AIC 300 – CLAIM IN AN EVOLVING WORLD EXAM
QUESTIONS AND CORRECT ANSWERS WITH
RATIONALES 2024 UPDATE GRADED A+
Larissa is an auto claim adjuster. Traditionally, she has relied on police reports and witness testimony in
her decision making. Recent technological developments give her access to the driver's driving habits,
including acceleration, speed, and braking. This data available to Larissa is known as
Select one:
A. Artificial Intelligence.
B. Telematics.
C. Wearables.
D. Internet of Things.
B. Telematics.
Telematics are used to collect data on personal autos, commercial vehicles, products, shipments,
machinery, smart devices, and workers.
Martin is in SIU and helps his employer, a multi-line insurer, to detect fraudulent claims. He is using a
technology that enables insurers to share fraud-related information. This distributed digital ledger that
facilitates secure transactions without using a third party is known as
Select one:
A. Blockchain.
B. A predictive model.
C. The Internet of Things.
D. Telematics.
Blockchain.
,By having a transparent ledger associated with a car, for example, insurers can detect fraud that
would be difficult to detect otherwise.
Jack leads the claims department for a large insurer and has embraced the recent developments in
claims data collection and analysis. Jack knows that
Select one:
A. People make little difference in analyzing data and explaining it to a customer.
B. Claims determinations and payments will soon be accomplished entirely by AI.
C. He will eventually not need people because insurance is not a customer-driven industry.
D. He still needs people because the data need to be analyzed in context by a human.
D. He still needs people because the data need to be analyzed in context by a human.
As a claims representative, Beatrice is on the front lines for protecting her employer from insurance
fraud. Beatrice should understand that insurance fraud
Select one:
A. Is the costliest white-collar crime in the U.S.
B. Accounts for 25 percent of the P&C industry incurred losses.
C. Costs roughly $40 billion per year, excluding health insurance.
D. Costs each American family between $2,000 and $4,000 per year.
C. Costs roughly $40 billion per year, excluding health insurance.
Ella sued her insurer and alleged bad-faith claim handling after the insurer settled a claim against her
that Ella thought should have been denied. As a result of the settlement, Ella's premium increased. In
,her suit, Ella claimed that the insurer rushed the investigation and did not take all of her facts into
consideration in her defense. While the court found that Ella's argument had merit, it did not award her
the full value because it found that Ella had not provided her information to the insurer in a timely
manner. The insurer used the defense of
Select one:
A. Contributory negligence.
B. Debatable reasonable basis.
C. Comparative negligence.
D. Comparative bad faith.
C. Comparative negligence.
In states that permit negligence as a basis for a bad-faith claim, most use a comparative negligence
approach, reducing the amount of damages that may be awarded.
Not long after Valteri issued a denial and closed the claim, the insured sued for coverage and alleged
bad-faith claim handling against the insurer. Valteri was able to demonstrate for his superiors that he
had made a good-faith investigation and determined that the claim was not covered by the policy. The
insurer maintains that Valteri had reasonable justification in fact for denying the claim. The insurer is
employing the
Select one:
A. Lack of standing defense.
B. Advice of counsel defense.
C. Debatable reasonable basis defense.
D. Statute of limitations defense.
C. Debatable reasonable basis defense.
The insurer may establish that defense that it had a reasonable basis for questioning whether a claim
was covered.
, One of Julio's expectations as a claims representative is good-faith claims handling. He keeps insureds
informed about the claim because they have that expectation and because they are most likely to make
a complaint about bad-faith claim handling. He also wishes to participate in the defense and in
discussions about the possibility of settlement. For these reasons, Julio
Select one:
A. Conducts fair evaluations.
B. Maintains complete and accurate documentation.
C. Maintains regular and prompt communication.
D. Conducts good-faith negotiation.
C. Maintains regular and prompt communication.
Communicating with all parties to a claim is a crucial aspect of good-faith claims handling and
resolution.
Which one of the following statements regarding state versions of the NAIC model act is correct?
Select one:
A. Only insureds may bring lawsuits against insurers.
B. Only claimants may bring lawsuits against insurers.
C. Both insureds and claimants may bring lawsuits against insurers.
D. Some states allow insureds and claimants to bring lawsuits against insurers, while others allow only
insureds.
D. Some states allow insureds and claimants to bring lawsuits against insurers, while others
allow only insureds.
