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497 Cards in this Set
- Front
- Back
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Which one of the following accurately describes excess insurance?
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Excess insurance provides insureds with additional coverage over and above the limits provided by the underlying policy.
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Which one of the following statements about claim investigations describes an element of good-faith claim handling? |
Claimants are more likely to share information when contacted promptly by the claim representative.
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Which one of the following describes how a plaintiff might recover lawyers' fees in a bad-faith claim? |
Recovery might be allowed by statute or common law
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If a plaintiff wins a bad-faith suit, the court may award compensatory damages, which include |
Emotional distress damages.
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In addition to compensatory damages, courts can award punitive damages when a plaintiff wins a bad-faith suit. Which one of the following statements is true regarding factors affecting a court's decision to assess punitive damages? |
Courts usually require insurer behavior that is worse than ordinary wrongdoing, such as malicious, fraudulent or oppressive behavior.
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A court grants a summary judgment when the court determines that |
No factual issue exists in a case.
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In a bad-faith lawsuit, claimant Jerry alleges improper conduct on the part of claim representative,Twila, who works for a large insurance company. As is generally the case in such bad-faith allegations, which one of the following parties would be the defendant? |
The insurer
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When insurers are required to pay fines for violations of the NAIC Model Act, the fines are paid to the |
State Department of Insurance.
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Claim representatives should understand the subjective interpretation of negligence and gross misconduct. The difference between negligence and gross misconduct is determined by |
The court's or jury's interpretation of the facts.
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The law of bad faith developed because insurers were perceived to have abused their power over insureds. Which one of the following describes a historical factor that led to the development of the law of bad faith? |
If an insurer denied a claim that the insured thought should be covered, the insured sometimes tried to sue the insurer for alleged torts such as fraud, or intentional infliction of emotional distress. However, these cases were difficult to prove.
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An important factor in evaluating an insurer's potential for bad faith for failure to settle is the likelihood or foreseeability of |
An excess verdict.
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Although rare, an insured and claimant may conspire to allow the claimant to recover an excess judgment and agree to split the proceeds. Such collusion is more likely when |
The insured and the claimant are related or are close friends.
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Bad faith claims are not the only risk insurers face from handling claims improperly. They may also face |
Extracontractual claims.
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Claim representatives should be aware of the restrictions imposed by the Fair Credit Reporting Act if they find it necessary to obtain or disclose an insured's financial information during |
A claim investigation.
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In states that regard bad faith as a tort, courts may award which one of the following types of damages as a part of compensatory damages? |
Emotional stress damages
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Which one of the following is correct with respect to fair evaluation of a claim? |
Information about settlements or trial results from similar cases can help claim representatives knowledgably evaluate a claim.
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The losing party on a court of appeals case can appeal the case to the Supreme Court by filing a petition for a writ of centiorari. A writ of certiorari |
Asks the Supreme Court to consider a case.
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Which one of the following accurately describes how a claimant can sue an insurer with which the claimant has no contractual relationship? |
If an insurer's conduct results in a liability judgment above the policy limits, the insured can assign his or her rights against the insurer to the claimant in return for a covenant not to pursue recovery of the excess judgment from the insured.
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Generally a contributory negligence defense is available only in states that permit which one of the following as a basis for bad-faith claims? |
Negligence
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Finetta's insurer has denied claim payment because of a coverage issue, and she has sued her insurer in a bad-faith lawsuit. The insurer is claiming that the damage done resulted from concurrent causation, which is excluded under the policy. A defense that the insurer could use, asserting that the coverage questions were not necessarily in bad faith and that there was a justifiable reason for denying the payment of the claim is |
Debatable reasonable basis.
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Generally, excess liability claims arise from either the insurer's refusal of an opportunity to settle within policy limits, or the insurer's refusal to |
Settle
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Which one of the following correctly describes a federal statute designed to ensure the privacy of confidential information? |
The Fair Credit Reporting Act of 1970 promotes the accuracy and privacy of personal information assembled by credit reporting agencies such as credit checks, consumer investigation reports, and employment background checks.
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Which one of the following statements about good faith negotiations is correct? |
Claim representatives can use arbitration clauses to resolve disputes over the settlement amount.
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Activity logs, correspondence, and documented evidence such as policy reports, medical bills and damage reports can all be included in which one of the following insurer defenses against bad faith? |
Fair dealing and good documentation
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Insurers and their representatives are called upon to handle claims with utmost good faith. However, allegations of bad faith in insurance claims remain one of the most troublesome and controversial issues for insurers and claim representatives. Which one of the following statements related to bad-faith in the insurance arena is true? |
Claim representatives must be familiar with the bad-faith laws in jurisdictions in which they handle claims.
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When a claim representative's conduct results in a liability judgment against the insured that exceeds policy limits, which one of the following parties is required to pay for the amount of judgment that exceeds policy limits? |
The insured
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Which one of the following statements is true regarding the legal environment of bad faith in insurance claim transactions? |
Most bad-faith law is case law.
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Which one of the following describes how the payment of interest may be factored into bad-faith claims? |
Some courts have found that insureds that pay excess judgments have been deprived of the money, while the insurer has had the use of the money to earn interest.
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In order for an excess liability claim to be filed, a final judgment or settlement must have been entered against an insured and the amount of the judgment must be in excess of |
The insured's policy limits.
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The term "equitable subrogation" describes a situation in which |
An excess insurer has the same rights as the insured to bring a suit against the primary insurer.
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Generally, excess liability claims arise from either the insurer's refusal of an opportunity to settle within policy limits, or the insurer's refusal to |
Settle
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Mark reported the theft of his auto to his insurer. Mark failed to keep three appointments with the claim representative investigating the case. The insurer denied the claim after Mark failed to attend the third scheduled meeting. Mark filed a lawsuit, asserting bad faith. Which one of the following defenses should the insurer raise? |
Comparative bad faith
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Which one of the following statements is true regarding the legal environment of bad faith in insurance claim transactions? |
Most bad-faith law is case law.
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Which one of the following correctly describes a federal statute designed to ensure the privacy of confidential information? |
The Fair Credit Reporting Act of 1970 promotes the accuracy and privacy of personal information assembled by credit reporting agencies such as credit checks, consumer investigation reports, and employment background checks.
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Insurers and their representatives are called upon to handle claims with utmost good faith. However, allegations of bad faith in insurance claims remain one of the most troublesome and controversial issues for insurers and claim representatives. Which one of the following statements related to bad-faith in the insurance arena is true? |
Claim representatives must be familiar with the bad-faith laws in jurisdictions in which they handle claims.
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Congress enacted which one of the following laws to protect the confidentiality and security of customers of financial institutions? |
Gramm-Leach-Bliley Act
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Which one of the following statements is true regarding policyholders and claimants involved in bad-faith claims? |
An insured can assign rights against the insurer to a claimant.
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Bad faith claims are not the only risk insurers face from handling claims improperly. They may also face |
Extracontractual claims.
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The time in which to file a lawsuit allowed by statutes of limitation varies depending on whether the lawsuit alleges bad faith as a tort or |
Breach of contract.
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An insured may have defenses against bad-faith claims alleging wrongful denial of coverage. For example, whether the insured is entitled to a summary judgment is a measure of |
Whether the claim involves a debatable question.
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Finetta's insurer has denied claim payment because of a coverage issue, and she has sued her insurer in a bad-faith lawsuit. The insurer is claiming that the damage done resulted from concurrent causation, which is excluded under the policy. A defense that the insurer could use, asserting that the coverage questions were not necessarily in bad faith and that there was a justifiable reason for denying the payment of the claim is |
Debatable reasonable basis.
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If a plaintiff wins a bad-faith suit, the court may award compensatory damages, which include
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Emotional distress damages.
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Insurers found liable for bad faith or that are responsible for extracontractual liability are required to pay damages to the |
Harmed party.
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When a claim representative's conduct results in a liability judgment against the insured that exceeds policy limits, which one of the following parties is required to pay for the amount of judgment that exceeds policy limits? |
The insured
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In a lawsuit where the court found Blithe Insurance in violation of the 1990 NAIC Model Act, the court found that Blithe intended to deceive the insured which resulted in substantial harm to the insured and that the insured suffered substantial harm as a result. The court found that the actions of the claim representative were so reckless and intentional that the final award was in excess of the policy limits. The types of damages awarded by the court because of Blithe's bad faith conduct are |
Punitive damages.
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Claim representatives should be aware of the restrictions imposed by the Fair Credit Reporting Act if they find it necessary to obtain or disclose an insured's financial information during |
A claim investigation.
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Generally a contributory negligence defense is available only in states that permit which one of the following as a basis for bad-faith claims? |
Negligence
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Which one of the following accurately describes excess insurance? |
Excess insurance provides insureds with additional coverage over and above the limits provided by the underlying policy.
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In good-faith claim handling, the insurer should give consideration to the insured's interests that is |
At least equal to that given to the insurer's interests.
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The law of bad faith developed because insurers were perceived to have abused their power over insureds. Which one of the following describes a historical factor that led to the development of the law of bad faith? |
If an insurer denied a claim that the insured thought should be covered, the insured sometimes tried to sue the insurer for alleged torts such as fraud, or intentional infliction of emotional distress. However, these cases were difficult to prove.
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When insurers are required to pay fines for violations of the NAIC Model Act, the fines are paid to the |
State Department of Insurance.
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In addition to compensatory damages, courts can award punitive damages when a plaintiff wins a bad-faith suit. Which one of the following statements is true regarding factors affecting a court's decision to assess punitive damages? |
Courts usually require insurer behavior that is worse than ordinary wrongdoing, such as malicious, fraudulent or oppressive behavior.
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Insurers generally support awarding of punitive damages that are |
Limited to the specific harm suffered by the plaintiff.
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Claim representatives should understand the subjective interpretation of negligence and gross misconduct. The difference between negligence and gross misconduct is determined by |
The court's or jury's interpretation of the facts.
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Annie is a claim representative investigating an auto claim. She e-mailed a coverage question to her supervisor, Cindy, who was on vacation for two weeks. When Cindy returned, she forwarded the question to one of the insurer's attorneys, and neither Annie nor Cindy followed up on the claim until three months later. The unfair claim practice that occurred is |
Substantial delay.
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If the state insurance department finds an insurer guilty of unfair claim settlement practices, based on the NAIC Model Act, it may impose |
Revocation of an insurer's license, usually after other penalties have proved ineffective.
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Excess insurance does not pay a loss until the loss amount exceeds |
The underlying policy limits.
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Which one of the following statements is true regarding elements of good-faith claim handling and laws relating to claim handling? |
Claim representatives should use policy provisions, such as arbitration clauses, when applicable, to resolve disputes over the settlement amount.
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One aspect of good-faith claim handling is the fair evaluation of the claim. A fair approach to evaluating liability claims is for the claim representative to evaluate them |
As if no coverage limit existed.
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Which one of the following statements about state court systems is true?
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Some courts have limited jurisdiction and hear only specific types of cases.
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Which one of the following statements about the appeal of a verdict in a civil trial is true? |
An appeal may be based on the judge's instructions to the jury
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Which one of the following statements describes how defense counsels are selected for insurance company litigation? |
The process varies by insurer
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Generally, any legal bill for litigation that does not comply with the insurer's billing guidelines should be
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Returned to the attorney for an explanation.
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The process of examining potential jurors about their possible interest in the matters presented at trial, their ability to decide the case fairly and without prejudice, and their overall competence to serve as jurors is called |
Voir dire.
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During the jury selection process, a defense attorney used all the allotted peremptory challenges to eliminate potential jurors that seemed hostile to the case. Which one of the following statements explains the extent, if at all, that the attorney can still exclude potential jurors?
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Additional potential jurors can still be excluded, but the attorney must state the reason for doing so.
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Diego, a claim representative, was reviewing an interim billing from the insurer's litigation lawyer. He noticed that the lawyer billed, for reviewing the claim file, 13 hours on Sept. 13th and 12 hours on September 18th. Diego decided to contact the lawyer for an explanation of these hours. Unless there is a compelling reason, most attorneys should not bill for more than |
10 hours per day.
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One of the functions served by a complaint is to give notice of who the parties are and where and why the lawsuit was filed. When a claim representative receives such notice, he or she should first do which one of the following? |
Determine whether coverage exists under the applicable policy
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Once the selection of a defense counsel is made, what should the claim representative give to the defense counsel?
