AIC Regulatory Compliance & Risk Management 2

Question 1

Under the NAIC Unfair Claims Settlement Practices Model Act, a violation is generally actionable by the regulator when the insurer commits it:

Accepted Answer

With such frequency as to indicate a general business practice

Answer

The model act targets violations committed flagrantly and in conscious disregard or with such frequency as to indicate a general business practice.

Question 2

Which federal agency administers sanctions lists that claims departments must screen payees against before issuing payment?

Accepted Answer

Office of Foreign Assets Control

Answer

OFAC, part of the U.S. Treasury, maintains the Specially Designated Nationals list, and payments to listed parties are prohibited.

Question 3

A liability insurer settles a bodily injury claim with a Medicare beneficiary. What federal requirement most directly applies?

Accepted Answer

Section 111 Mandatory Insurer Reporting under the Medicare Secondary Payer Act

Answer

Section 111 of the MMSEA requires liability, no-fault, and workers' compensation insurers to report settlements with Medicare beneficiaries to CMS.

Question 4

An insurer agrees to cover a manufacturer's product liability exposure. From the manufacturer's perspective, this is which risk management technique?

Accepted Answer

Transfer

Answer

Buying insurance shifts the financial consequences of a loss to another party, which is risk transfer.

Question 5

Most state fraud immunity statutes protect an insurer that reports suspected fraud to authorities from civil liability, provided the report is made:

Accepted Answer

Without malice, fraud, or bad faith

Answer

Immunity statutes generally shield good-faith reports, losing protection only where the insurer acted with actual malice or bad faith.

AIC - Associate in Claims Practice Test