Indemnify - ANSWER-To restore a party who has sustained a loss to the same financial position that
party held before the loss occurred
Third Party Administrator (TPA) - ANSWER-An organization that provides administrative services
associated with risk financing and insurance.
Claims representati...
AIC 300 Exam Questions| Already
Answered| GRADED A+
Indemnify - ANSWER-To restore a party who has sustained a loss to the same financial position that
party held before the loss occurred
Third Party Administrator (TPA) - ANSWER-An organization that provides administrative services
associated with risk financing and insurance.
Claims representative - ANSWER-A person responsible for investigating, evaluating, and settling claims.
Producer - ANSWER-Any of several kinds of insurance personnel who place insurance and surety
business with insurers and who represent either insurers, insureds, or both
Public Adjuster - ANSWER-An outside organization or person hired by an insured to represent the
insured in a claim in exchange for a fee.
Premium Audit - ANSWER-Methodical examination of a policyholder's operations, records, and books of
account to determine the actual exposure units and premium for insurance coverages already provided
Loss ratio - ANSWER-A ratio that measures losses and loss adjustment expenses against earned
premiums and that reflects the percentage of premiums being consumed by losses
Loss adjustment expense (LAE) - ANSWER-The expense that an insurer incurs to investigate, defend, and
settle claims according to the terms specified in the insurance policy.
First Notice of Loss (FNOL) - ANSWER-The initial report notifying the insurer of a claim.
Reserve - ANSWER-The amount the insurer estimates and sets aside to pay on an existing claim.
, Individual case method - ANSWER-A method of setting reserves based on the claim's circumstances and
the claim representative's experience in handling similar claims.
Roundtable method - ANSWER-A method of setting reserves by using the consensus of two or more
claims personnel who have independently evaluated the claims file.
Average value method - ANSWER-A case reserving method that establishes a predetermined dollar
amount of reserve for each claim as it is reported.
Formula method - ANSWER-A method of setting claim reserves by using a mathematical formula.
Expert system method - ANSWER-A method of setting reserves with a software application that
estimates losses and loss adjustment expenses.
Direct loss - ANSWER-A reduction in the value of property that results directly and often immediately
from damage to that property.
Indirect loss - ANSWER-A loss that arises as a result of damage to property, other than the direct loss to
the property.
Pro rata contribution - ANSWER-An approach to other insurance by which the insurers contribute to the
loss payment in the proportion to which they contribute to the total amount of coverage purchased
(their limits of liability).
Insurable interest - ANSWER-An interest in the subject of an insurance policy that is not unduly remote
and that would cause the interested party to suffer financial loss if an insured event occurred.
Punitive damages (exemplary damages) - ANSWER-A payment awarded by a court to punish a defendant
for a reckless, malicious, or deceitful act to deter similar conduct; the award need not bear any relation
to a party's actual damages.
Compensatory damages - ANSWER-A payment awarded by a court to reimburse a victim for actual
harm.
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