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A transmittal form along with a copy of the claim file as well as the summons and complaint
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Specific written questions or requests submitted by one party in a lawsuit requiring the opposing party to answer in writing is called |
Interrogatories
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Following a verdict in a civil trial, which one of the following parties is usually responsible for making payment of a judgment owed by an insurer? |
The claim representative
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After receiving a summons and complaint in a third -party lawsuit, the claim representative must do which one of the following? |
Determine the applicable statute of limitations and whether it has expired.
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Which one of the following statements about the civil trial process is true?
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Attorneys can make motions to strike evidence from the record after it has been presented.
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Which one of the following statements about interrogatories is true? |
They allow each side to discover the other side's position about the facts of a case
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A court can adjust the damages awarded by a jury. This typically happens under which one of the following circumstances? |
The jury awards an extraordinarily high judgment that is disproportionate to the damages
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Which one of the following statements about the process of referring a lawsuit to defense counsel is true? |
Certain insureds have the right in their contracts with the insurer to participate in selection of the defense counsel.
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Madeline Bronson received a summons and complaint by registered letter. The documents indicate that her next-door neighbor, Tom Trimble, is suing her. Madeline is unsure what to do and thinks about the situation for two weeks before calling her insurance agent, Rick Travis. Rick instructs her to bring the summons and complaint to his office right away. He calls her insurer to report the suit and immediately forwards the documents to the insurer by courier. The claim representative assigned to the case reviews the documents. The complaint states that Madeline hired a student, Mark Mitchell, to take down a large dead tree in her backyard. When Mark cut the tree down, it landed on top of four vintage motorcycles Tom had stored in his backyard. Unfortunately, the motorcycles were not insured. Tom is alleging that Madeline was negligent in hiring an inexperienced student to remove the tree and is seeking $130,000 in monetary compensation for the damaged motorcycles. Although Tom and Madeline live in Oregon, Tom has filed the suit in another state because he believes courts in that state award higher damages than those in Oregon. Which one of the following is correct?
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Tom cannot properly file in a state other than Oregon because a state court typically only has jurisdiction over parties who reside or do business in that state.
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Luke, a claim representative, was investigating a liability law suit filed against the insured Yusuf, by Sophia. Sophia fell on the steps leading into Yusuf's house. She sued for an injury and for a trip, including air fare and hotel, to New York to replace a damaged pair of shoes. Under his homeowners' policy, the injury could be a covered loss, but Sophia's trip to New York is not covered. To protect the insurer during the investigation, Luke sent Yusuf which one of the following documents reserving the insurer's right to withdraw the defense should facts place the allegations outside the policy coverage? |
Reservation of rights
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Rose responded to a lawsuit against her by asserting that the lawsuit was not filed within the appropriate statute of limitations. Rose's response is an example of a(an) |
Affirmative defense.
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Joe is the plaintiff in a litigated claim. Joe is suing his insurer for $55,000. The insurer has not responded by the established deadline; the judge has awarded the full $55,000 to Joe. This action by the court is |
A default judgment.
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From the standpoint of the insurer, if someone files a lawsuit against one of its insureds, this is which one of the following types of lawsuits? |
A third-party-lawsuit
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Most insurers have billing guidelines for attorneys who defend insureds or the insurer, and these guidelines typically |
Require a detailed, itemized record of work performed.
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Ricardo was sued by Sue after his car spun out of control and struck her bicycle. Even though he admits to driving over the speed limit, Ricardo blames part of the accident on oil that had been spilled on the road by a delivery truck. He then files a complaint bringing the driver and owner of the oil truck into the lawsuit. Ricardo's action is an example of a(n) |
Third-party claim.
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An insurer sometimes issues an excess letter to an insured as a result of an allegation in the claim litigation process. Which one of the following is a typical purpose of such a letter? |
To provide the insured with the option of hiring separate defense council to work with the insurer's defense counsel when damages sought are in excess of policy limits
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In preparing the trial strategy, the attorney for the defense may research court decisions in similar cases to find a precedent for the defense position in the current case. The practice of using precedent is based on |
Stare decisis.
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The litigation process begins with which one of the following?
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Receipt of the summons and complaint
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Which one of the following statements about discovery in the claim litigation process is true? |
Any requested documents that a party possesses or can obtain must be produced unless the party believes the document to be privileged.
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Which one of the following defines the time limit for filing a lawsuit? |
The statute of limitations
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A motion is a written proposal for how a dispute should be resolved. Motions are governed by |
The rules of civil procedure.
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Claim representatives should be familiar with three common pretrial motions: motion to dismiss, motion in limine, and motion for summary judgment. Motion in limine is |
A pretrial request that certain evidence be excluded from the trial.
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Ricardo was sued by Sue after his car spun out of control and struck her bicycle. Even though he admits to driving over the speed limit, Ricardo blames part of the accident on oil that had been spilled on the road by a delivery truck. He then files a complaint bringing the driver and owner of the oil truck into the lawsuit. Ricardo's action is an example of a(n) |
Third-party claim.
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Joe is the plaintiff in a litigated claim. Joe is suing his insurer for $55,000. The insurer has not responded by the established deadline; the judge has awarded the full $55,000 to Joe. This action by the court is |
A default judgment.
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In a third-party lawsuit, a claim made in a complaint by the plaintiff, specifying what the plaintiff expects to prove to obtain a judgment against the defendant is called |
Allegations.
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Which one of the following is the purpose of a lawsuit transmittal document?
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To provide information to a defense counsel about a claim
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Which one of the following statements about who decides the questions in a jury trial is true? |
The jury decides all questions of fact, and the judge decides all questions of law.
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Which one of the following statements about interrogatories is true? |
They allow each side to discover the other side's position about the facts of a case.
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Which one of the following statements about the process of referring a lawsuit to defense counsel is true? |
Certain insureds have the right in their contracts with the insurer to participate in selection of the defense counsel.
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Chet was sued by Jack alleging that Chet's negligence caused injury to Jack and his car. However, Chet felt the accident was due to Jack's negligence, and he then brought a legal complaint against Jack. Chet's action is an example of a(n) |
Counterclaim
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Which one of the following statements about the development of a litigation plan after a lawsuit has been filed is true? |
The plan will spell out the role and responsibilities of the claim representative and the defense counsel.
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Claim representatives should be familiar with three common pretrial motions: motion to dismiss, motion in limine, and motion for summary judgment. Motion in limine is |
A pretrial request that certain evidence be excluded from the trial.
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Following a verdict in a civil trial, which one of the following parties is usually responsible for making payment of a judgment owed by an insurer? |
The claim representative
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The process of examining potential jurors about their possible interest in the matters presented at trial, their ability to decide the case fairly and without prejudice, and their overall competence to serve as jurors is called |
Voir dire
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A court can adjust the damages awarded by a jury. This typically happens under which one of the following circumstances? |
The jury awards an extraordinarily high judgment that is disproportionate to the damages.
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What should a claim representative initially do when he or she determines there is no coverage for the facts stated in a plaintiff's allegation? |
Discuss the situation with the coverage counsel to determine if there is a duty to defend.
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From the standpoint of the insurer, if someone files a lawsuit against one of its insureds, this is which one of the following types of lawsuits? |
A third-party-lawsuit
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The allegation made by a plaintiff in a lawsuit is called a(n) |
Complaint
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During the jury selection process, a defense attorney used all the allotted peremptory challenges to eliminate potential jurors that seemed hostile to the case. Which one of the following statements explains the extent, if at all, that the attorney can still exclude potential jurors? |
Additional potential jurors can still be excluded, but the attorney must state the reason for doing so.
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Madeline Bronson received a summons and complaint by registered letter. The documents indicate that her next-door neighbor, Tom Trimble, is suing her. Madeline is unsure what to do and thinks about the situation for two weeks before calling her insurance agent, Rick Travis. Rick instructs her to bring the summons and complaint to his office right away. He calls her insurer to report the suit and immediately forwards the documents to the insurer by courier. The claim representative assigned to the case reviews the documents. The complaint states that Madeline hired a student, Mark Mitchell, to take down a large dead tree in her backyard. When Mark cut the tree down, it landed on top of four vintage motorcycles Tom had stored in his backyard. Unfortunately, the motorcycles were not insured. Tom is alleging that Madeline was negligent in hiring an inexperienced student to remove the tree and is seeking $130,000 in monetary compensation for the damaged motorcycles. Although Tom and Madeline live in Oregon, Tom has filed the suit in another state because he believes courts in that state award higher damages than those in Oregon. Which one of the following is correct? |
Tom cannot properly file in a state other than Oregon because a state court typically only has jurisdiction over parties who reside or do business in that state.
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A claim made in a complaint by a plaintiff specifying what the plaintiff expects to prove to obtain a judgment against the defendant is referred to as a(n) |
Allegation.
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Actual service is one method of serving legal papers. This type of service involves the use of which one of the following? |
Hand delivery
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A litigation budget depends on the type of fee arrangement the defense attorney has with the insurer, which can usually include |
An hourly or flat fee.
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A motion is a written proposal for how a dispute should be resolved. Motions are governed by |
The rules of civil procedure.
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Attorneys often use favorable precedents in other court decisions to support their cases. This practice of using precedents is based on which one of the following principles? |
Stare decisis
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Which one of the following can contribute to an effective defense of the insured at a reasonable cost? |
Adherence to a litigation budget
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Which one of the following is a pretrial discovery tool involving oral examination of a witness to produce a written verbatim statement? |
A deposition
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Which one of the following statements about the appeal of a verdict in a civil trial is true? |
An appeal may be based on the judge's instructions to the jury.
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The claim litigation budget depends on the type of fee arrangement the attorney has with the client/insurer. The most commonly used fee arrangement is the |
Hourly fee.
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It is important for a claim representative to determine whether the service of a lawsuit has been done properly. Which one of the following sets out the rules for service of a federal lawsuit? |
The Federal Rules of Civil Procedure
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The Federal Rules of Civil Procedure set out the rules for service of federal lawsuits. Generally, there are two types of service: actual service and substituted or constructed service. Actual service is |
Hand delivery of the summons and complaint to the defendant.
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The discovery process usually begins with which one of the following? |
Requests for production of documents
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Which one of the following types of claims is a good candidates for Internet negotiations?
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Uncomplicated bodily injury claims
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A party can gain significant power in a claim negotiation by |
Determining any deadlines that may affect the other party
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Jose is in the midst of negotiating a theft claim with Rodrigo. Jose has advised Rodrigo that he is prepared to offer a settlement of $10,000. Rodrigo responds that he believes the settlement should be $15,000. Jose advises that he needs to discuss this amount with his manager. What negotiation technique is Jose using?
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Limited negotiation authority
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When adjusting a claim, a claim representative will use one of four distinct negotiation styles. Which one of the following statements applies to the win-win type of negotiation? |
The claim representative is concerned with outcome and rapport.
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The statute of limitations on a claim is quickly approaching. With this in mind, the claims representative decided to settle the case for a value much higher than it is worth. The claims representative should have |
Worked more quickly to settle the claim sooner.
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Filip, an insurance company automobile claim adjuster, finished reviewing a collision claim for a customer. As he discussed the claim with the customer, Filip is aware that the damage is estimated at $2,500. However, without any concession from the customer, he offered $3,000 to settle the claim promptly. This is a common negotiation pitfall called |
Bidding against oneself.
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In claim negotiations, which one of the following describes a claim representative’s settlement offer that changes simply because time passes? |
Using decreasing or limited offers
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In the claims process, claim representatives use a number of different negotiating styles when settling a claim. A representative who uses a win-lose style of negotiation |
Sees negotiation as a contest between two opposing parties.
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Mia, a claim representative, is attempting to negotiate a settlement with Katie that is satisfying to both parties. To do this, she has been using the win-lose style of negotiation and now feels it is time to change to the win-win style of negotiation. Using the win-win style, she will |
Be assertive and cooperative.
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Claim representatives can adopt one of four distinct negotiation styles during claim negotiations with a claimant. The choice of style used is determined by the negotiator's concern for obtaining |
The best outcome while achieving rapport
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Claim representatives can adopt one of four distinct negotiation styles during claim negotiations with a claimant. The choice of style used is determined by the negotiator's concern for obtaining |
The best outcome while achieving rapport
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The Principle of Yes is based on the premise that |
If an individual answers "yes" to a question, he or she is likely to continue to answer "yes" to subsequent questions.
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Claim representative Barbara finds the claimant in a complex case difficult to resolve. The claimant complains and is adversarial in their discussions. Barbara wants to reach a fast resolution with the least time spent with the claimant. Even though this will likely result in unfair treatment to the insured, Barbara is oblivious of the outcome. Barbara is using which one of the following negotiation styles? |
The lose-lose negotiation style can be used.
