CALA Risk Management & Fraud Prevention in Claims Handling 4

Question 1

A claimant presents a police report filed three days after the alleged accident. Why is the delay significant to a fraud investigation?

Accepted Answer

It may suggest the claimant had time to stage evidence or recruit witnesses

Answer

Late reports are inadmissible as evidence in insurance proceedings

Answer

It automatically triggers a reserved rights letter

Answer

It voids the insured's cooperation clause obligations

Question 2

In risk management, what does 'loss trending' help an insurer accomplish?

Accepted Answer

Project future claim costs based on historical patterns

Answer

Identify individual claimant credibility

Answer

Determine at-fault party in multi-vehicle accidents

Answer

Calculate depreciation on total-loss vehicles

Question 3

Which type of fraud involves an attorney recruiting accident victims to treat with specific medical providers who over-bill for services?

Accepted Answer

Attorney runner/capper scheme

Answer

Swoop and squat

Answer

Insurer insolvency fraud

Answer

Hard fraud ring operation

Question 4

An adjuster is reviewing an EUO transcript. The insured repeatedly contradicts details they gave in their recorded statement. This is BEST used as:

Accepted Answer

Evidence of inconsistency supporting a fraud referral

Answer

Grounds for immediate policy cancellation

Answer

Proof of coverage avoidance under misrepresentation

Answer

Documentation to invoke the appraisal clause

Question 5

What is the key distinction between 'hard fraud' and 'soft fraud' in automotive claims?

Accepted Answer

Hard fraud is premeditated; soft fraud involves exaggerating a legitimate claim

Answer

Hard fraud involves property damage; soft fraud involves bodily injury

Answer

Hard fraud is committed by organized rings; soft fraud by individual policyholders only

Answer

Hard fraud is a felony; soft fraud is always a civil matter

Question 6

A repair shop submits a supplement for 'corrosion removal' on a vehicle with a pre-loss rust condition. An adjuster should:

Accepted Answer

Investigate whether the corrosion is pre-existing and not related to the covered loss

Answer

Approve the supplement as part of a complete repair

Answer

Deny the supplement as betterment is not covered

Answer

Refer the shop to the NICB immediately

Question 7

Which analytical technique uses data mining to score individual claims by likelihood of fraud based on historical patterns?

Accepted Answer

Predictive modeling / fraud scoring

Answer

Actuarial loss development

Answer

Subrogation potential analysis

Answer

Reserve adequacy testing