Legal & Ethical Considerations in Insurance Adjusting Flashcards
7 cards from real CAIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Legal & Ethical Considerations in Insurance Adjusting flashcards as text
An adjuster is asked by a supervisor to alter claim notes to reduce the reserve amount before a quarterly audit. The adjuster should:
Answer: Refuse and report the request to the compliance or ethics hotline
Altering claim records fraudulently is illegal and unethical; the adjuster must refuse and report the misconduct through proper channels.
In a subrogation action, the insurer steps into the shoes of the insured to pursue which party?
Answer: The negligent third party responsible for the loss
Subrogation allows the insurer, after paying the insured's claim, to recover from the at-fault third party who caused the loss.
An adjuster learns that a claimant's attorney is also the brother-in-law of the adjuster's supervisor. This relationship should be:
Answer: Disclosed as a potential conflict of interest and another adjuster assigned
Any relationship that could create the appearance of bias must be disclosed and the claim reassigned to eliminate conflicts of interest.
Under the doctrine of 'stacking' in UM/UIM coverage, a policyholder with multiple vehicles on one policy may:
Answer: Combine the UM limits of each vehicle to increase the available coverage
Stacking allows the insured to combine UM/UIM limits across multiple vehicles on the policy, though many states permit anti-stacking policy language.
A claimant submits repair estimates inflated by 30% with the collusion of the body shop. Both the claimant and shop owner could face charges of:
Answer: Insurance fraud, a criminal offense
Intentionally submitting false or inflated repair estimates constitutes insurance fraud, which is prosecuted criminally in every US state.
When adjusting a claim in a no-fault (PIP) state, first-party medical and wage-loss benefits are paid regardless of:
Answer: Who was at fault in the accident
No-fault PIP benefits are paid to the insured by their own insurer without regard to who caused the accident.
An adjuster must maintain claim file confidentiality primarily to protect:
Answer: The insured's and claimant's private information under state privacy laws
State privacy laws and insurance regulations require adjusters to safeguard personal information in claim files, including financial, medical, and identifying details.