AIC-M flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insuring agreement

The policy section stating the core promise to pay covered losses; coverage analysis begins here before exclusions, conditions, and limits are examined.

Duty to defend

Broader than the duty to indemnify; it attaches when a claim is potentially within coverage, even when the allegations are groundless or false.

Reservation of rights letter

Written notice that the insurer will defend while coverage questions remain unresolved, preserving the right to deny coverage later and identifying the provisions at issue.

Occurrence policy

Covers injury or damage that takes place during the policy period regardless of when the claim is reported, subject to the policy's terms and conditions.

Claims-made policy

Responds to claims first made and reported during the policy period; retroactive dates and extended reporting periods determine coverage for prior acts.

Four corners rule

Coverage is assessed by comparing the allegations in the complaint with the policy language without considering outside evidence in duty-to-defend disputes.

Policy limit erosion

Defense costs paid inside the limit reduce the amount available for damages, while outside-the-limit defense preserves the full policy limit for indemnity.

Concurrent causation

When a covered and an excluded peril jointly cause a loss, the outcome depends on jurisdiction and policy language such as anti-concurrent-causation clauses.

Negligence elements

Duty, breach, causation, and damages; the claimant must prove all four elements to recover in a typical negligence action.

Res ipsa loquitur

The thing speaks for itself; it permits an inference of negligence when the instrumentality was under the defendant's exclusive control and the event ordinarily does not occur without negligence.

Comparative negligence

Damages are reduced in proportion to the claimant's own fault; pure and modified versions differ on whether a claimant above a threshold recovers anything.

Proximate cause

A cause that is a substantial factor in producing injury and without which the harm would not have occurred, judged against foreseeability.

Strict liability

Liability without proof of negligence, applied to abnormally dangerous activities and defective products; causation and damages still must be established.

Statute of limitations

A statutory deadline for filing suit; it begins at the date of injury or discovery, depending on jurisdiction, and bars untimely claims.

Exclusive remedy doctrine

Workers compensation benefits are generally the employee's sole remedy against the employer for work-related injury, with limited exceptions for intentional torts in many states.

Collateral source rule

Prevents a tortfeasor from reducing damages because the injured party received compensation from another source such as health insurance or disability benefits.

Loss ratio

Incurred losses plus loss adjustment expenses divided by earned premium; a core measure of underwriting and claims performance.

IBNR reserves

Incurred but not reported reserves estimate liability for claims that have occurred but have not yet been reported or recorded in the system.

Case reserves

Estimates set on individual known claims reflecting expected ultimate cost, including indemnity, defense, and expense, reviewed as facts develop.

Claim frequency

Number of claims divided by exposure units such as policies or payroll; frequency measures how often losses occur in a book of business.

Claim severity

Average cost per claim, calculated as total incurred losses divided by claim count; severity drives reserve and pricing decisions.

Cycle time

Elapsed time from claim report to closure or a key milestone; shorter cycle time often correlates with lower LAE and better customer satisfaction.

Straight-through processing

Automated handling of low-complexity claims with minimal human touch, using rules and data to pay or deny quickly and consistently.

Claims triage

Sorting new claims by complexity, severity, and coverage risk to route each to the appropriate adjuster and handling path.

Good faith and fair dealing

An implied covenant requiring the insurer to treat the insured fairly, investigate promptly, and not unreasonably deny benefits owed under the policy.

Unfair claim settlement practices

Statutorily prohibited conduct such as misrepresenting policy provisions, failing to investigate promptly, or offering unreasonably low settlements without a reasonable basis.

Conflict of interest

A situation where personal or financial interest could bias claim decisions; it must be disclosed and the handler removed from the matter.

SMART goals

Performance objectives that are specific, measurable, achievable, relevant, and time-bound, used to align adjuster behavior with claims outcomes.

Coaching feedback model

Observation, impact, and request; describing specific behavior, its effect on results, and the desired change improves adjuster performance.

Confidentiality in claims

Personal and medical information must be protected and shared only on a need-to-know basis, consistent with privacy laws and policy terms.

Performance audit

A structured file review measuring compliance, accuracy, and outcomes against standards, used to identify training needs and process gaps.

Ethical decision test

Before acting, ask whether the decision is legal, balanced among stakeholders, and defensible publicly; documentation should reflect the reasoning.