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Which phase of the negotiation process begins when a loss occurs? |
The crisis phase begins when a loss occurs.
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Which one of the following negotiation styles seeks both to obtain the best outcome and to achieve rapport with the other party? |
The win-win negotiation style seeks both to obtain the best outcome and to achieve rapport with the other party
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Claim representative Barbara finds the claimant in a complex case difficult to resolve. The claimant complains and is adversarial in their discussions. Barbara wants to reach a fast resolution with the least time spent with the claimant. Even though this will likely result in unfair treatment to the insured, Barbara is oblivious of the outcome. Barbara is using which one of the following negotiation styles? |
The lose-lose negotiation style can be used.
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One of the most significant negotiation variables that can affect claim representatives is
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The setting in which claim negotiations are carried out.
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A claim negotiation technique that generally should not be used by claim representatives is called trading dollars. Which one of the following sentences best describes a negotiating technique known as trading dollars? |
Claim representatives barter on the amount in dispute, not considering the facts of the claim.
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The Principle of "Yes" as a claim negotiation technique is based on the premise that
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Disagreements should be avoided until all points of agreement are established.
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Mary is negotiating settlement of an auto theft claim with an insured. The standard industry reference book used in auto theft losses indicates the value of the insured’s vehicle, given its age and condition at the time of the loss, is between $7,500 and $9,500. Mary offers a settlement amount of $8,500. The insured makes a counter-offer of $12,500. Mary counters with an offer of $10,500. This is an example of |
Trading dollars.
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Boulwarism, as a claim negotiation technique,
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Invites conflict and prevents collaboration.
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Which one of the following techniques can help smooth negotiations with unrepresented claimants? |
Making the first offer to help the claimant understand the value of the claim
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Which one of the following negotiation styles seeks both to obtain the best outcome and to achieve rapport with the other party? |
The win-win negotiation style seeks both to obtain the best outcome and to achieve rapport with the other party.
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A liability claim representative negotiated a settlement with a claimant who fell inside a department store. The claims representative valued the case at $5,000. When she approached the claimant with the offer, the claimant felt the case was worth $10,000. Without any facts of the case changing, the representative then counteroffered $7,500 to the claimant. What negotiation pitfall is this? |
Trading dollars
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Which one of the following channels of communication may be the least significant aspect of communication? |
Words
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John is a claim representative assigned to a third-party claim for injuries suffered as a result of an auto accident. Although damage to the vehicle was minor, the claimant’s doctor recommended surgery and an extensive course of physical therapy. John questioned the need for the recommended treatment and met with the claimant requesting that she visit a doctor of John’s choosing for a second opinion. The claimant became very angry and verbally abusive, shouting obscenities at him. John’s best course of action under the circumstances would be to |
Inform the claimant that if the offensive behavior continues, the negotiation will cease until the party is prepared to negotiate in a civil manner. |
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When adjusting a claim, a claim representative will use one of four distinct negotiation styles. Which one of the following statements applies to the win-win type of negotiation? |
The claim representative is concerned with outcome and rapport.
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Making the first offer in a claim negotiation is best done by the claim representative when |
Negotiating with an unrepresented claimant
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Maja, a claim representative, was having difficulty settling a small theft claim with Julio. In exasperation, and hoping for a final resolution, Maja said, "Julio, I’ve offered you a settlement of $5,000. However, if we settle this claim today, I’m willing to increase that offer to $7,500. Which one of the following negotiation techniques best describes the technique Maja is using? |
Bidding against oneself
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In the claims process, claim representatives use a number of different negotiating styles when settling a claim. A representative who uses a win-lose style of negotiation |
Sees negotiation as a contest between two opposing parties.
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Claimant Andy is upset with his insurer because his claim representative Sally does not return his phone calls or keep him apprised of the status of his claim. Andy has been so frustrated over the past few weeks that he has actually inflated the amount of the loss to compensate for what he considers unfair treatment. This shift in Andy's motivation is directly related to |
The time it takes Sally to contact Andy.
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Which one of the following is correct with respect to the negotiation technique of choicing? |
It is based on the assumption that people feel empowered when given a choice.
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Which one of the following statements is correct with respect to the use of the four negotiation styles? |
To avoid any inequity and potential bad-faith actions, claim representatives should normally avoid lose-lose negotiations
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The Principle of "Yes" as a claim negotiation technique is based on the premise that |
Disagreements should be avoided until all points of agreement are established.
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Claim representative Barbara finds the claimant in a complex case difficult to resolve. The claimant complains and is adversarial in their discussions. Barbara wants to reach a fast resolution with the least time spent with the claimant. Even though this will likely result in unfair treatment to the insured, Barbara is oblivious of the outcome. Barbara is using which one of the following negotiation styles? |
The lose-lose negotiation style can be used.
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Maja, a claim representative, was having difficulty settling a small theft claim with Julio. In exasperation, and hoping for a final resolution, Maja said, "Julio, I’ve offered you a settlement of $5,000. However, if we settle this claim today, I’m willing to increase that offer to $7,500. Which one of the following negotiation techniques best describes the technique Maja is using? |
Bidding against oneself
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Adele Matier is a claim representative with Omicron Insurance. She has been assigned a small house fire claim. The insured is Tom Lawson, a retired insurance broker. Tom reports the claim by coming into Omicron’s regional claims office with copies of bills from a cleanup company, a list of the damaged property with receipts for each item, and a detailed quote from a local building contractor for completing repairs to the home. Tom says, "Here’s everything you need. I’ve done your job for you. There’s no reason why we can’t settle the claim this morning. Just issue a check for the total, which is $27,450." When Adele indicates that she will need to investigate the loss, Tom becomes angry and verbally abusive. He says that there is nothing to investigate, the information is all there, and that Adele doesn't know how to do her job. Adele responds angrily. She says Tom should know that pressing for quick settlement is usually an indication that a claim is fraudulent and that the contractor who provided the estimate is known for inflated pricing on insurance work. She says that if Tom is in such a hurry to settle she will issue a check immediately, but it will only be for $15,000. If he wants any more than that, he'll just have to wait. Tom responds that Adele's attitude is going to "cost Omicron money," that he will refuse to settle for less than $30,000, and that he will sue Omicron if the claim is not settled by the end of the week. Tom storms out of the office. Adele hurries to investigate the loss and has two other contractors quote on the house repairs. On Friday, she telephones Tom and tells him that based on these estimates, she feels a fair settlement value for the claim is $22,500. However, if Tom agrees to sign a release that day, she would be prepared to offer $24,000. What common mistakes did Adele make during this process? |
Good faith claim handling precludes retaliation to personal attacks; Adele should not have responded angrily to Tom. Adele's initial offer of $15,000 is an example of trading dollars; claim negotiations should focus on the facts of the claim and not on offers and demands.
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On a Sunday afternoon, there was a storm in Riko's neighborhood. Lightning struck her garden shed causing significant damage. She filed an insurance claim seeking payment for damages. Two weeks later, the claim representative telephoned Riko to begin the claim negotiating process. During the discussion Riko exhibited adversarial behavior and appeared to be inflating the value of the garden shed. This type of motivation may be directly related to |
The time it took the claim representative to contact Riko.
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A party can gain significant power in a claim negotiation by
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Determining any deadlines that may affect the other party.
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Insured Elena and claim representative Patrice cannot reach an agreement and both have begun to see negotiation as a contest, each seeking to defeat the other. Their greatest concern is obtaining the best outcome for their side and they have little interest in achieving rapport. The negotiation style exemplified by Patrice in handling Elena's claim is which one of the following? |
The win-lose negotiation style is exemplified.
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As a claim representative, Gary is feeling pressure from his insurer to settle more claims quickly. As the end of the month approaches, Gary decides to offer the most he can pay on any pending claims in order to close claims and meet insurer's goals. Gary's actions are an example of |
Conceding as deadlines approach.
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Which one of the following statements is correct with respect to the use of the four negotiation styles? |
To avoid any inequity and potential bad-faith actions, claim representatives should normally avoid lose-lose negotiations.
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Filip, an insurance company automobile claim adjuster, finished reviewing a collision claim for a customer. As he discussed the claim with the customer, Filip is aware that the damage is estimated at $2,500. However, without any concession from the customer, he offered $3,000 to settle the claim promptly. This is a common negotiation pitfall called |
Bidding against oneself.
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As a claim representative, Joshua strives for the optimal claim resolution for his insurer while treating the insured fairly and professionally. In a claim settlement related to an auto accident, Joshua realizes that the insured, Dan, is very concerned about the cost of auto repairs. Which one of the following is a negotiating tool Joshua could use to develop a mutually satisfying claim resolution with Dan? |
Like-kind auto parts can be used as a negotiating tool.
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Which one of the following styles of negotiation is best used when it is highly likely that the party suffering a loss will hire an attorney or other representative to help resolve the issue? |
The lose-win negotiation style is best used when it is highly likely that the party suffering a loss will hire an attorney or other representative to help resolve the issue.
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A liability claim representative negotiated a settlement with a claimant who fell inside a department store. The claims representative valued the case at $5,000. When she approached the claimant with the offer, the claimant felt the case was worth $10,000. Without any facts of the case changing, the representative then counteroffered $7,500 to the claimant. What negotiation pitfall is this? |
Trading dollars
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Mary is negotiating settlement of an auto theft claim with an insured. The standard industry reference book used in auto theft losses indicates the value of the insured’s vehicle, given its age and condition at the time of the loss, is between $7,500 and $9,500. Mary offers a settlement amount of $8,500. The insured makes a counter-offer of $12,500. Mary counters with an offer of $10,500. This is an example of |
Trading dollars.
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One of the most significant negotiation variables that can affect claim representatives is |
The setting in which claim negotiations are carried out.
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Fatima is dealing with a fire claim submitted by Jessica. Claim negotiations are about to begin. Fatima is determined to settle the claim as quickly as possible, no matter what Jessica has to say. What negotiating style is Fatima going to use? |
Lose-lose
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In preparation for an in-person negotiation, claim representative Bill visited the negotiation site ahead of time and arranged the seating according to the number of people who will attend. On the day of the meeting, Bill arrived promptly on time, claim file in hand, and with a list of questions and comments. He sat at the head of table and began the negotiation meeting. Which one of the following is a mistake made by Bill? |
Taking the claim file to the meeting
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A party can gain significant power in a claim negotiation by |
Determining any deadlines that may affect the other party.
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Which one of the following is correct pertaining to a claim representative negotiating with an unrepresented claimant? |
The claim representative should collect and use extraneous information to use in settling the claim.
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Which one of the following statements is correct with respect to techniques claim representatives can use when negotiating with claimants’ representatives? |
For many claims, the best time to settle with a claimant’s attorney is just before the claim becomes a lawsuit.
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Which one of the following negotiation styles seeks both to obtain the best outcome and to achieve rapport with the other party? |
The win-win negotiation style seeks both to obtain the best outcome and to achieve rapport with the other party.
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In claim negotiations, which one of the following describes a claim representative’s settlement offer that changes simply because time passes? |
Using decreasing or limited offers
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Making the first offer in a claim negotiation is best done by the claim representative when |
Negotiating with an unrepresented claimant.
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When adjusting a claim, a claim representative will use one of four distinct negotiation styles. Which one of the following statements applies to the win-win type of negotiation? |
The claim representative is concerned with outcome and rapport.
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Which one of the following statements is correct with respect to Boulwarism? |
Boulwarism may result in a more costly resolution for the insurer.
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During the negotiation process, claimants experience all of the following phases, EXCEPT: |
The adversarial phase
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Which one of the following styles of negotiation is best used when it is highly likely that the party suffering a loss will hire an attorney or other representative to help resolve the issue? |
The lose-win negotiation style is best used when it is highly likely that the party suffering a loss will hire an attorney or other representative to help resolve the issue. |
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Miguel has been negotiating with Lucas to settle a claims dispute. The negotiations have come to a stop because Lucas does not believe Miguel is being fair with the proposed settlement amount. Miguel decides to try the lose-win style of negotiation to get discussions going again. How will Miguel use the lose-win style of negotiation? |
Miguel will not emphasize the best outcome and will try to achieve rapport.
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One of the protections many state governments provide to insurer's who suspect insurance fraud as to a claim is
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An extension on the time for investigation when fraud is suspected.
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One common component of anti-fraud legislation enacted by states is |
Expanding the definition of insurance fraud to include reckless conduct.
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Mabel is handling a claim concerning a stolen diamond engagement ring that had been scheduled on a property policy by a married couple. The insured says she removed it to drive a car and placed it on the dashboard, forgot about it, and then forgot to lock her car when she parked it in the city. When she returned to her car the ring was missing. Which one of the following statements is true? |
Mabel should schedule an examination under oath of the insured.
