Insurance Technology & Digital Applications 2

Question 1

What is telematics in the context of auto insurance?

Accepted Answer

A system that remotely monitors driving behavior to adjust premiums

Answer

Telematics uses onboard devices or smartphone apps to track driving data like speed and braking, allowing insurers to offer usage-based pricing.

Question 2

Which regulation primarily governs how insurers must protect policyholders' personal data in the United States?

Accepted Answer

The Gramm-Leach-Bliley Act (GLBA)

Answer

The GLBA requires financial institutions, including insurers, to safeguard consumers' nonpublic personal information and provide privacy notices.

Question 3

An insurer uses an algorithm that automatically approves or denies life insurance applications. Which AI concern does this raise most directly?

Accepted Answer

Algorithmic bias potentially discriminating against protected classes

Answer

Automated underwriting algorithms can embed historical biases, leading to discriminatory outcomes for protected classes if not carefully audited.

Question 4

What does 'API integration' allow in modern insurance ecosystems?

Accepted Answer

Different software systems to share data and functions in real time

Answer

APIs (Application Programming Interfaces) enable insurers, agents, and third-party vendors to connect systems seamlessly for quotes, billing, and claims.

Question 5

A homeowner's insurer deploys drones after a hurricane. What is the primary advantage for claims handling?

Accepted Answer

Faster, safer roof inspections without requiring an adjuster on the damaged property

Answer

Drones allow rapid aerial imaging of storm-damaged roofs, speeding up the claims process while keeping adjusters safe.

Insurance Practice Test

Insurance Practice Test

Insurance Technology & Digital Applications 2