AIC 300 Claims in an Evolving World
Study Guide
Indemnify - ✔ To restore a party who has sustained a loss to the same financial
position that party held before the loss occurred
Claims Representative - ✔️A person responsible for investigating, evaluating, and
settling claims
Third-party Adminstrator - ✔️An organization that provides administrative services
associated with risk financing and insurance
Producer - ✔️Any of several kinds of insurance personnel who place insurance and
surety business with insurers and who represent either insurers or insureds or both
Public Adjuster - ✔️An outside organization or person hired by an insured to
represent the insured in a claim in exchange for a fee
Premium Audit - ✔️Methodical examination of a policyholder's operations, records,
and books of account to determine the actual exposure units and premium for
insurance coverages already provided
Loss Ratio - ✔️A ratio that measures losses and loss adjustment expenses against
earned premiums and that reflects the percentage of premiums being consumed by
losses
Loss Adjustment Expenses (LAE) - ✔️The expense that an insurer incurs to
investigate, defend, and settle claims according to the terms specified in the
insurance policy.
First Notice of Loss (FNOL) - ✔️The initial report notifying the insurer of a claim
Reserve - ✔️The amount the insurer estimates and sets aside to pay on an existing
claim
Individual Case Method - ✔️A method of setting reserves based on the claim's
circumstances and the claims representative's experience in handling similar claims
Roundtable method - ✔️A method of setting reserves by using the consensus of two
of more claims personnel who have independently evaluated the claims file
Average Value Method - ✔️A case reserving method that establishes a
predetermined dollar amount of reserve for each claim as it is replaced
Formula Method - ✔️A method of setting claim reserves by using a mathematical
formula