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Obsolete, unsalable, or excess inventory, equipment, or supplies can provide a
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Financial motive for fraudulent claims.
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States address organized crime rings by
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Setting strict penalties to reduce the profit that results from insurance fraud.
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When Madeline finds a dead mouse in her garage, she sees it as an opportunity to make some extra money. She puts it in her purse and goes to lunch at an expensive restaurant. When her soup arrives, she eats several spoonfuls and then surreptitiously drops the dead mouse into the bowl. After a couple of minutes, she screams that there is a dead mouse in her soup. The next day, the restaurant receives notice that she is suing for the distress the incident has caused her. The restaurant immediately notifies its insurer. This is an example of |
Misrepresentation.
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Which one of the following is correct regarding the public's attitude toward insurance fraud? |
Many are not certain about fraud's effect on accessibility of insurance coverage.
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Soft fraud is also known as |
Opportunity fraud.
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After a fire at their home, Dave and Maria submit a claim to their insurer. Among the items for which their insurer provides indemnification are several valuable paintings that had been appraised and scheduled on the policy. Dave and Maria do not tell the insurer that the paintings were on loan to an art gallery at the time of the fire. This omission is referred to as |
Concealment.
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Which one of the following best describes the duties and obligations of insurers with respect to fraudulent claims? |
Most states have laws requiring that insurers report suspicious claims to law enforcement or other authorities.
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Which one of the following best describes the duties and obligations of insurers with respect to fraudulent claims? |
Most states have laws requiring that insurers report suspicious claims to law enforcement or other authorities.
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If a claim representative suspects that a claim is fraudulent, he or she must |
Behave ethically and in good faith when dealing with insured and claimants.
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In order to receive additional compensation, Dr. Smith routinely orders unnecessary diagnostic tests when treating minor injuries. Dr. Smith is involved in |
Soft fraud.
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The criterion most likely to prompt a claim representative to refer a claim to SIU is the |
Extent of the suspected fraud.
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Insurance fraud accounts for which one of the following estimated portion of the property-casualty insurance industry's incurred losses and loss adjustment expenses? |
10%
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One advantage of pursuing civil action in fraud cases is that |
Civil damages can be recovered from the wrongdoers.
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Which one of the following statements concerning anti-fraud efforts in the insurance industry is true? |
Many people are unwilling to contribute money toward such efforts.
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All of the following are common indicators of insurance fraud, EXCEPT: |
The claimant asks for a settlement at a higher value than the insurer places on the claim.
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To combat the dual problem of auto theft and fraudulent auto-repair facilities, some states and insurers require |
Physical inspection of vehicles before providing insurance.
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Claim representative Ida is in the process of handling a fire claim for a new insured, Minda, who said she needed to settle quickly because she was now unemployed and needed the money. Minda seemed to be well versed in insurance procedures and had all the answers before Ida asked for the information. Minda even provided Ida with an inventory of her damaged goods and promised to mail receipts to Ida. Which one of the following statements most likely indicates potential fraud related to Minda's behavior? |
Minda was unusually well-versed in insurance procedures and terminology.
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A law that allows insurers and law enforcement officials to share information about fraudulent activity without facing potential civil lawsuits for defamation, harassment, malicious prosecution, bad faith, or breach of privacy is a(n) |
Immunity statute.
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All of the following are questions to ask when insurance fraud is suspected, EXCEPT: |
Does the suspect have a sloppy manner of dress?
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An employee fakes a neck injury to get a few days of paid time off under workers compensation. This is an example of |
A false claim.
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Which one of the following statements is true about insurance claim "padding"? |
A significant number of consumers believe that it is acceptable.
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Frank has purchased automobile insurance for over 20 years. He calculates that he has paid about $20,000 in premiums to his insurer during this time. When Frank's car is stolen, he makes a claim. He is surprised and angry when the claim representative offers only $12,000 in settlement. As a result, Frank overstates the value of the car in order to increase the amount of the settlement. Which one of the following best describes the motivation for Frank's behavior? |
A sense of entitlement
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Which one of the following is a common cause of insurance fraud? |
Some people believe that the insurance premiums they pay create a fund to which they are entitled.
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Some people who commit insurance fraud belong to organized crime rings. Which one of the following is true regarding organized crime rings? |
Crime rings typically comprise many people including medical providers and lawyers and can involve complex relationships with many corporations.
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Insurance fraud is often wrongly described as a victimless crime because |
The "victim" is a company instead of an individual.
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Which one of the following is a factor that creates an opportunity for insurance fraud? |
Cost-cutting in underwriting departments that reduces inspections
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Mike calls his insurer to report a theft from his garage of a lawnmower, a gas barbecue, an outboard motor, a chainsaw, and an electric hedge trimmer. Although all of the stolen articles were over five years old, Mike indicates to his insurer that they were all brand new. This is an example of a (n) |
Profitable claim.
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Some insurers consider fraud a cost of doing business that can be covered with increased premiums. These insurers |
May ultimately promote fraud
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All of the following are common indicators of insurance fraud, EXCEPT: |
The claimant asks for a settlement at a higher value than the insurer places on the claim.
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Sandra parked her car in a dark, deserted parking lot. When she returned, she found that her car had been broken into. When she filed a claim with her insurer, Sandra reported that $100 in cash had been taken. She did not, in fact, have any cash in the vehicle at the time of the theft but made the report in order to cover her policy deductible. Sandra is guilty of |
Opportunity fraud
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Insurance fraud is often wrongly described as a victimless crime because |
The "victim" is a company instead of an individual.
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Which one of the following is a factor that creates an opportunity for insurance fraud? |
Cost-cutting in underwriting departments that reduces inspections
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All of the following are questions to ask when insurance fraud is suspected, EXCEPT: |
Does the suspect have a sloppy manner of dress?
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Which one of the following statements is true about insurance claim "padding"? |
A significant number of consumers believe that it is acceptable.
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Which one of the following best describes the duties and obligations of insurers with respect to fraudulent claims? |
Many states preclude claimants from launching bad faith claims if claim settlement is delayed by a fraud investigation.
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Sally was in need of cash, so she intentionally set fire to her car in order to obtain money from her auto insurer. This action on Sally's part is considered |
Hard fraud.
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If a claim representative suspects that a claim is fraudulent, he or she must |
Behave ethically and in good faith when dealing with insured and claimants.
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Insurance fraud accounts for which one of the following estimated portion of the property-casualty insurance industry's incurred losses and loss adjustment expenses? |
10%
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After a fire at their home, Dave and Maria submit a claim to their insurer. Among the items for which their insurer provides indemnification are several valuable paintings that had been appraised and scheduled on the policy. Dave and Maria do not tell the insurer that the paintings were on loan to an art gallery at the time of the fire. This omission is referred to as |
Concealment.
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Which one of the following elements must exist for insurance fraud to occur? |
The victim suffers some detriment by relying upon an untrue representation.
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Which one of the following is true regarding the typical staged accident? |
At the time of the staged accident, the person committing the fraud claims to be badly injured, in great pain, and to require ambulance transport to the hospital.
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Some people who commit insurance fraud belong to organized crime rings. Which one of the following is true regarding organized crime rings? |
Crime rings typically comprise many people including medical providers and lawyers and can involve complex relationships with many corporations.
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A law that allows insurers and law enforcement officials to share information about fraudulent activity without facing potential civil lawsuits for defamation, harassment, malicious prosecution, bad faith, or breach of privacy is a(n) |
Immunity statute.
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Mabel is handling a claim concerning a stolen diamond engagement ring that had been scheduled on a property policy by a married couple. The insured says she removed it to drive a car and placed it on the dashboard, forgot about it, and then forgot to lock her car when she parked it in the city. When she returned to her car the ring was missing. Which one of the following statements is true? |
Mabel should schedule an examination under oath of the insured.
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Which one of the following reflects the civil or criminal penalties associated with insurance fraud? |
Statistics show that the number of criminal convictions is growing, especially in states that have had fraud bureaus in place for many years.
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Which one of the following is correct regarding the public's attitude toward insurance fraud? |
Many are not certain about fraud's effect on accessibility of insurance coverage.
|
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Which one of the following statements concerning anti-fraud efforts in the insurance industry is true? |
Many people are unwilling to contribute money toward such efforts.
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The criterion most likely to prompt a claim representative to refer a claim to SIU is the |
Extent of the suspected fraud.
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Which one of the following is a common cause of insurance fraud? |
Some people believe that the insurance premiums they pay create a fund to which they are entitled.
|
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One common component of anti-fraud legislation enacted by states is
|
Expanding the definition of insurance fraud to include reckless conduct.
|
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|
One of the protections many state governments provide to insurer's who suspect insurance fraud as to a claim is |
An extension on the time for investigation when fraud is suspected.
|
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A garage or lot to which stolen vehicles are brought to be stripped of their components is commonly referred to as a |
Chop shop.
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When Madeline finds a dead mouse in her garage, she sees it as an opportunity to make some extra money. She puts it in her purse and goes to lunch at an expensive restaurant. When her soup arrives, she eats several spoonfuls and then surreptitiously drops the dead mouse into the bowl. After a couple of minutes, she screams that there is a dead mouse in her soup. The next day, the restaurant receives notice that she is suing for the distress the incident has caused her. The restaurant immediately notifies its insurer. This is an example of |
Misrepresentation.
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Claim representative Ida is in the process of handling a fire claim for a new insured, Minda, who said she needed to settle quickly because she was now unemployed and needed the money. Minda seemed to be well versed in insurance procedures and had all the answers before Ida asked for the information. Minda even provided Ida with an inventory of her damaged goods and promised to mail receipts to Ida. Which one of the following statements most likely indicates potential fraud related to Minda's behavior? |
Minda was unusually well-versed in insurance procedures and terminology.
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Which one of the following statements is most true regarding anti-fraud efforts of governments and insurers? |
Anti-fraud efforts must start with the public.
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States address organized crime rings by |
Setting strict penalties to reduce the profit that results from insurance fraud.
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Those practicing active listening can experience barriers that would reduce the effectiveness of the process, such as using the same wording for every response to the sender. Which one of the following is the best selection as another barrier to active listening?
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Underreaching
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Sam was conducting the monthly progress review meeting with all of the help desk associates. Sam had requested that April supply a report on the maintenance efforts for the telephone system so that all associates would be aware of the functionality changes. After Sam introduced April, she began shuffling her documents and discussed the system changes in random order. In this meeting April's actions would most likely convey which one of the following based on nonverbal cues? |
Disorganization
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Sam was conducting the monthly progress review meeting with all of the help desk associates. Sam had requested that April supply a report on the maintenance efforts for the telephone system so that all associates would be aware of the functionality changes. After Sam introduced April, she began shuffling her documents and discussed the system changes in random order. In this meeting April's actions would most likely convey which one of the following based on nonverbal cues? |
Disorganization
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When a sender shares information in the communication process, which one of the following phases is occurring? |
Transmission
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Mark is a claim representative for AMM Insurance who handles liability losses. One of Mark's major tasks is to take recorded statements for each claim. A new claim was received by Mark and he recognized the claimant's name and Mark immediately felt that this was not a valid claim. When taking the recorded statement, Mark allowed the claimant to speak asking few questions because he felt that this recorded statement was only an exercise because the injury was likely not severe. Which one of the following best identifies the risk that Mark is undertaking in this approach? |
Hampering rapport by being insincere
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Dennis reported for work wearing a suit and tie for the client review meeting that he would be conducting. When Dennis entered the meeting room he found that he was the first to arrive. Which one of the following nonverbal expression best identifies Dennis' actions? |
Professionalism
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When a receiver responds during the communication process, it is best identified as which one of the following phases? |
Feedback
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A technique that helps listeners correctly interpret messages is referred to as which one of the following? |
Reflective listening
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Harry was conducting the monthly progress review meeting with all of the help desk associates. Two meeting attendees, Sam and Rick, were tardy for the third consecutive meeting. In this meeting the actions of Sam and Rick would most likely convey which one of the following based on nonverbal cues? |
Avoidance
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Melissa was working on an automobile liability claim and attempting to obtain a recorded statement of the events that lead up to the accident from the policyholder. As the person taking the recorded statement and asking questions of the policyholder, Melissa is best identified as which one of the following? |
Sender
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When a claimant conveys a nonverbal cue that contradicts a verbal communication it would most likely mean that a claim representative should do which one of the following? |
Add lines of questioning
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Shelly was handling a bodily injury claim, where the insured's grandson had been cut by a saw blade. Shelly wanted to obtain a statement from the insured to fully understand how the injury occurred in order to determine whether the insured was liable for the injury. Shelly had been conducting a recorded statement with the insured for 20 minutes, when she stopped the insured and asked directly what the insured had done to cause the injury because it sounded like the grandson was the cause of his own injury. Which one of the following would best identify Shelly's missed opportunity in this communication sequence? |
Showing empathy for the incident.
