Ethical & Legal Compliance Flashcards
7 cards from real CA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethical & Legal Compliance flashcards as text
A California adjuster is handling a workers' compensation claim and realizes the employer is pressuring the injured worker to return early. The adjuster should:
Answer: Remain neutral and ensure the claim is handled according to state law
Adjusters must remain impartial and follow applicable state workers' compensation statutes regardless of employer pressure.
Which act specifically governs how insurers must handle claims in most US states by prohibiting deceptive practices?
Answer: Unfair Claims Settlement Practices Act
The UCSPA, adopted in various forms by most states, establishes minimum standards for fair and timely claims handling.
When an adjuster settles a claim knowing the claimant lacks legal representation, the adjuster must:
Answer: Inform the claimant they should obtain counsel before settling
Good faith requires informing unrepresented claimants that they may seek legal counsel, though adjusters cannot provide legal advice.
An adjuster who intentionally lowballs a settlement offer knowing it is below the actual claim value may be liable for:
Answer: Bad faith claims handling
Intentionally undervaluing a claim is a classic example of bad faith, which can expose the insurer to extra-contractual damages.
Which type of adjuster is licensed by the state and works independently for multiple insurers on a fee basis?
Answer: Independent adjuster
Independent adjusters are contracted by insurers on a per-claim basis and must hold a state adjuster license.
The ethical concept requiring adjusters to fully investigate all aspects of a claim before making a coverage decision is known as:
Answer: Thorough and fair investigation
A thorough and fair investigation ensures coverage decisions are based on complete facts rather than assumptions or shortcuts.
If an adjuster suspects a claimant is exaggerating injuries, the most appropriate first step is to:
Answer: Conduct a thorough investigation including medical review and surveillance if warranted
Suspicion of fraud must be investigated objectively before any denial, using proper investigative tools and documentation.