Regulatory Compliance and Ethics Flashcards
7 cards from real CAIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance and Ethics flashcards as text
An adjuster discovers that a claimant's medical bills were inflated by their provider. What is the adjuster's primary ethical obligation?
Answer: Document the discrepancy and refer it to the Special Investigations Unit
Suspected fraud must be documented and referred to the SIU per most state regulations and ethical standards.
Under the Unfair Claims Settlement Practices Act, what is the maximum timeframe most states require for acknowledging a claim after receipt?
Answer: 10 working days
Most state versions of the UCSPA require acknowledgment within 10 working days of receiving notice of a claim.
A state insurance department sends an examiner to audit a claims file. Which adjuster behavior would most likely be cited as a violation?
Answer: Routinely denying claims without a written explanation
Denying claims without written explanation of the basis violates UCSPA requirements in virtually every state.
Which of the following best describes a conflict of interest for an automotive insurance adjuster?
Answer: Referring a claim to a repair shop where the adjuster owns a financial interest
A financial interest in a referred vendor creates a conflict of interest that must be disclosed or avoided.
What does the principle of 'utmost good faith' (uberrimae fidei) require of an automotive insurance adjuster?
Answer: Acting honestly and disclosing all material facts relevant to the claim
Utmost good faith obligates both parties — including the adjuster — to act honestly and share all relevant information.
An adjuster licensed in Texas handles a claim for a vehicle accident that occurred in California. Which state's regulations primarily govern the claims handling process?
Answer: California, where the loss occurred
Claims handling is generally governed by the law of the state where the loss occurred.
Which action by an adjuster would constitute coercion under most state insurance codes?
Answer: Threatening to cancel a policyholder's coverage unless they accept a lowball settlement
Threatening adverse policy actions to force a claimant to accept an inadequate settlement is coercion, an unfair trade practice.