Risk Management & Fraud Prevention in Claims Handling Flashcards
7 cards from real CALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Management & Fraud Prevention in Claims Handling flashcards as text
A claimant presents a police report filed three days after the alleged accident. Why is the delay significant to a fraud investigation?
Answer: It may suggest the claimant had time to stage evidence or recruit witnesses
A delayed police report may indicate the claimant used the time to set up a fraudulent narrative, recruit false witnesses, or stage supporting evidence.
In risk management, what does 'loss trending' help an insurer accomplish?
Answer: Project future claim costs based on historical patterns
Loss trending uses historical claims data to project future loss costs, supporting accurate reserving and pricing decisions.
Which type of fraud involves an attorney recruiting accident victims to treat with specific medical providers who over-bill for services?
Answer: Attorney runner/capper scheme
Runner/capper schemes involve attorneys or their agents soliciting accident victims and directing them to cooperating medical providers who inflate treatment bills.
An adjuster is reviewing an EUO transcript. The insured repeatedly contradicts details they gave in their recorded statement. This is BEST used as:
Answer: Evidence of inconsistency supporting a fraud referral
Material inconsistencies between an EUO and a prior recorded statement are significant evidence supporting referral to the Special Investigations Unit.
What is the key distinction between 'hard fraud' and 'soft fraud' in automotive claims?
Answer: Hard fraud is premeditated; soft fraud involves exaggerating a legitimate claim
Hard fraud involves deliberately creating a false claim (e.g., staging an accident), while soft fraud involves exaggerating or embellishing an otherwise legitimate loss.
A repair shop submits a supplement for 'corrosion removal' on a vehicle with a pre-loss rust condition. An adjuster should:
Answer: Investigate whether the corrosion is pre-existing and not related to the covered loss
Pre-existing corrosion is not caused by the covered loss, so the adjuster must determine whether the supplement reflects loss-related damage or a pre-existing condition.
Which analytical technique uses data mining to score individual claims by likelihood of fraud based on historical patterns?
Answer: Predictive modeling / fraud scoring
Predictive modeling assigns fraud scores to incoming claims by comparing claim characteristics to known fraud patterns in historical data.