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When John began handling a fire loss for Roy Smith, he was unsure whether or not there would be coverage for the loss itself. John decided to write a letter to explain what actions Roy needed to take for the handling of his claim to proceed and included identification of the questionable issues of the loss and that these issues may impact coverage under the policy which could result in a denial of Roy's claim. John also requested that Roy sign a document that neither the insurer nor insured under the policy were waiving rights under the policy during the claim investigation. The document that John requested Roy sign is best identified as which one of the following? |
Nonwaiver agreement
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Kevin was handling a complex bodily injury claim and was in regular discussions with all parties involved in the claim. Kevin was hosting a formal meeting with the claimant and the claimant's attorney and was requesting the claimant sign a release for a settlement of the claim. Which one of the following best identifies the purpose of Kevin's communication at this stage? |
Negotiation
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If a written communication is required by law or may be material to legal proceedings, the document should provide accuracy and which one of the following? |
Clarity
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Writing an effective message is a process; drafting and revising the communication is important. The revision stage for written communication involves which one of the following? |
Correcting
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When John began handling a fire loss for Roy Smith, he was unsure whether or not there would be coverage for the loss itself. John decided to write a letter to explain what actions Roy needed to take for the handling of his claim to proceed and included identification of the questionable issues of the loss and that these issues may impact coverage under the policy which could result in a denial of Roy's claim. John's written communication to Roy Smith is best identified as which one of the following? |
Reservation of rights letter
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Nonverbal communication is useful during in-person meetings. Which one of the following best identifies a way in which nonverbal communication may assist in verbal communication? |
Confirmation
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Nonverbal communication is useful during in-person meetings. Which one of the following best identifies a way in which nonverbal communication may assist in verbal communication? |
Confirmation
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Mark is a claim representative for ABC Insurance who handles liability losses. One of Mark's major tasks is to take recorded statements for each claim. A new claim was received by Mark and he recognized the claimant's name and Mark immediately felt that this was not a valid claim. When taking the recorded statement, Mark allowed the claimant to speak and then paraphrased the claimant's statements to verify an understanding of the claimant's message. Which one of the following best identifies the approach that Mark is undertaking? |
Reflective listening
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Sam is handling a property damage claim for Joe and Ellen Smith. In order to conclude the payment for the claim, Sam needs to obtain a signed proof of loss. Sam writes a letter and encloses the proof of loss with instructions to complete and return the proof of loss for payment. The letter that Sam writes is best identified as which one of the following in the communication process? |
Medium
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If a written communication is required by law or may be material to legal proceedings, the document should provide accuracy and which one of the following? |
Clarity
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Harry was conducting the monthly progress review meeting with all of the help desk associates. Two meeting attendees, Sam and Rick, were tardy for the third consecutive meeting. In this meeting the actions of Sam and Rick would most likely convey which one of the following based on nonverbal cues? |
Avoidance
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As a claim representative for Reliable Insurance, Dan would handle various liability claims. On any given claim, Dan could be working with an insured, agent, claimant, or attorney. In order for Dan to be an effective communicator he should use which one of the following? |
The perspective of the other party
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Writing an effective message is a process; drafting and revising the communication is important. The revision stage for written communication involves which one of the following? |
Correcting
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Melissa was working on an automobile liability claim and attempting to obtain a recorded statement of the events that lead up to the accident from the policyholder. As the person taking the recorded statement and asking questions of the policyholder, Melissa is best identified as which one of the following? |
Sender
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When John began handling a fire loss for Roy Smith, he was unsure whether or not there would be coverage for the loss itself. John decided to write a letter to explain what actions Roy needed to take for the handling of his claim to proceed and included identification of the questionable issues of the loss and that these issues may impact coverage under the policy which could result in a denial of Roy's claim. John also requested that Roy sign a document that neither the insurer nor insured under the policy were waiving rights under the policy during the claim investigation. The document that John requested Roy sign is best identified as which one of the following? |
Nonwaiver agreement
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When a receiver responds during the communication process, it is best identified as which one of the following phases? |
Feedback
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When a claim representative utilizes active listening skills it can assist with which one of the following? |
Interpret spoken messages accurately
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Kevin was handling a complex bodily injury claim and was in regular discussions with all parties involved in the claim. Kevin was hosting a formal meeting with the claimant and the claimant's attorney and was requesting the claimant sign a release for a settlement of the claim. Which one of the following best identifies the purpose of Kevin's communication at this stage? |
Negotiation
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A nonverbal expression that conveys a lack of sincerity is best identified to which one of the following actions? |
Shifting eye movement
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Kevin was handling a complex bodily injury claim and was in regular discussions with all parties involved in the claim. Kevin was utilizing a casual tone in conversations during a meeting with the claimant and the attorney and was requesting the claimant sign an authorization for access to financial and medical records. Which one of the following best identifies the purpose of Kevin's communication at this stage? |
Investigation
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The denial of a claim is typically determined by a claim representative. A claim denial letter should be written with great care, stating the basis for the denial of the claim. All of the following are bases for claim denials, EXCEPT: |
Bad-faith
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Sam was conducting the monthly progress review meeting with all of the help desk associates. Sam had requested that April supply a report on the maintenance efforts for the telephone system so that all associates would be aware of the functionality changes. After Sam introduced April, she began shuffling her documents and discussed the system changes in random order. In this meeting April's actions would most likely convey which one of the following based on nonverbal cues? |
Disorganization
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Annette was working on an automobile liability claim and attempting to obtain a recorded statement of the events that lead up to the accident from the policyholder. As the person answering questions for the recorded statement from Annette, the policyholder is best identified as which one of the following? |
Receiver |
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There are four major purposes of claim communications; two are investigation and negotiation. Which one of the following best identifies one of the other two purposes? |
Evaluation |
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Dennis reported for work wearing a suit and tie for the client review meeting that he would be conducting. When Dennis entered the meeting room he found that he was the first to arrive. Which one of the following nonverbal expression best identifies Dennis' actions? |
Professionalism
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Stella was discussing the new claim distribution process with her team. The team was supplying information on the results and performance metrics after the first week of implementation for the new distribution process. The team spoke about the drop in cycle time for the period between assignment and pickup of the claim by the claim representative. Stella determined that the delay was user error, because the team advised that the system did not contain any deliver errors in the follow up reports. Stella's determination is best identified as which one of the following?
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Decoding
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A technique that helps listeners correctly interpret messages is referred to as which one of the following? |
Reflective listening
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Those practicing active listening can experience barriers that would reduce the effectiveness of the process, such as using the same wording for every response to the sender. Which one of the following is the best selection as another barrier to active listening? |
Underreaching
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There are six general types of individuals who are encountered in a claim representative's daily communications. A person who understands insurance language, the claim process, and communicates on behalf of the insured is best identified as which one of the following? |
Agent
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Mark is a claim representative for AMM Insurance who handles liability losses. One of Mark's major tasks is to take recorded statements for each claim. A new claim was received by Mark and he recognized the claimant's name and Mark immediately felt that this was not a valid claim. When taking the recorded statement, Mark allowed the claimant to speak asking few questions because he felt that this recorded statement was only an exercise because the injury was likely not severe. Which one of the following best identifies the risk that Mark is undertaking in this approach? |
Hampering rapport by being insincere
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Kelly, as a claim representative for ABC Insurance, was working to resolve an automobile claim where the vehicle was a total loss. Kelly had made several calls to the insured which all ended with less than acceptable terms and a constant request to call back in the evening to speak with the spouse. Kelly finally made contact with the spouse in the evening and had a brief discussion using the same set of facts and resolved the claim. Which one of the following factors is the best selection to identify the communication barrier that Kelly experienced? |
Culture
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As the claim representative assigned to a file for a fire loss for April Reardon, Sally needed to forward the necessary claim forms for completion and submission by April. Sally made her initial contact via the telephone and met with April at the loss location. Sally learned that April was employed at the local convenience store and that some of her most prized possessions lost in the fire were her high school awards, and that she wished she had taken the opportunity to attend a local college. April returned to her office and drafted a letter that contained concise bullet point instructions, with a note of reference for each form that the instructions pertained to at the end of each statement. Sally's written communication reflected her use of meeting and conversing with April to do which one of the following? |
Know the intended audience.
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Dennis reported for work wearing a suit and tie for the client review meeting that he would be conducting. When Dennis entered the meeting room he found that he was the first to arrive. Dennis had requested that the underwriter for the account, Ron, attend the meeting and be prepared to review any risks that were of a concern for the client renewal. Ron was allotted 20 minutes of time and ended up using 40 minutes. Which one of the following nonverbal expressions best identifies Ron's actions? |
Higher importance
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Sally knew that the data entry process for claim submissions was behind so she called the administrative team together to implement a new plan to streamline entry of like claims to specific individuals. Sally's communication with the administrative team is best identified as which one of the following? |
Encoding
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Data quality management is important for working with claim data. Critical decisions are made with claim data for pricing, reserving and which one of the following?
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Investing
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A map can be used to show the location of places that are relevant to the case. Maps should be prepared by professionally trained |
Engineers.
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Ron was the adjuster for ABC Insurance and was handling an automobile claim with a subrogation interest. After the accident, a vehicle inspection determined that the steering system had failed which caused the insured to strike a building. Ron adjusted the claim for the physical damage to the automobile and the building and concluded the salvage disposal. Upon presenting the subrogation claim to the automobile manufacturer they demanded to inspect the vehicle. Which one of the following actions would best protect Ron from a claim of spoliation from the automobile manufacturer? |
Preserve the parts in question
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There are three qualities that show recorded statements to be effective. One of these qualities is Coherence. Which one of the following best identifies another quality for an effective recorded statement? |
Completeness
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Mike reported a claim for property damage to his home. The damage involved a collapse of part of the structure and appeared to be related to the grading around the home as well as the land near to the lot that Mike's home was on. In order to appropriately document the cause of the damage, which one of the following would be the best selection? |
Maps
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"Did you see the Buick turn left in front of the Ford?" is an example of |
A leading question.
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Which one of the following sworn statements has little cost associated with them, and provide a valuable method of obtaining and preserving information about the facts of a loss? |
Recorded statements
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Many state governments and the federal government require reporting of suspected fraudulent claims by insurers and special investigation units (SIU's). State and federal governments use insurance fraud statistics to develop |
Prevention services.
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Some specialty reporting is beneficial
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In attempts to recover lost or stolen high-value property.
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ABC Insurance was working hard to improve its financial standing so that the need to raise policy rates would diminish. In order to improve its financial standing the claims department was requested to review and reassess every open claim file. Which one of the following best identifies a reason for this action by ABC Insurance? |
To provide a realistic projection of possible losses.
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Ron was the adjuster for ABC Insurance and was handling an automobile claim with a subrogation interest. After the accident, a vehicle inspection determined that the steering system had failed which caused the insured to strike a building. Ron adjusted the claim for the physical damage to the automobile and the building and concluded the salvage disposal. Upon presenting the subrogation claim to the automobile manufacturer they demanded to inspect the vehicle. Which one of the following actions would best protect Ron from a claim of spoliation from the automobile manufacturer? |
Take photos of the automobile
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Sam was involved in an automobile accident where he failed to stop at an intersection. Sam advised that he had slammed on his brakes but continued to skid through the intersection, striking the home on the North corner and hitting another vehicle. The individual in the other car was injured but Sam advised that the other car also was required to stop before entering the intersection. In order to verify events and determine the degree of liability for Sam, which one of the following would be the best selection for documentation?
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Photographs of the intersection
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Photos of an auto accident should be taken
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As soon as possible after the accident.
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An insured is listed on a police report as the party causing the accident. The claim representative |
Needs to take the statement to confirm the information recorded by the police.
