Documentation & Legal Requirements Flashcards
7 cards from real RIMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Documentation & Legal Requirements flashcards as text
Which U.S. federal law mandates that employers with 20 or more employees provide written notice of COBRA continuation coverage rights within a specified timeframe?
Answer: COBRA itself under Title X of OBRA 1985
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) requires employers to provide qualifying beneficiaries written election notice within 14 days of the plan administrator receiving notice of a qualifying event.
A risk manager is auditing vendor contracts and finds an 'insurance to value' clause. This clause is designed to:
Answer: Mandate that the insured maintain coverage equal to asset replacement cost
Insurance-to-value clauses require the insured to maintain coverage at a specified percentage (usually 80-100%) of the property's full replacement cost to avoid coinsurance penalties.
Under the Fair Credit Reporting Act (FCRA), if an insurer uses consumer report information to take an adverse underwriting action, the insurer must:
Answer: Provide the applicant an adverse action notice identifying the reporting agency
FCRA requires insurers to issue an adverse action notice that identifies the consumer reporting agency used, allowing the consumer to obtain a free report and dispute inaccuracies.
What is the key distinction between a 'reservation of rights' letter and a 'declination' letter in claims handling?
Answer: Reservation of rights defends under a coverage caveat; declination refuses to defend or indemnify
A reservation of rights letter allows the insurer to defend the insured while reserving the right to later deny coverage; a declination letter outright refuses defense and indemnification.
Which type of insurance policy document formally amends, modifies, or adds to the terms of the original policy?
Answer: Endorsement
An endorsement (also called a rider) is a written document attached to the policy that changes its terms, conditions, exclusions, or coverages.
The Gramm-Leach-Bliley Act (GLBA) requires financial institutions, including many insurers, to provide customers with a privacy notice. How often must this notice be delivered under standard GLBA requirements?
Answer: Annually while the customer relationship continues
Under GLBA, covered institutions must provide customers with a clear and conspicuous privacy notice at account opening and annually thereafter.
In workers' compensation, the 'first report of injury' (FROI) document serves what primary regulatory purpose?
Answer: It officially notifies the state workers' comp board and insurer of a workplace injury
The FROI is the mandatory filing that notifies the state workers' compensation authority and the insurer that a workplace injury has occurred, initiating the claims process.