AIC 300

Direct loss

A reduction in the value of property that results directly and often immediately from damage to that property

Combination of nodes

A representation of data attributes in a classification tree

Motion to dismiss

A request that a court terminate an action because of settlement, voluntary withdrawal, or procedural defect

Wearable sensor tag

A sensor attached to or embedded in clothing and accessories

Federal Rules of Civil Procedure

A set of rules established to ensure that civil actions and procedures move through the United States district courts as quickly as possible

Service of process

The delivery of a summons and complaint to a defendant by an authorized person

Loss adjustment expense (LAE)

The expense that an insurer incurs to investigate, defend, and settle claims according to the terms specified in the insurance policy

Roundtable method

A method of setting reserves by using the consensus of two or more claims personnel who have independently evaluated the claims file

Expert System method

A method of setting reserves with a software application that estimates losses and loss adjustment expenses

Predictive model

A model used to predict an unknown outcome by means of a defined target variable

General damages

A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve specific, measurable expenses

Internet of Things (IoT)

A network of objects that transmit data to each other and to central hubs through the internet

Punitive damages (exemplary damages)

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

Loss ratio

A ratio that measures losses and loss adjustment expenses against earned premiums and that reflects the percentage of premiums being consumed by losses

Machine learning

Artificial intelligence in which computers continually teach themselves to make better decisions based on previous results and new data

Which one of the following methods of establishing case reserves is used most often when there are small variations in loss size for a particular type of claim?

Average value method

Claims may be paid in any of three ways: by check, by bank transfer or

By electronic funds transfer

Data mining

The analysis of large amounts of data to find new relationships and patterns that will assist in developing business solutions

Reserve

The amount the insurer estimates and sets aside to pay on an existing claim

Recursively

Successively applying a model

Average value method

A case reserving method that establishes a predetermined dollar amount of reserve for each claim as it is reported

Allegation

A claim made in the complaint by the plaintiff, specifying what the plaintiff expects to prove to obtain a judgement against the defendant

Complex claim

A claim that contains one or more characteristics that cause it to cost more than the average claim

In which one of the following scenarios is the right of subrogation most likely to be employed by the insurer?

A claims rep discovers that their insured's car accident was caused by a road contractor who left equipment lying in the travel lanes of a highway

Coinsurance clause

A clause that required the insured to carry insurance equal to at least a specified percentage of the insured property's value

Contributory Negligence

A common-law principle that prevents a person who has been harmed from recovering damages if that person's own negligence contributed in any way to the harm

Comparative negligence

A common-law principle that requires both parties to a loss to share the financial burden of the bodily injury or property damage according to their respective degrees of fault

Blockchain

A distributed digital ledger that facilitates secure transactions without the need for a third party

Special Investigation unit (SIU)

A division set up to investigate suspicious claims, premium fraud, or application fraud

Summons

A document that directs a sheriff or another court-designated officer to notify the defendant named in the lawsuit that a lawsuit has been started and that the defendant has a specified amount of time to answer the complaint

Material fact

A fact that is significant to a decision or matter at hand

Misrepresentation

A false statement of a material fact on which a party relies

Special damages

A form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured person's loss, such as medical expenses or lost wages

Statute of limitations

A law that stipulates the length of time after an even during which legal proceedings (such as a lawsuit or criminal charges may be initiated

Indirect loss

A loss that arises as a result of damage to property, other than the direct loss to the property

Information gain

A measure of the predictive power of one or more attributes

In claims investigation, all bodily injury claims require

A medical investigation

Although most policies are occurrence forms, covering claims that occur during the policy period, some are claims-made forms. Which one of the following types of loss is most likely to involve a claims-made form?

A medical malpractice claim

Formula method

A method of setting claims reserves be using a mathematical formula

Individual case method

A method of setting reserves based on the claim's circumstances and the claims representative's experience in handling similar claims

Compensatory damages

A payment awarded by a court to reimburse a victim for actual harm

Tortfeasor

A person or an organization that has committed a tort

Claims representative

A person responsible for investigating, evaluating, and settling claims

Actuary

A person who uses mathematical methods to analyze insurance data for various purposes, such as to develop insurance rates or set claim reserves

Discovery

A pretrial exchange of all relevant information between the plaintiff and defendant

Motion for summary judgment

A pretrial request asking the court to enter a judgement when no material facts are in dispute and the moving party is entitled to judgment as a matter of law

Motion in limine

A pretrial request that certain evidence be excluded from the trial

The claims litigation process begins with the receipt of

A summons and complaint

Classification tree

A supervised learning technique that uses a structure similar to a tree to segment data according to known attributes to determine the value of a categorical target variable

Leaf node

A terminal node of a classification tree that is used to classify an instance based on its attributes

Tort

A wrongful act or an omission, other than a crime or breach of contract, that invades a legally protected right

Hard fraud

Actions that are undertaken deliberately to defraud

Cross Industry Standard Process for Data Mining (CRISP DM)

An accepted standard for the steps in any data mining process used to provide business solutions

Staged Accident

An accident deliberately caused by a person who intends to feign injury and collect on the ensuing claim

Pro rata contribution

An approach to other insurance by which the insurers contribute to the loss payment in proportion to which they contribute to the total amount of coverage purchased (their limits of liability)

In which one of the following scenarios is a public adjuster most likely to become involved?