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Specialty reporting helps deter theft of which one of the following? |
Mobile equipment
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Which one of the following types of sworn statements provides the insurer with an opportunity to assess how the insured will perform as a witness during the litigation process? |
Examination under oath (EUO)
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Sam was involved in an automobile accident where he failed to stop at an intersection. Sam advised that he had slammed on his brakes but continued to skid through the intersection, striking the home on the North corner and hitting another vehicle. The individual in the other car was injured but Sam advised that the other car also was required to stop before entering the intersection. In order to verify the bodily injury and recovery of the other party, which one of the following would be the best selection for documentation? |
Video of the activities of the other party
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Which one of the following should be noted on a diagram of an accident scene? |
Location
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Which one of the following is an example of a sworn statement? |
Affidavit
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The U. S. Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), Section 111 create mandatory reporting requirements for which one of the following? |
Self-insureds
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Deb was taking a recorded statement from an insured for a theft claim. During the statement Deb asked the insured to provide her name, address, telephone number, Social Security number, and driver's license number. Deb was following which one of the Seven-Part Method for recorded statements? |
Identification
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Recorded statements sometimes are the only type of sworn statement available to a claim representative during the investigation phase of a claim in which one of the following lines of insurance? |
Commercial general liability
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Representational documents are typically used to illustrate a loss scene as well as which one of the following? |
How an accident occurred
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Tammy Smith was analyzing claim data in order to reassess the territorial boundaries and the relation to fire stations in the state of Ohio. Tammy found that the previous territories were inappropriately grouped and that new segments were warranted. Which one of the following best identifies the stakeholder position that Tammy has? |
Statistical Agent
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A measure of losses and loss adjustment expenses against earned premiums which reflects the percentage of premiums being consumed by losses is identified as which one of the following? |
Loss ratio
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Claim representatives should take special care to eliminate visual distortions in photos since they are more likely to be challenged in court. For example, for close-up photos, which one of the following could be used as a point of reference to accurately depict size or dimension? |
A ruler
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Alan was adjusting a liability claim and had prepared to send copies of the file documentation to verify that the insured was not as severely injured as the claim that was presented for damages. During the shipment of the file, the courier vehicle caught fire and the file was destroyed. Which one of the following is most accurate about Alan's claim as a defense should spoliation be brought up by the other party? |
The evidence can be reconstructed
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When spoliation of evidence is found by a court and the jury is instructed to find that had the evidence been available it would have been against the interests of the spoliator, the court is allowing for |
An adverse inference.
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There are six valid defenses for spoliation of evidence claims. Which one of the following best identifies one of these defenses?
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Litigation was not contemplated when the evidence was destroyed
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Which one of the following is an appropriate response for a claim representative if the interviewee must interrupt a recorded statement for several minutes? |
Stop the recorder after explaining the reason for the interruption and begin recording again when the interviewee returns.
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Sally was adjusting losses for Reliable Insurance and handled a fire loss for a home where a small fire occurred near the coffee pot and caused heavy smoke damage throughout the kitchen and burns to the cabinetry. The cause of the loss was not clear at the time, but a recall on the coffee pot for a faulty heating element that could overheat and cause a fire was received two months after the claim was settled.Sally copied the claim file and submitted a subrogation claim because the damages appeared to be caused by the coffee pot appliance. The manufacturer attempted to reject the claim based on spoliation of evidence. Which one of the following would be the best defense in this claim for subrogation? |
Litigation was not contemplated when the evidence was destroyed
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Reliable Insurance was experiencing a loss in regards to the premium taken in and the loss expenses that were being paid. The organizational leaders wanted to improve the financial standing of the company. Which one of the following actions would be the best selection for achieving this goal? |
Stronger investment of earned premiums.
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Which one of the following is an example of a sworn statement? |
Affidavit
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Ron was the adjuster for ABC Insurance and was handling an automobile claim with a subrogation interest. After the accident, a vehicle inspection determined that the steering system had failed which caused the insured to strike a building. Ron adjusted the claim for the physical damage to the automobile and the building and concluded the salvage disposal. Upon presenting the subrogation claim to the automobile manufacturer they demanded to inspect the vehicle. Which one of the following actions would best protect Ron from a claim of spoliation from the automobile manufacturer? |
Preserve the parts in question
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Which one of the following is true regarding a claim representative's use of leading questions during statements? |
A leading question undermines the credibility of statements at trial.
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Which one of the following sworn statements is obtained by mailing? |
Proof of claim
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Data quality management is important for working with claim data. Critical decisions are made with claim data for pricing, reserving and which one of the following? |
Investing
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One disadvantage of a recorded statement is that |
Transcription adds to costs.
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Which one of the following sworn statements has little cost associated with them, and provide a valuable method of obtaining and preserving information about the facts of a loss? |
Recorded statements
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A map can be used to show the location of places that are relevant to the case. Maps should be prepared by professionally trained |
Engineers
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Under the Insurance Services Offices (ISO) special form, which of the following parties is required to provide a statement under oath? |
Insureds
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Anyone who takes photos at an accident scene should be prepared to testify as to |
Camera settings.
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Some specialty reporting is beneficial
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In attempts to recover lost or stolen high-value property.
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Many state governments and the federal government require reporting of suspected fraudulent claims by insurers and special investigation units (SIU's). State and federal governments use insurance fraud statistics to develop |
Prevention services.
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Ron was the adjuster for ABC Insurance and was handling an automobile claim with a subrogation interest. After the accident, a vehicle inspection determined that the steering system had failed which caused the insured to strike a building. Ron adjusted the claim for the physical damage to the automobile and the building and concluded the salvage disposal. Upon presenting the subrogation claim to the automobile manufacturer they demanded to inspect the vehicle. Ron's disposal of the automobile salvage prior to concluding the subrogation claims is best identified as which one of the following? |
Spoliation of evidence
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A measure of losses and loss adjustment expenses against earned premiums which reflects the percentage of premiums being consumed by losses is identified as which one of the following? |
Loss ratio
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Sam was involved in an automobile accident where he failed to stop at an intersection. Sam advised that he had slammed on his brakes but continued to skid through the intersection, striking the home on the North corner and hitting another vehicle. The individual in the other car was injured but Sam advised that the other car also was required to stop before entering the intersection. In order to verify the bodily injury and recovery of the other party, which one of the following would be the best selection for documentation? |
Video of the activities of the other party
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|
|
Sam was involved in an automobile accident where he failed to stop at an intersection. Sam advised that he had slammed on his brakes but continued to skid through the intersection, striking the home on the North corner and hitting another vehicle. The individual in the other car was injured but Sam advised that the other car also was required to stop before entering the intersection. In order to verify events and determine the degree of liability for Sam, which one of the following would be the best selection for documentation? |
Photographs of the intersection
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When a bodily injury claim is filed by a Medicare-eligible claimant or plaintiff, the insurer or self-insured organization is required to electronically submit information on the identity of that claim to the |
Centers for Medicare and Medicaid Services.
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Tammy Smith was analyzing claim data in order to reassess the territorial boundaries and the relation to fire stations in the state of Ohio. Tammy found that the previous territories were inappropriately grouped and that new segments were warranted. Which one of the following best identifies the stakeholder position that Tammy has? |
Statistical Agent
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Which one of the following types of questions requires an explanation on the part of the interviewee but also allows the interviewee flexibility in responding? |
An open-ended question
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States use statistics on workers compensation bodily injury claims to develop state safety codes for various workplaces and to |
Properly staff workers compensation regulatory offices.
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Photographs, maps, diagrams, and video are useful means to document evidence for a claim. These items are most appropriately referred to as which one of the following? |
Representational documents
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Claim representatives should take special care to eliminate visual distortions in photos since they are more likely to be challenged in court. For example, for close-up photos, which one of the following could be used as a point of reference to accurately depict size or dimension? |
A ruler
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Mike reported a claim for property damage to his home. The damage involved a collapse of part of the structure and appeared to be related to the grading around the home as well as the land near to the lot that Mike's home was on. In order to appropriately document the cause of the damage, which one of the following would be the best selection? |
Maps
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For serious or complex claims which one of the following photo types should be used? |
Photos taken with film
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Which one of the following sworn statements is obtained by mailing?
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Affidavit
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Which one of the following factors can be used to assess whether an insurer's request for information is reasonable?
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Is the request specific and not too vague
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Which one of the following actions prepares claim representatives for most potential reactions and helps them maintain control of the conversation when dealing with emotional or irate customers?
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Common sense
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Statements provided on a notice of loss form should be used as which one of the following?
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Reference
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Sarah had been adjusting liability claims for ten years and maintained a log of settlements on her files based on injury, legal involvement, and time of settlement. Sarah was adjusting an injury claim and received notice the claimant had recently hired a local attorney who had a reputation for only taking good cases. Sarah researched her log of like claims for settlement values and considered the reputation of the attorney to adjust the file reserve to $50,000. Which one of the following factors was a focus for adjusting the claim reserve based on the individual case method? |
Claimant representation
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A notice of loss was received and it provided the name of the agency, the policy number, the insured name and contact information, and details of the loss. The claim representative assigned reviewed the loss details and then contacted the insured. The details from the insured did not match the loss report. The claim representative should do which one of the following? |
Request further documentation
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The Internet can facilitate the inspection of a loss thousands of miles from where the claim representative is located when the claim representative uses the Internet to |
Contact a local representative who can inspect and report on the damage.
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Ron was investigating an automobile accident and took a statement from the insured. Ron asked questions such as "The light was green wasn't it?" and "You were already through the turn when hit?". These questions would show the investigation to contain which one of the following elements? |
Bias
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Reserve adequacy and accuracy are important for supporting an insurer’s continued solvency and |
Capacity
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Which one of the following are included on a notice of loss form? |
Agency
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Reserve errors may be caused by a number of factors, including
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Stairstepping reserves rather than setting reserve for ultimate claim value.
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As a claim representative for ABC Insurance, Max regularly adjusted theft claims. Max had received a loss and spent several weeks taking statements from the insured and documenting the facts that were presented by witnesses. Max then determined that the claim was not valid and denied the claim. Which one of the following identifies an exposure for risk beyond the policy limits for the insurer from the adjustment of this claim? |
Not documenting facts from the insured
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Which one of the following is a hazard that a claims representative should be wary of in auto repair facilities, drive-in facilities, and towing and salvage yards? |
Uneven ground or surfaces
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The first step in confirming coverage is
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Matching the information on the loss notice to the relevant policy.
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During the handling of a theft claim the claim representative requested that the insured submit receipts for all jewelry that she owned, an appraisal for the items reported as stolen, the police report, and that the insurer come into the office to provide a recorded statement. Which one of the following best identifies a reason for the insured to have no duty to cooperate with these requests? |
The request for all jewelry receipts is not relevant to the claim
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A predisposition to a particular outcome is best identified as which one of the following? |
Bias
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A claim representative was reviewing an automobile loss after receiving the police report for the incident. The insured had reported that they were making a right turn on a green light, when a vehicle struck them making a left turn from oncoming traffic. The claimant had reported that they had a green light, but the police report was showing that the traffic signal for the claimant had just turned yellow based on a witness that was behind the claimant vehicle. The claim representative decided that the original reserve was sufficient because the insured's actions showed minimal if no negligence. The claim representative's decision in regards to the file reserve was based on which one of the following six factors from the individual case method? |
Liability factors
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Judy was adjusting a loss for fire damages on a residential property insured by ABC Insurance. She had contacted the insured, inspected the loss, obtained and reviewed the fire report, conducted a cause and origin investigation for the fire. Judy's investigation was indicating the cause was arson and that the insured was involved. Judy contacted the insured and discussed the facts of the loss and coverage under the policy. During the call Judy advised the insured that the claim would be denied. Which one of the following actions would assist in preventing an exposure for lack of good faith in handling this claim? |
Consult with legal counsel
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Considerations a claim representative uses when setting reserves on a bodily injury claim using the individual case method include |
Claim circumstances and representative's experience.
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In property claims, most claim representatives prefer the insured provide which one of the following documents before demanding an examination under oath (EUO)? |
Proof of loss
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The starting point of an auto claim investigation for a claim representative is |
Receipt of the loss notification form.
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A method of setting reserves based on the claim’s circumstances and the claim representative’s experience in handling similar claims is the |
Individual case method.
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Field claim representatives may conduct investigations or inspections in crime-prone areas. If the claim representative feels unsafe, he or she should |
Leave the area immediately.
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After working on a liability claim for bodily injury from a bar fight for a commercial policy, the adjuster was concerned with the value of the reserve. New medical bills were submitted along with narrative for the injury status, continued treatment, and future recovery potential. The claim representative reviewed the amount of the bills received to date and projected what value future treatment might have. Based on these facts the claim reserve was raised from $25,000 to $50,000. Which one of the six factors in the individual case method were used to determine the new file reserve? |
Special damages
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Which one of the following best identifies a fair duty to cooperate on behalf of the insured based on the policy? |
Comply with the insurer's reasonable request
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Industry databases are investigative tools which contain claim information from a variety of sources. The oldest and largest of these industry databases is |
ISO ClaimSearch.
