first party insurance - ANSWER-insurer makes payment for covered losses directly to the policyholder
(first party)
third-party insurance - ANSWER-insurer makes payments on behalf of the policyholder to a claimant
(third party)
third party administrators (TPAs) - ANSWER-- an organization that pr...
AIC 300 Exam Questions| Already
Answered| GRADED A+
first party insurance - ANSWER-insurer makes payment for covered losses directly to the policyholder
(first party)
third-party insurance - ANSWER-insurer makes payments on behalf of the policyholder to a claimant
(third party)
third party administrators (TPAs) - ANSWER-- an organization that provides administrative services
associated with risk financing and insurance (claims, records, analysis, etc)
- self insured businesses can handle their own claims or hire a TPA
- P&C insurers have subsidiaries that serve as a TPA
staff claims representatives - ANSWER-a person responsible for investigating, evaluating, and settling
claims (ex: adjusters)
independent adjusters - ANSWER-- specialized claims + field work
- if insurer cant afford claims offices in every state
- some are self employed, some work for adjusting firms
producers - ANSWER-- any kinds of insurance personnel who place insurance and surety business with
insurers and who represent either insurers, insureds, or both
- ex: agents, brokers, sales reps
public adjusters - ANSWER-- outside organization or person hired by an insured to represent the insured
in a claim in exchange for a fee
- if insured is not happy with settlement or it is a complex claim
types of staff claims representatives - ANSWER-inside: exclusively from insurer's office
, field: outside, both in and out of office, handle claims with tasks like investigating scene of loss, meeting
with insureds, etc
line underwriters - ANSWER-work directly with insurance producers and applicants to evaluate new
submissions & renewals
staff underwriters - ANSWER-work with line underwriters to coordinate decisions about products,
pricing, and guidelines
premium audit - ANSWER-methodical examinations of a policyholder's operations, records, and books of
account to determine the actual exposure units and premium for insurance coverages already provided
why should claim reps be careful with what they say on claims communication? - ANSWER-claims
investigation activities can later be used as evidence in legal proceedings, any written claims
communication can be subpoenaed
loss ratio - ANSWER-losses & los adjustment expenses / earned premium
measures the performance of claims & uw departments
loss adjustment expenses (LAE) - ANSWER-the expense that an insurer incurs to investigate, defend, and
settle claims according to the terms specified in the policy
short term solution to reduce LAE - ANSWER-reduce expenses by offering settlement payments instead
of paying for investigation and legal defense
3 Quality Measures of a Claims Dept - ANSWER-- best practices
- claims audits
- customer satisfaction data
Quantitative vs Qualitative Audit Factors - ANSWER-quantitative: all come from # data (ex: timeliness of
reports, number of files opened monthly, avg claims settlement value)
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