AIC Negotiation & Settlement Techniques 2

Question 1

In structured settlements, periodic payments are most commonly funded through:

Accepted Answer

An annuity purchased from a life insurance company

Answer

A lump-sum escrow account managed by the court

Answer

U.S. Treasury bonds held in trust

Answer

The insurer's general operating account

Question 2

Which of the following is a primary advantage of a structured settlement over a lump-sum payment for a seriously injured claimant?

Accepted Answer

It provides guaranteed long-term income, protecting the claimant from mismanaging a large sum

Answer

It allows the insurer to avoid paying taxes on the claim

Answer

It eliminates the need for a release of liability

Answer

It reduces the total amount the insurer must pay

Question 3

During negotiations, an adjuster notices the claimant's attorney is using silence after each offer. The most effective adjuster response is to:

Accepted Answer

Remain silent as well, avoiding concessions driven by discomfort

Answer

Immediately improve the offer to fill the silence

Answer

Request a continuance to consult with management

Answer

Withdraw the offer and start over

Question 4

A 'Mary Carter agreement' in a multi-defendant personal injury settlement refers to:

Accepted Answer

A settlement where one defendant secretly agrees to limit its liability in exchange for helping the plaintiff against co-defendants

Answer

A government-mandated mediation in catastrophic injury cases

Answer

A structured payment plan approved by a federal court

Answer

An agreement between insurers to share defense costs proportionally

Question 5

When evaluating a bodily injury settlement demand, which factor most directly affects the 'verdict value' of a claim?

Accepted Answer

The jurisdiction's history of jury awards for similar injuries

Answer

The adjuster's caseload at the time of loss

Answer

The policy deductible amount

Answer

The insurer's internal settlement authority limit

Question 6

A claimant refuses a reasonable settlement offer and demands to go to trial. The adjuster should first:

Accepted Answer

Document the rejected offer in the claim file and evaluate trial exposure versus settlement cost

Answer

Immediately increase the offer to avoid litigation costs

Answer

Close the claim file as contested

Answer

Refer the matter directly to the insured's personal attorney

Question 7

Under the 'good faith' claims handling obligation, an insurer that fails to promptly settle a claim within policy limits when liability is reasonably clear may face:

Accepted Answer

Extra-contractual damages including bad faith liability exceeding policy limits

Answer

A small processing fee from the state insurance department

Answer

A mandatory mediation order from the court

Answer

Suspension of the adjuster's license for 30 days