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Sam was assigned to adjust large liability losses at Reliable Insurance. He had received a claim for a dog bite to a child. The insured had kept the dog restrained, but the five year old child (who lived next door) had wandered away from his home and into the insured's yard. When the child was within reach of the dog, the dog bite the child's arm; which required thirty stitches. Sam decided that he would assign a reserve for the file of $30,000.00 because the child was a minor. Sam was focusing on which one of the six steps from the individual case method in evaluating the loss for a reserve? |
Claimant profile
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A statement is a record of the events surrounding an accident as told by the interviewee. Statements are best taken shortly after the loss occurs so that |
Time does not diminish the person's memory of the event.
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During a property inspection if clean-up or repair work has already begun, the claims representative should do which one of the following to ensure physical safety?
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Wear protective gloves
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Sarah had been adjusting liability claims for ten years and maintained a log of settlements on her files based on injury, legal involvement, and time of settlement. Sarah was adjusting an injury claim and received notice the claimant had recently hired a local attorney who had a reputation for only taking good cases. Sarah researched her log of like claims for settlement values and considered the reputation of the attorney to adjust the file reserve to $50,000. Which one of the following factors was a focus for adjusting the claim reserve based on the individual case method? |
Claimant representation
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|
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Sam was assigned to adjust large liability losses at Reliable Insurance. He had received a claim for a dog bite to a child. The insured had kept the dog restrained, but the five year old child (who lived next door) had wandered away from his home and into the insured's yard. When the child was within reach of the dog, the dog bite the child's arm; which required thirty stitches. Sam decided that he would assign a reserve for the file of $30,000.00 because the child was a minor. Sam was focusing on which one of the six steps from the individual case method in evaluating the loss for a reserve? |
Claimant profile
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Statements provided on a notice of loss form should be used as which one of the following? |
Reference
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The following policy language, "We may investigate and settle any claim or suit that we decide is appropriate.", grants the claim representative the authority to do which one of the following? |
Investigate the claim
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A claim was reassigned to a new representative due to the location of the loss. The loss was for an automobile bodily injury claim where the claimant had sustained severe injuries to the right side of the body. The claimant had completed rehabilitation but continued to struggle to return to work. The new claim representative reviewed the medical records and determined that the 25 year old graduate from the State University had been on track to take on a leadership role for the employer just prior to the accident but due to the injuries the promotion had not taken place. The new claim representative felt that the struggle to fully recover were hampering the claimant's ability to progress at work, amplifying the damages. Therefore, the file reserve was raised. Which one of the six factors from the individual case method were used to amend the file reserve? |
Claimant profile
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As a claim representative for ABC Insurance, Max regularly adjusted theft claims. Max had received a loss and spent several weeks taking statements from the insured and documenting the facts that were presented by witnesses. Max then determined that the claim was not valid and denied the claim. Which one of the following identifies an exposure for risk beyond the policy limits for the insurer from the adjustment of this claim? |
Not documenting facts from the insured
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Which one of the following best identifies a fair duty to cooperate on behalf of the insured based on the policy? |
Comply with the insurer's reasonable request
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For reference and advice on how to safely handle contact situations for any hazardous materials that could be present in an auto body shop, a claim representative can request which one of the following from the auto body shop? |
A Material Safety Data Sheet
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A statement is a record of the events surrounding an accident as told by the interviewee. Statements are best taken shortly after the loss occurs so that |
Time does not diminish the person's memory of the event.
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Which one of the following factors can be used to assess whether an insurer's request for information is reasonable?
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Is the request specific and not too vague
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Which one of the following actions prepares claim representatives for most potential reactions and helps them maintain control of the conversation when dealing with emotional or irate customers?
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Common sense
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Statements provided on a notice of loss form should be used as which one of the following?
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Reference
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Sarah had been adjusting liability claims for ten years and maintained a log of settlements on her files based on injury, legal involvement, and time of settlement. Sarah was adjusting an injury claim and received notice the claimant had recently hired a local attorney who had a reputation for only taking good cases. Sarah researched her log of like claims for settlement values and considered the reputation of the attorney to adjust the file reserve to $50,000. Which one of the following factors was a focus for adjusting the claim reserve based on the individual case method? |
Claimant representation
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A notice of loss was received and it provided the name of the agency, the policy number, the insured name and contact information, and details of the loss. The claim representative assigned reviewed the loss details and then contacted the insured. The details from the insured did not match the loss report. The claim representative should do which one of the following? |
Request further documentation
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The Internet can facilitate the inspection of a loss thousands of miles from where the claim representative is located when the claim representative uses the Internet to |
Contact a local representative who can inspect and report on the damage.
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Ron was investigating an automobile accident and took a statement from the insured. Ron asked questions such as "The light was green wasn't it?" and "You were already through the turn when hit?". These questions would show the investigation to contain which one of the following elements? |
Bias
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Reserve adequacy and accuracy are important for supporting an insurer’s continued solvency and |
Capacity
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Which one of the following are included on a notice of loss form? |
Capacity.
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Which one of the following are included on a notice of loss form? |
Agency
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Reserve errors may be caused by a number of factors, including
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Stairstepping reserves rather than setting reserve for ultimate claim value.
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As a claim representative for ABC Insurance, Max regularly adjusted theft claims. Max had received a loss and spent several weeks taking statements from the insured and documenting the facts that were presented by witnesses. Max then determined that the claim was not valid and denied the claim. Which one of the following identifies an exposure for risk beyond the policy limits for the insurer from the adjustment of this claim? |
Not documenting facts from the insured
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Which one of the following is a hazard that a claims representative should be wary of in auto repair facilities, drive-in facilities, and towing and salvage yards? |
Uneven ground or surfaces
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The first step in confirming coverage is
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Matching the information on the loss notice to the relevant policy.
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During the handling of a theft claim the claim representative requested that the insured submit receipts for all jewelry that she owned, an appraisal for the items reported as stolen, the police report, and that the insurer come into the office to provide a recorded statement. Which one of the following best identifies a reason for the insured to have no duty to cooperate with these requests? |
The request for all jewelry receipts is not relevant to the claim
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A predisposition to a particular outcome is best identified as which one of the following? |
Bias
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A claim representative was reviewing an automobile loss after receiving the police report for the incident. The insured had reported that they were making a right turn on a green light, when a vehicle struck them making a left turn from oncoming traffic. The claimant had reported that they had a green light, but the police report was showing that the traffic signal for the claimant had just turned yellow based on a witness that was behind the claimant vehicle. The claim representative decided that the original reserve was sufficient because the insured's actions showed minimal if no negligence. The claim representative's decision in regards to the file reserve was based on which one of the following six factors from the individual case method? |
Liability factors
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Considerations a claim representative uses when setting reserves on a bodily injury claim using the individual case method include |
Claim circumstances and representative's experience.
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Judy was adjusting a loss for fire damages on a residential property insured by ABC Insurance. She had contacted the insured, inspected the loss, obtained and reviewed the fire report, conducted a cause and origin investigation for the fire. Judy's investigation was indicating the cause was arson and that the insured was involved. Judy contacted the insured and discussed the facts of the loss and coverage under the policy. During the call Judy advised the insured that the claim would be denied. Which one of the following actions would assist in preventing an exposure for lack of good faith in handling this claim? |
Consult with legal counsel
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In property claims, most claim representatives prefer the insured provide which one of the following documents before demanding an examination under oath (EUO)? |
Proof of loss
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The starting point of an auto claim investigation for a claim representative is |
Receipt of the loss notification form.
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A method of setting reserves based on the claim’s circumstances and the claim representative’s experience in handling similar claims is the |
Individual case method.
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Field claim representatives may conduct investigations or inspections in crime-prone areas. If the claim representative feels unsafe, he or she should |
Leave the area immediately.
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After working on a liability claim for bodily injury from a bar fight for a commercial policy, the adjuster was concerned with the value of the reserve. New medical bills were submitted along with narrative for the injury status, continued treatment, and future recovery potential. The claim representative reviewed the amount of the bills received to date and projected what value future treatment might have. Based on these facts the claim reserve was raised from $25,000 to $50,000. Which one of the six factors in the individual case method were used to determine the new file reserve? |
Special damages
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Which one of the following best identifies a fair duty to cooperate on behalf of the insured based on the policy? |
Comply with the insurer's reasonable request
|
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|
Industry databases are investigative tools which contain claim information from a variety of sources. The oldest and largest of these industry databases is |
ISO ClaimSearch.
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|
Sam was assigned to adjust large liability losses at Reliable Insurance. He had received a claim for a dog bite to a child. The insured had kept the dog restrained, but the five year old child (who lived next door) had wandered away from his home and into the insured's yard. When the child was within reach of the dog, the dog bite the child's arm; which required thirty stitches. Sam decided that he would assign a reserve for the file of $30,000.00 because the child was a minor. Sam was focusing on which one of the six steps from the individual case method in evaluating the loss for a reserve? |
Claimant profile
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|
A statement is a record of the events surrounding an accident as told by the interviewee. Statements are best taken shortly after the loss occurs so that |
Time does not diminish the person's memory of the event.
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During a property inspection if clean-up or repair work has already begun, the claims representative should do which one of the following to ensure physical safety?
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Time does not diminish the person's memory of the event.
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During a property inspection if clean-up or repair work has already begun, the claims representative should do which one of the following to ensure physical safety?
|
Wear protective gloves
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Sarah had been adjusting liability claims for ten years and maintained a log of settlements on her files based on injury, legal involvement, and time of settlement. Sarah was adjusting an injury claim and received notice the claimant had recently hired a local attorney who had a reputation for only taking good cases. Sarah researched her log of like claims for settlement values and considered the reputation of the attorney to adjust the file reserve to $50,000. Which one of the following factors was a focus for adjusting the claim reserve based on the individual case method? |
Claimant representation
|
|
|
Sam was assigned to adjust large liability losses at Reliable Insurance. He had received a claim for a dog bite to a child. The insured had kept the dog restrained, but the five year old child (who lived next door) had wandered away from his home and into the insured's yard. When the child was within reach of the dog, the dog bite the child's arm; which required thirty stitches. Sam decided that he would assign a reserve for the file of $30,000.00 because the child was a minor. Sam was focusing on which one of the six steps from the individual case method in evaluating the loss for a reserve? |
Claimant profile
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|
Statements provided on a notice of loss form should be used as which one of the following? |
Reference
|
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The following policy language, "We may investigate and settle any claim or suit that we decide is appropriate.", grants the claim representative the authority to do which one of the following? |
Investigate the claim
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A claim was reassigned to a new representative due to the location of the loss. The loss was for an automobile bodily injury claim where the claimant had sustained severe injuries to the right side of the body. The claimant had completed rehabilitation but continued to struggle to return to work. The new claim representative reviewed the medical records and determined that the 25 year old graduate from the State University had been on track to take on a leadership role for the employer just prior to the accident but due to the injuries the promotion had not taken place. The new claim representative felt that the struggle to fully recover were hampering the claimant's ability to progress at work, amplifying the damages. Therefore, the file reserve was raised. Which one of the six factors from the individual case method were used to amend the file reserve? |
Claimant profile
|
|
|
As a claim representative for ABC Insurance, Max regularly adjusted theft claims. Max had received a loss and spent several weeks taking statements from the insured and documenting the facts that were presented by witnesses. Max then determined that the claim was not valid and denied the claim. Which one of the following identifies an exposure for risk beyond the policy limits for the insurer from the adjustment of this claim? |
Not documenting facts from the insured
|
|
|
Which one of the following best identifies a fair duty to cooperate on behalf of the insured based on the policy? |
Comply with the insurer's reasonable request
|
|
|
For reference and advice on how to safely handle contact situations for any hazardous materials that could be present in an auto body shop, a claim representative can request which one of the following from the auto body shop? |
A Material Safety Data Sheet
|
|
|
A statement is a record of the events surrounding an accident as told by the interviewee. Statements are best taken shortly after the loss occurs so that |
Time does not diminish the person's memory of the event.
|
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While handling a theft claim the claim representative began to suspect that the insured may not have incurred an actual loss. The claim representative had obtained a copy of the receipts for each of the items, but a financial record review did not verify the purchases as belonging to the insured. The police report did not show signs of forced entry, despite the insured reporting the home as locked. Due to the question of whether a theft loss occurred the claim representative should request which one of the following? |
Examination under oath
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When reserving a claim, Donna realizes that she needs to pay several interim bills in addition to the final claim payment. Donna should |
Raise the reserve considering all interim and likely final claim payments.