Tobias is a claims representative who understands the importance of good-faith claims handling,
including fair evaluation, good-faith negotiation, complete and accurate documentation, and timely
QUESTIONS AND CORRECT ANSWERS WITH
RATIONALES 2024 UPDATE GRADED A+
Larissa is an auto claim adjuster. Traditionally, she has relied on police reports and witness testimony in
her decision making. Recent technological developments give her access to the driver's driving habits,
including acceleration, speed, and braking. This data available to Larissa is known as
Select one:
A. Artificial Intelligence.
B. Telematics.
C. Wearables.
D. Internet of Things.
B. Telematics.
Telematics are used to collect data on personal autos, commercial vehicles, products, shipments,
machinery, smart devices, and workers.
Martin is in SIU and helps his employer, a multi-line insurer, to detect fraudulent claims. He is using a
technology that enables insurers to share fraud-related information. This distributed digital ledger that
facilitates secure transactions without using a third party is known as
Select one:
A. Blockchain.
B. A predictive model.
C. The Internet of Things.
D. Telematics.
Blockchain.
,By having a transparent ledger associated with a car, for example, insurers can detect fraud that
would be difficult to detect otherwise.
Jack leads the claims department for a large insurer and has embraced the recent developments in
claims data collection and analysis. Jack knows that
Select one:
A. People make little difference in analyzing data and explaining it to a customer.
B. Claims determinations and payments will soon be accomplished entirely by AI.
C. He will eventually not need people because insurance is not a customer-driven industry.
D. He still needs people because the data need to be analyzed in context by a human.
D. He still needs people because the data need to be analyzed in context by a human.
As a claims representative, Beatrice is on the front lines for protecting her employer from insurance
fraud. Beatrice should understand that insurance fraud
Select one:
A. Is the costliest white-collar crime in the U.S.
B. Accounts for 25 percent of the P&C industry incurred losses.
C. Costs roughly $40 billion per year, excluding health insurance.
D. Costs each American family between $2,000 and $4,000 per year.
C. Costs roughly $40 billion per year, excluding health insurance.
Ella sued her insurer and alleged bad-faith claim handling after the insurer settled a claim against her
that Ella thought should have been denied. As a result of the settlement, Ella's premium increased. In
,her suit, Ella claimed that the insurer rushed the investigation and did not take all of her facts into
consideration in her defense. While the court found that Ella's argument had merit, it did not award her
the full value because it found that Ella had not provided her information to the insurer in a timely
manner. The insurer used the defense of
Select one:
A. Contributory negligence.
B. Debatable reasonable basis.
C. Comparative negligence.
D. Comparative bad faith.
C. Comparative negligence.
In states that permit negligence as a basis for a bad-faith claim, most use a comparative negligence
approach, reducing the amount of damages that may be awarded.
Not long after Valteri issued a denial and closed the claim, the insured sued for coverage and alleged
bad-faith claim handling against the insurer. Valteri was able to demonstrate for his superiors that he
had made a good-faith investigation and determined that the claim was not covered by the policy. The
insurer maintains that Valteri had reasonable justification in fact for denying the claim. The insurer is
employing the
Select one:
A. Lack of standing defense.
B. Advice of counsel defense.
C. Debatable reasonable basis defense.
D. Statute of limitations defense.
C. Debatable reasonable basis defense.
The insurer may establish that defense that it had a reasonable basis for questioning whether a claim
was covered.
, One of Julio's expectations as a claims representative is good-faith claims handling. He keeps insureds
informed about the claim because they have that expectation and because they are most likely to make
a complaint about bad-faith claim handling. He also wishes to participate in the defense and in
discussions about the possibility of settlement. For these reasons, Julio
Select one:
A. Conducts fair evaluations.
B. Maintains complete and accurate documentation.
C. Maintains regular and prompt communication.
D. Conducts good-faith negotiation.
C. Maintains regular and prompt communication.
Communicating with all parties to a claim is a crucial aspect of good-faith claims handling and
resolution.
Which one of the following statements regarding state versions of the NAIC model act is correct?
Select one:
A. Only insureds may bring lawsuits against insurers.
B. Only claimants may bring lawsuits against insurers.
C. Both insureds and claimants may bring lawsuits against insurers.
D. Some states allow insureds and claimants to bring lawsuits against insurers, while others allow only
insureds.
D. Some states allow insureds and claimants to bring lawsuits against insurers, while others
allow only insureds.
Tobias is a claims representative who understands the importance of good-faith claims handling,
including fair evaluation, good-faith negotiation, complete and accurate documentation, and timely
