Claims Settlement & Negotiation Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Claims Settlement & Negotiation flashcards as text
In a structured settlement, periodic payments are typically funded through which financial instrument?
Answer: Annuity contract
Structured settlements are funded by annuity contracts purchased from life insurance companies, providing guaranteed periodic payments.
A claimant's attorney demands $200,000 for a disputed soft-tissue injury. The adjuster's reserve is $60,000. What is the most appropriate initial response?
Answer: Acknowledge the demand and request supporting medical documentation
The adjuster should acknowledge the demand and request substantiating documentation before making any counter-offer.
Which negotiation technique involves deliberately understating the initial offer to leave room for concessions?
Answer: Bracketing
Bracketing sets an opening offer strategically below the target settlement so the midpoint of demand and offer lands near the desired outcome.
Under the Unfair Claims Settlement Practices Act, failing to attempt a prompt, fair, and equitable settlement when liability is reasonably clear constitutes:
Answer: An unfair claims practice
The UCSPA prohibits failing to settle claims promptly when liability is clear, classifying it as an unfair claims settlement practice.
What does 'Mary Carter agreement' refer to in claims settlement?
Answer: A secret settlement where one defendant stays in the case while reducing claimant's recovery
A Mary Carter agreement is a secret contract where a settling defendant remains in the lawsuit but has a financial stake in the outcome against the non-settling defendant.
When a claimant is represented by an attorney, the claims adjuster should generally:
Answer: Communicate only through the claimant's attorney
Once a claimant retains counsel, all communications must go through the attorney to avoid ethical violations and potential bad faith claims.
A 'high-low agreement' in claims settlement means:
Answer: The verdict is bounded between a guaranteed minimum and a capped maximum regardless of jury award
A high-low agreement guarantees the claimant a minimum recovery and caps the insurer's maximum exposure regardless of the actual jury verdict.