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

Structured settlements are typically funded by an annuity purchased from a highly-rated life insurance company, guaranteeing future periodic payments to the claimant.

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

Structured settlements provide tax-free periodic income, protecting claimants—especially those with diminished capacity—from rapidly depleting a large lump sum.

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

Silence is a deliberate negotiation tactic; the party who speaks first typically makes the next concession, so remaining silent preserves the adjuster's negotiating position.

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 Mary Carter agreement is a secret arrangement where a settling defendant reduces its liability exposure by cooperating with the plaintiff against remaining defendants, which many states require to be disclosed.

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

Verdict value is heavily influenced by local jury trends; jurisdictions known for high awards (plaintiff-friendly venues) significantly elevate the potential exposure of a claim.

AIC - Associate in Claims Practice Test

AIC - Associate in Claims Practice Test

AIC Negotiation & Settlement Techniques 2