CALA Risk Management & Fraud Prevention in Claims Handling 5

Question 1

A claimant involved in a minor fender-bender claims total disability for six months. Which investigative tool BEST challenges the duration of disability?

Accepted Answer

Independent Medical Examination (IME)

Answer

An Independent Medical Examination by an insurer-selected physician can objectively assess whether the claimed disability duration is medically justified.

Question 2

Under most state insurance fraud statutes, what is required for an insurer to report suspected fraud without civil liability to the claimant?

Accepted Answer

A good-faith belief that fraud may have occurred

Answer

Most state fraud immunity statutes protect insurers from civil liability when fraud is reported in good faith, even if the allegation is ultimately unproven.

Question 3

What does a 'coverage defense' mean in the context of a fraudulent auto claim?

Accepted Answer

Denying indemnity based on a policy exclusion or misrepresentation voiding coverage

Answer

A coverage defense denies the claim based on policy provisions — such as fraud exclusions, material misrepresentation, or concealment — that void or limit coverage.

Question 4

An SIU investigator identifies that five separate claimants in recent accidents all share the same attorney, same chiropractor, and same repair shop. This pattern is MOST consistent with:

Accepted Answer

An organized fraud ring with coordinated referral relationships

Answer

Shared attorney, medical provider, and repair shop across multiple claimants is a hallmark indicator of an organized insurance fraud ring.

Question 5

Which element of risk management involves setting adequate case reserves on claims with fraud indicators?

Accepted Answer

Financial risk mitigation through accurate reserving

Answer

Accurate case reserves on potentially fraudulent claims protect the insurer's financial position and ensure regulatory reserve adequacy requirements are met.

(CALA) Certified Automotive Loss Adjuster Practice Test

(CALA) Certified Automotive Loss Adjuster Practice Test

CALA Risk Management & Fraud Prevention in Claims Handling 5