Portfolio Development 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 Portfolio Development flashcards as text
Which performance metric BEST measures the efficiency of an adjuster's commercial lines portfolio?
Answer: Loss adjustment expense (LAE) as a percentage of incurred losses
LAE as a percentage of incurred losses measures how efficiently claims are being handled relative to the total loss dollars managed.
An adjuster developing a specialty portfolio in inland marine losses should prioritize knowledge of which coverage provision?
Answer: Mysterious disappearance exclusions
Inland marine policies commonly contain mysterious disappearance exclusions, making familiarity with this provision essential for accurate coverage analysis.
For portfolio quality control, a claims supervisor reviews files for 'leakage.' What does leakage MOST commonly refer to?
Answer: Avoidable overpayment on claims
Leakage refers to avoidable overpayments on claims resulting from poor investigation, failure to identify fraud, or inadequate negotiation.
A certified adjuster is asked to develop a best practices portfolio for handling construction defect claims. Which documentation element is MOST distinctive for this claim type?
Answer: Expert engineering reports identifying defective workmanship
Construction defect claims hinge on causation, making expert engineering reports the cornerstone documentation for establishing defective workmanship.
When managing a portfolio that includes claims with coverage disputes, an adjuster should issue a reservation of rights letter primarily to:
Answer: Preserve the insurer's right to deny coverage while still investigating
A reservation of rights letter notifies the insured that the insurer is investigating while reserving the right to disclaim coverage if a policy exclusion applies.
In a homeowners claims portfolio review, which finding MOST strongly suggests a pattern of insurance fraud?
Answer: Claims filed within 30 days of policy inception
Claims filed shortly after policy inception are a recognized red flag for pre-existing conditions or staged losses and warrant enhanced investigation.
Which action BEST demonstrates proactive portfolio management for an adjuster handling long-tail liability claims?
Answer: Conducting periodic reserve reviews as new information develops
Long-tail claims evolve over time, so periodic reserve reviews that incorporate new medical, legal, or factual information are essential to accurate portfolio valuation.