment of claims
5.Efficient Automation
Agent and Broker Services - CORRECT ANSWER: 1. Marketing Assistance
2.Agency Access for Account Management
3. Education and Training
4.Financial Support
5. Assistance with regulatory/licensing
Aggregate excess of loss - CORRECT ANSWER: reinsurer pays when the ceding
company's aggregate net losses exceed a predetermined amount or proportion of
premium income
, ex. reinsurance covers 90% of losses in excess of a 70% loss ratio
Allocated Loss Adjustment Expense (ALAE) - CORRECT ANSWER: An expense
directly assigned to or that arises from a particular claim
ex. a lawyers cost that is specifically related to the claim
An insurance company needs a catastrophe plan and its dependent on what factors -
CORRECT ANSWER: 1 size of insurance company
2. geographic location of insurance company
3. Claim department staffing model
4. type of business written
5. severity and types of claims expected
Arbitration - CORRECT ANSWER: An outside service provider assembles a panel of
claims experts to make a claims decision. May or may not be binding.
Auditors Primary responsibilites - CORRECT ANSWER: 1. Follows industry and the
insurance company's rules and procedures in conducting the audit
2. Reviews policyholders operations to accurately classify the business exposure
3. Performs audit annually
Automated systems support the underwriting process by - CORRECT ANSWER: 1.
doesn't fully replace the human element
2. Electronic quoting system with uw capabilities
3. Agency or customer driven online quoting system
4. Includes built-in uw rules so that undesirable business cannot be written
