Documentation & Reporting Flashcards

A reservation of rights letter is sent primarily to:

Answer: Notify the insured that the insurer is investigating while preserving its right to deny coverage later

A reservation of rights letter preserves coverage defenses while the insurer continues to investigate or defend.

Which of the following is generally protected from discovery as attorney-client privileged material in a claim file?

Answer: Confidential communications between the insurer and its coverage counsel seeking legal advice

Communications seeking legal advice from counsel are typically privileged, unlike ordinary business records.

Under the Medicare Secondary Payer Act (MMSEA Section 111), liability insurers must report which of the following to CMS?

Answer: Settlements, judgments, or awards paid to Medicare beneficiaries

Section 111 requires responsible reporting entities to report payments to Medicare beneficiaries above applicable thresholds.

When a claim involves potential exposure above the primary policy limits, the adjuster should document and:

Answer: Promptly notify the excess or umbrella carrier and the insured of the potential excess exposure

Timely notice to excess carriers and the insured about excess exposure is required by many policies and good-faith duties.

A litigation hold notice in claims handling requires the insurer to:

Answer: Preserve all relevant documents and electronic data related to the claim

A litigation hold suspends routine destruction so relevant evidence is preserved and spoliation is avoided.

Which database is commonly used by U.S. insurers to report claims and detect prior or duplicate claims across carriers?

Answer: ISO ClaimSearch

ISO ClaimSearch is the industry's all-claims database used to identify prior claims and potential fraud patterns.

An adjuster suspects fraud after noting several red flags. What is the most appropriate documentation step?

Answer: Record the objective red flags in the file and refer the claim to the SIU per company procedure

Suspected fraud should be documented factually and referred to the Special Investigations Unit, as many states mandate.