An insured's negotiations with the insurer on a complex claim are not going well

Concealment

An intentional failure to disclose a material fact

Data science

An interdisciplinary field involving the design and use of techniques to process very large amounts of data from a variety of sources and to provide knowledge based on the data

Insurable interest

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

Algorithm

An operational sequence used to solve mathematical problems and to create computer programs

Third-party administrator (TPA)

An organization that provides administrative services associated with risk financing and insurance

Public Adjuster

An outside organization or person hired by an insured to represent the insured in a claim in exchange for a fee

Insurance fraud

Any deliberate deception committed against an insurer or an insurance producer for the purpose of unwarranted financial gain

Producer

Any of several kinds of insurance personnel who place insurance and surety business with insurers and who represent either insurers or insureds, or both

In her role with an insurer, Katarina has opportunity to collaborate with not only employees from her company, but also external experts with particular expertise. For example, as part of her investigation, she hired an engineer to conduct a review of a machine that was involved in a personal injury. Katarina is a(n)

Claim representative

Mia tracks loss adjustment expense (LAE) as part of her management of the claims department for an insurer. Mia considers LAE to be the

Cost to investigate, defend, and settle claims

Training data

Data that is used to train a predictive model and that therefore must have known values for the target variable of the model

In the process of assigning a claim, an internal claims handler will often transfer information to the insurer's standard form, called the

First notice of loss (FNOL) form

Soft fraud, or opportunity fraud

Fraud that occurs when a legitimate claim is exaggerated

Precision

In model performance evaluation, a model's correct positive predictions divided by its total positive predictions

Accuracy

In model performance evaluation, a model's correct predictions divided by its total predictions

Lift

In model performance evaluation, the percentage of positive predictions made by the model divided by the percentage of positive predictions that would be made in the absence of the model

Holdout data

In the model training process, existing data with a known target variable that is not used as part of the training data

Domain knowledge

Information related to the context of the information a data scientist is working with

The Office of Foreign Assets Control requires claims payors to check payees against a database of

Known terrorists and drug traffickers

One of Juan's responsibilities as a claims representative is to prepare internal reports, such as preliminary, interim, large loss, and captioned. Which one of the reports Juan prepares is required for claims with reserves that exceed a specified threshold?

Large loss

Charlotte is handling a new claim and she has set the initial reserves at $1,000,000. She has been asked to complete an internal report summarizing all the file status information for distribution to management and updated as more information is received. The report Charlotte is completing is most likely a

Large loss report

Aaron works for a multi-line insurer. He works with insurance producers and applicants to evaluate new business submissions and conduct renewal underwriting. Aaron is a

Line underwriter

The first key to communicating empathetically as a claims professional is

Listening

Mitsuki was severely injured when the safety latch on an amusement park ride failed and she was thrown from the ride. In her lawsuit with the amusement park, Mitsuki was awarded payment for pain and suffering, emotional distress, disfigurement, and loss of earnings. Which one of Mitsuki's awards is considered special damages?

Loss of earnings

Chloe is an insurer defense attorney who is preparing a trial strategy. She has researched a court decision that was made in a similar case and is basing the defense on that precedent. Chloe is relying on the principle of stare decisis, which is that

Lower courts must follow precedents set by higher courts

Premium Audit

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

Linnea is an attorney who is preparing to defend an insurer in a workers compensation case. Discovery produced several documents that are being presented as witnesses statements, but the witnesses admit in the statements to not actually seeing the accident. Linnea would like to omit these statements from the proceedings, so she is filing a

Motion in limine

When Mehmet interviews witnesses as part of his claims investigation, he asks different types of questions based on need, such as open-ended, direct, indirect, and leading. Which type of question should Mehmet ask when he wants to set the interviewee at ease and he is looking for explanation or elaboration of details in the interviewee's own words?

Open-ended

Samuel was seriously injured in a car accident caused by a drunk driver. His settlement included payments for repairs to his vehicle, medical bills, pain and suffering, and lost wages. Which one of the payments in Samuel's settlement is considered general damages?

Pain and suffering

Before making initial contact with an insured or claimant, a claims representative should

Prepare a list of questions for the insured

Hugo is conducting an audit of a branch office claims operation. He is evaluating timeliness of reports, number of files opened, proper releases taken, and accuracy of data entry. Which one of Hugo's metrics is a qualitative audit factor?

Proper releases taken

Carolina is a claim representative handling a liability claim. She is speaking to the claimant over the phone and has informed him that his statements must be true under penalty of perjury. When completed, she sent a transcription of the conversation to the claimant for him to sign before a notary. Carolina has taken a(n)

Recorded statement

Big data

Sets of data that are too large to be gathered and analyzed by traditional methods

As methods of communication evolve, it's important for claims professionals to remember that any written claims communication may be

Subpoenaed

Which one of the following statements regarding third-party administrators (TPAs) is most accurate?

TPAs handle claims, keep claims records, and perform statistical analyses

Andrew is a claims representative investigating whether coverage applies to a new claim. To help ensure that he considers every facet of the policy before determining coverage, he might use

The DICE method

Complaint

The allegations made by a plaintiff in a lawsuit

Root node

The first node in a classification tree

First notice of loss (FNOL)

The initial report notifying the insurer of a claim

To determine whether an insurer typically underreserves or overreserves claims, actuaries compare the insurer's paid losses to

The insurer's case reserves

Stare decisis

The principle that lower courts must follow precedents set by higher courts

Ethics

The study of what constitutes good and bad behavior, dealing with moral duty and obligation

Telematics

The use of technological devices to transmit data via wireless communication and GPS tracking

Indemnify

To restore a party who has sustained a loss to the same financial position that party held before the loss occurred