CALA Adjuster Professional Ethics 4 — Questions and Answers
Question 1: Under the NAIC Model Unfair Claims Settlement Practices Act, failing to acknowledge claim communications within a reasonable time is considered:
- An acceptable delay if the insurer is managing high claim volume
- An unfair claims settlement practice subject to regulatory penalties (Correct answer)
- A minor procedural lapse with no legal consequences
- Only problematic if the delay exceeds 90 days
Correct answer: An unfair claims settlement practice subject to regulatory penalties
The NAIC model act requires prompt acknowledgment of claims communications, and failure to do so constitutes an unfair practice.
Question 2: An adjuster finds evidence during a vehicle inspection that suggests the insured intentionally damaged their car. The adjuster should:
- Immediately deny the claim and inform the insured of termination of coverage
- Document findings, complete a thorough investigation, and refer to the Special Investigations Unit (Correct answer)
- Ignore the evidence to avoid an adversarial relationship with the insured
- Ask the insured directly if they committed fraud before taking any action
Correct answer: Document findings, complete a thorough investigation, and refer to the Special Investigations Unit
Suspected intentional damage must be carefully documented and escalated to the SIU following established protocols before any claim decision.
Question 3: Which behavior demonstrates an adjuster's commitment to professional competence as an ethical obligation?
- Relying solely on initial training received during licensure
- Pursuing continuing education and staying current with industry standards and regulations (Correct answer)
- Specializing narrowly to avoid handling unfamiliar claim types
- Delegating all complex claims to senior adjusters indefinitely
Correct answer: Pursuing continuing education and staying current with industry standards and regulations
Professional competence requires ongoing continuing education to maintain up-to-date knowledge of evolving standards, technology, and regulations.
Question 4: A claimant who is a non-English speaker is at a disadvantage during the claims process. The adjuster's ethical duty is to:
- Proceed in English only, as official claims documents are in English
- Arrange for interpreter services or translated documents to ensure the claimant understands the process (Correct answer)
- Ask the claimant to bring their own interpreter to all appointments
- Expedite the settlement to minimize the language barrier's impact
Correct answer: Arrange for interpreter services or translated documents to ensure the claimant understands the process
Fair and ethical claims handling requires ensuring all claimants can meaningfully participate in the process regardless of language barriers.
Question 5: When an adjuster's personal beliefs about a claimant's lifestyle or background influence their claim evaluation, this is known as:
- Professional discretion
- Discriminatory bias, which is both unethical and potentially illegal (Correct answer)
- Reasonable underwriting judgment
- Circumstantial risk assessment
Correct answer: Discriminatory bias, which is both unethical and potentially illegal
Allowing personal biases based on protected characteristics to influence claim outcomes violates ethical standards and anti-discrimination laws.
Question 6: An automotive adjuster settles a claim and later realizes they overlooked additional covered damages. Ethically, the adjuster should:
- Close the file since a release was signed and the matter is concluded
- Notify a supervisor, reopen the claim if possible, and correct the underpayment (Correct answer)
- Wait to see if the claimant contacts them about the overlooked damage
- Document the error internally but take no further action to avoid liability
Correct answer: Notify a supervisor, reopen the claim if possible, and correct the underpayment
Good faith requires adjusters to correct known underpayments even after settlement, subject to applicable release agreements and state law.
Question 7: Which of the following activities would most likely require an automotive loss adjuster to obtain a separate license in most US states?
- Inspecting vehicles at a repair facility
- Conducting public adjusting work on behalf of policyholders for compensation (Correct answer)
- Preparing an internal damage estimate for the insurer
- Photographing vehicle damage for claim documentation
Correct answer: Conducting public adjusting work on behalf of policyholders for compensation
Public adjusting — representing policyholders for compensation — requires a separate public adjuster license distinct from an independent adjuster license.
CALA Adjuster Professional Ethics 4
Under the NAIC Model Unfair Claims Settlement Practices Act, failing to acknowledge claim communications within a reasonable time is considered: