CA Portfolio Development 3

Question 1

Which performance metric BEST measures the efficiency of an adjuster's commercial lines portfolio?

Accepted Answer

Loss adjustment expense (LAE) as a percentage of incurred losses

Answer

LAE as a percentage of incurred losses measures how efficiently claims are being handled relative to the total loss dollars managed.

Question 2

An adjuster developing a specialty portfolio in inland marine losses should prioritize knowledge of which coverage provision?

Accepted Answer

Mysterious disappearance exclusions

Answer

Inland marine policies commonly contain mysterious disappearance exclusions, making familiarity with this provision essential for accurate coverage analysis.

Question 3

For portfolio quality control, a claims supervisor reviews files for 'leakage.' What does leakage MOST commonly refer to?

Accepted Answer

Avoidable overpayment on claims

Answer

Leakage refers to avoidable overpayments on claims resulting from poor investigation, failure to identify fraud, or inadequate negotiation.

Question 4

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?

Accepted Answer

Expert engineering reports identifying defective workmanship

Answer

Construction defect claims hinge on causation, making expert engineering reports the cornerstone documentation for establishing defective workmanship.

Question 5

When managing a portfolio that includes claims with coverage disputes, an adjuster should issue a reservation of rights letter primarily to:

Accepted Answer

Preserve the insurer's right to deny coverage while still investigating

Answer

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.

(CA) Certified Adjuster Designation Practice Test

(CA) Certified Adjuster Designation Practice Test

CA Portfolio Development 3