CCA Laws, Regulations, and Ethics 1 — Questions and Answers
Question 1: Which law prohibits unfair or deceptive acts in the insurance industry?
- Gramm-Leach-Bliley Act
- Fair Credit Reporting Act
- Unfair Claims Settlement Practices Act (Correct answer)
- Insurance Guaranty Act
Correct answer: Unfair Claims Settlement Practices Act
The Unfair Claims Settlement Practices Act is designed to protect consumers and ensure fair treatment by insurers.
Question 2: What is a primary ethical responsibility of a claims adjuster?
- Maximize claim payouts
- Settle quickly at all costs
- Provide legal advice
- Act honestly and transparently (Correct answer)
Correct answer: Act honestly and transparently
Maintaining honesty and transparency ensures trust and integrity in the claims process.
Question 3: Which entity typically regulates insurance practices at the state level?
- Department of Labor
- Federal Reserve
- Department of Insurance (Correct answer)
- Securities and Exchange Commission
Correct answer: Department of Insurance
Each state’s Department of Insurance oversees licensing, compliance, and consumer protection.
Question 4: A claims adjuster shares private policyholder info with a third party. What regulation may be violated?
- HIPAA
- GLBA (Gramm-Leach-Bliley Act) (Correct answer)
- FMLA
- ADA
Correct answer: GLBA (Gramm-Leach-Bliley Act)
The Gramm-Leach-Bliley Act restricts sharing of personal financial information without consent.
Question 5: Which of the following is an example of an unfair claims practice?
- Requesting proof of loss
- Promptly investigating a claim
- Denying a claim without investigation (Correct answer)
- Paying a claim based on policy limits
Correct answer: Denying a claim without investigation
Denying a claim without a proper investigation violates fair claims handling standards.
Question 6: What does ethical behavior in claims adjusting primarily ensure?
- Higher premiums for clients
- Improved public image
- Consumer trust and legal compliance (Correct answer)
- Larger settlements
Correct answer: Consumer trust and legal compliance
Ethical conduct helps protect consumers, uphold trust, and avoid legal penalties for misconduct.
CCA Laws, Regulations, and Ethics 1
Which law prohibits unfair or deceptive acts in the insurance industry?