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ABC Insurance Company is reviewed by state auditors and found to have understated reserves. Which one of the following indicates how this situation can affect the company? |
Understated reserves may cause errors in ratemaking, eventually affecting an insurer’s ability to write business competitively and ultimately affecting its solvency.
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Which one of the following can assist in confirming information on the automobile loss notice?
|
Medical reports
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Policy information may be contained in paper policies and underwriting files, or it may all be contained in |
An online database.
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Which one of the following factors can be used to assess whether an insurer's request for information is reasonable? |
Is the request specific and not too vague?
|
|
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Which one of the following are included on a notice of loss form?
|
Agency
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A file had come across the claim manager's desk after six months. The claim was a liability loss where the insured reported a break in and that he shot the 'robber' in self defense. The other party presented a claim for injuries from the shooting and advised that the only action taken that night was to knock on the door of the wrong home. The insured was noted to have been drinking that night and did not have a permit for a personal fire arm. The insured also had a reputation among the neighbors to have a quick temper. Based on the facts of the loss the claim manager raised the reserve to $100,000. Which one of the following six factors did the claim manager use from the individual case method to increase this reserve? |
Miscellaneous factors
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Luna is the claim supervisor for Happy Valley Insurance Company. Her area’s primary responsibility is adjusting glass claims. When reserving these claims, Luna uses the amount based on previous losses. Which one of the following is the reserve method Luna uses? |
Average value method
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A notice of loss was received and it provided the name of the agency, the policy number, the insured name and contact information, and details of the loss. The claim representative assigned reviewed the loss details and then contacted the insured. The details from the insured did not match the loss report. The claim representative should do which one of the following? |
Request further documentation
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|
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When handling a claim, even one that appears to be simple and routine, a claim representative should review the policy to ascertain |
What is and is not covered.
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When handling a claim, even one that appears to be simple and routine, a claim representative should review the policy to ascertain |
What is and is not covered.
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Judy was adjusting a loss for fire damages on a residential property insured by ABC Insurance. She had contacted the insured, inspected the loss, obtained and reviewed the fire report, conducted a cause and origin investigation for the fire. Judy's investigation was indicating the cause was arson and that the insured was involved. Judy contacted the insured and discussed the facts of the loss and coverage under the policy. During the call Judy advised the insured that the claim would be denied. Which one of the following actions would assist in preventing an exposure for lack of good faith in handling this claim? |
Consult with legal counsel
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Hector is an experienced workers compensation claim representative for Great States Insurance Company. Hector considers the ratio between medical costs and indemnity when setting the reserves on his workers compensation claims. This is known as the |
Formula method.
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Claim representatives can learn techniques or actions that ensure personal safety when faced with which one of the following claim handling hazards? |
Roadside
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Which one of the following is a distinct difference between an examination under oath (EUO) and a deposition? |
An EUO may be demanded by an insurer before litigation has begun
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During a property inspection if clean-up or repair work has already begun, the claims representative should do which one of the following to ensure physical safety? |
Wear protective gloves
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Which one of the following best identifies an action in adjusting a claim that would follow good faith handling for a claim? |
Thorough investigation
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|
Field claim representatives may conduct investigations or inspections in crime-prone areas. If the claim representative feels unsafe, he or she should |
Leave the area immediately.
|
|
|
Industry databases are investigative tools which contain claim information from a variety of sources. The oldest and largest of these industry databases is |
ISO ClaimSearch.
|
|
|
Ethics involves making a choice between
|
What is an acceptable course of action and what is a better one.
|
|
|
People who handle claims may be staff claim representatives, independent adjusters, employees of third-party administrators, or |
Producers who sell policies to insureds.
|
|
|
If a claim is complex or if settlement negotiations are not progressing with the insurer, the insured may hire |
A public adjuster. |
|
|
The value of an insurance contract in the event of a claim |
Includes peace of mind.
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Which one of the following statements describes a situation presenting an ethical dilemma for a claim representative? |
A body shop owner offers to repair an auto damage claim adjuster's personal vehicle for free. |
|
|
People who handle claims fall into a number of categories. Those who handle claims, keep claim records, and perform statistical analysis on behalf of self-insureds are called |
Third-party administrators.
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While investigating a fire loss, claim representative Randy noticed on the itemized inventory that the insured had lost one earring of a diamond set. While on site, Randy found the lost earring and put it in his pocket. Later, he sold the earring for $600, knowing that the insured would be compensated for the lost earring. Randy's action was |
Fraudulent.
|
|
|
Fraudulent.
|
Public adjusters.
|
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Claim representatives must be aware of the factors that can adversely affect their claim-handling competency, which include |
Imperfections in human memory that cause normal loss of knowledge over time.
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|
Ultimately, the insurance product is
|
A promise made by the insurer to the insured.
|
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|
Harriett, a field claim representative, is often offered incentives in the form of gifts, favors, or gratuities. To deter Harriett from accepting inappropriate incentives, her insurer could |
Have guidelines that either prohibit the acceptance of incentives or that set dollar value limits on incentives that can be accepted.
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All of the following are provisions of prohibited practices enumerated under a typical unfair claim settlement practices law: |
Making claim payment without indicating the coverage invoked. Failing to provide necessary claims forms promptly. Failing to promptly acknowledge claims communications. |
|
|
Which one of the following statements regarding competency of insurance professionals is correct? |
A change in job responsibilities requires new knowledge and new skills.
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Which one of the following describes a factor that can affect an insurance professional's competency?
|
Changes in the claims environment including consumer, social, and political forces influence insurance coverage, legal liability, damages, and technology.
|
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One way for claim managers to help maintain an insurer's underwriting profit is to |
Establish appropriate spending policies. |
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Judy has 17 years of claim handling experience and has agreed to attend computer classes due to technological changes. Which one of the following is a factor which affects Judy's claim handling competency? |
Changes in the claim environment |
|
|
Abiding by ethical and professional standards of conduct |
Is essential to maintaining and improving the image of the insurance industry. |
|
|
The best description of a third-party claim is a claim |
Made against the policyholder by someone to whom the policyholder may be liable
|
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|
Incurred losses (including loss adjustment expenses) divided by earned premium is the formula for |
Loss ratio.
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Which one of the following statements describes unethical conduct involving a claims representative? |
A claimant offers $100 to the claim representative to use new parts to repair his truck built in 1990.
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|
A claim representative who believes in high quality claim practices should |
Keep in mind the perspectives of the claimants and insureds.
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Worthley Insurance Company uses claim audits to ensure compliance with best practices. These audits evaluate both quantitative and qualitative factors. Which one of the following factors that Worthley evaluates is a qualitative factor? |
Accurate evaluation of insured’s liability
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|
Joe who owns a used auto parts store is also a claim representative for an insurance company. To obtain inexpensive parts, Joe often indicates a total loss on a claim so that he has access to more auto parts at private auctions. Joe is involved in |
A conflict of interest. |
|
|
Nancy is a sales agent for ABC Insurance. Wendy, a friend, asks Nancy for a quote on her auto insurance. Nancy calculates a premium and realizes that it is $200 higher than what Wendy would have to pay for coverage with ABC's competitor. Deciding whether to sell Wendy a policy or refer her to ABC's competitor is an example of a(n) |
Ethical dilemma.
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|
For the insurance professional, ethical and professional conduct can |
Be the foundation of a successful, satisfying career.
|
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|
Licensure-related ethical dilemmas can arise when a manager or supervisor asks a claim representative to assume claim handling responsibilities |
In a territory in which the claim representative is not licensed
|
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Insurers and claim representatives must keep the promises specified in insurance policies, as well as those created by the law. In insurance transactions, the insured pays a premium for the insurer's promise to |
Handle claims in good faith
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|
An insurance contract is designed to be all of the following in the event of a claim |
A way to restore a claimant to pre-loss condition A means to afford peace of mind to the insured A financial mechanism that can benefit policyholders and other claimants |
|
|
A goal of the claims function is to support the profit goal of the |
Insurer.
|
|
|
For a claim representative, ethical and professional dilemmas arise because |
State laws relating to licensing inside claim representatives can be ambiguous.
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Under certain circumstances, an insurer may authorize the adjustment of claims by producers. One of the benefits of providing producers with draft authority is that |
If an agent can issue a draft directly to the insured, it reduces the time an insured waits for payment.
|
|
|
Which one of the following statements describes a situation presenting an ethical dilemma for a claim representative? |
A body shop owner offers to repair an auto damage claim adjuster's personal vehicle for free.
|
|
|
Which one of the following can provide guidance to claim representatives regarding ethical and professional claim handling conduct? |
Regulatory requirements and insurer's guidelines
|
|
|
Information gathered by claims representatives in handling claims |
May be protected by privacy laws.
|
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|
While investigating a fire loss, claim representative Randy noticed on the itemized inventory that the insured had lost one earring of a diamond set. While on site, Randy found the lost earring and put it in his pocket. Later, he sold the earring for $600, knowing that the insured would be compensated for the lost earring. Randy's action was |
Fraudulent
|
|
|
People who handle claims may be staff claim representatives, independent adjusters, employees of third-party administrators, or |
Producers who sell policies to insureds.
|
|
|
A goal of the claims function is to support the profit goal of the
|
Insurer.
|
|
|
Immediately after a severe windstorm, Ace Roofing's owner sends a case of expensive wine to each of the representatives from the Malvern Insurance local claim office. Included with the wine is Ace Roofing’s company brochure highlighting their services with several customer testimonials. Which one of the following is correct? |
An ethical claim representative would return the wine with thanks and an explanation that it is against company policy to accept gifts.
|
|
|
Most insurers give some producers the authority to pay claims up to a certain amount. In this role, producers function much like an |
Independent adjuster.
|
|
|
Harriett, a field claim representative, is often offered incentives in the form of gifts, favors, or gratuities. To deter Harriett from accepting inappropriate incentives, her insurer could |
Have guidelines that either prohibit the acceptance of incentives or that set dollar value limits on incentives that can be accepted.
|
|
|
Which one of the following is true regarding laws regulating claims handling?
|
Some claim laws are created by the state and some are federal.
|
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|
Joe who owns a used auto parts store is also a claim representative for an insurance company. To obtain inexpensive parts, Joe often indicates a total loss on a claim so that he has access to more auto parts at private auctions. Joe is involved in |
A conflict of interest.
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|
Which one of the following creates legal duties for insurers?
|
Consumer regulations
|
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|
The best description of a third-party claim is a claim
|
Made against the policyholder by someone to whom the policyholder may be liable.
|
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|
Ethical and professional conduct of claim representatives can benefit consumers by |
Encouraging fair treatment and prompt payment.
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|
Most states require the licensing of
|
Public adjusters.
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|
In today's business environment, being ethical is often equated with merely obeying the law; however, ethical behavior |
Goes beyond merely obeying the law.
|
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|
Which one of the following statements is true regarding bad-faith claims? |
The best way for claim representatives to avoid bad-faith accusations is to work ethically.
|
|
|
Claim customer service includes |
Prompt and courteous contact, and prompt payment.
|
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To avoid conflict of interest when an insurer provides multiple coverages for one insured triggered by the same occurrence or when the insurer covers multiple insureds involved in the same claim, |
Insurers may require the claim to be bifurcated with a different claim representative handling each part independently
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In which one of the following ways can a claim representative's unethical or unprofessional conduct affect the insurer adversely?
|
An incident that violates the public's expectations of ethical conduct may receive wide publicity and can damage the insurer's credibility.
|
|
|
Ultimately, the insurance product is
|
A promise made by the insurer to the insured.
|
|
|
Most insurers give some producers the authority to issue claim payments, up to a certain amount, directly to insureds. In this role, producers function much like a(n) |
Inside claim representative.
|
|
|
Which one of the following describes a factor that can affect an insurance professional's competency? |
Changes in the claims environment including consumer, social, and political forces influence insurance coverage, legal liability, damages, and technology.
|
|
|
A claim representative who believes in high quality claim practices should
|
Keep in mind the perspectives of the claimants and insureds
|
|
|
An insurance contract is designed to be all of the following in the event of a claim, EXCEPT
|
A means to provide a profit to the insured
|
|
|
The value of an insurance contract in the event of a claim
|
Includes peace of mind.
|
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Lou is a claim manager at a small property-casualty insurance company. Lou takes pride in the fact that because of his leadership, his company has gained a public reputation for resisting legitimate claims. Ultimately, this reputation |
Undermines the effectiveness of his company's advertising.
|
|
|
If a claim is complex or if settlement negotiations are not progressing with the insurer, the insured may hire |
A public adjuster.
|
