1
Q
- Which statement correctly describes fiduciary duty?
a. It is the relationship, generally accepted in Canada, between insurers and their insured’s.
b. It generally exists between two parties who have conflicting interests.
c. It represents obligations created when someone is in a position of trust.
d. It is a principle whereby an insurer is not permitted to renege on its position when an innocent party has relied on it.
A
c. It represents obligations created when someone is in a position of trust.
2
Q
- Which of these defines spoliation of evidence?
a. Destruction of evidence before the case comes to trial
b. Sworn statements from witnesses or insured
c. Destruction of evidence when the case is being tried in court
d. Evidence collected in anticipation of litigation is privileged
A
a. Destruction of evidence before the case comes to trial
3
Q
- The two elements identified in R.V. Olan, Hudson and Harnett that must be present to prove insurance fraud are
a. Intent and dishonest gain
b. Deliberate actions and criminal breach of trust
c. Deceit and ill-gotten gains
d. Dishonesty and deprivation
A
d. Dishonesty and deprivation
4
Q
- Mens rea is significant in the prosecution of fraud because it describes
a. Intent as a component of fraud
b. The good faith required in the formation of insurance contracts
c. Misappropriate of money
d. Criminal breach of trust
A
a. Intent as a component of fraud
5
Q
- Which of the following correctly describes a waiver?
a. It is a principle whereby an insurer is not permitted to renege on its position when an innocent party has relied on it
b. It is derived from the position of special trust and confidence that one who holds funds or items of value for another occupies
c. It is the voluntary or intentional relinquishment of a known right or conduct from which someone can infer that a right is relinquished
d. It is a unilateral notice by the insurer asserting that it is preserving its options and waiving none of its rights
A
c. It is the voluntary or intentional relinquishment of a known right or conduct from which someone can infer that a right is relinquished
6
Q
- There are four main types of people who have their own attitudes about fraud. The realists
a. Are tolerant of insurance fraud because they believe many people do it.
b. Have the least tolerance for insurance fraud. They are willing to punish perpetrators severely because they feel there is no excuse for this type of behaviour.
c. Have a low tolerance for fraud but realize that it occurs. They do not advocate strong punishment as they believe some behaviours are justified.
d. Have a very high tolerance for fraud. They are ready to blame the insurance company for the problem as they believe insurers do not conduct business fairly.
A
c. Have a low tolerance for fraud but realize that it occurs. They do not advocate strong punishment as they believe some behaviours are justified.
7
Q
- What is not an example of fraud?
a. Identity theft
b. Staged auto scam
c. Committing arson
d. Not paying the payment on a newly purchased car
A
d. Not paying the payment on a newly purchased car
8
Q
- Which is not a strategy to restrict fraud?
a. Promoting fraud awareness
b. Teamwork
c. Detecting red flags
d. Good faith
A
d. Good faith
9
Q
- The definition of good faith is
a. A state of mind- honest belief, absence of malice and absence of design to defraud or to seek an unconscionable advantage
b. Knowing information about fraudulent insurance situations. These are red flag signals to help detect fraud
c. Is protection of an insured against unfair treatment in the case of a claim
d. A higher, stricter duty to act in good faith
A
a. A state of mind- honest belief, absence of malice and absence of design to defraud or to seek an unconscionable advantage
10
Q
- Which three main categories of fraud are discussed in this study?
a. Identity theft, mortgage theft, title theft
b. Premeditated insurance fraud, opportunistic fraud and padded claims
c. Staged auto scams, whiplash scams and medical rehab scams
d. Red flags, detection strategies and consumer hotlines
A
b. Premeditated insurance fraud, opportunistic fraud and padded claims
11
Q
- If an adjuster implies coverage to a claimant, what insurance term would apply?
a. Error and omission
b. Fraud
c. Estoppel
d. Bad Luck
A
c. Estoppel
12
Q
- Which of the following is a guideline from the Canadian Independent Adjusters Association ( CIAA) code of ethics?
a. An adjuster does not have to identify himself as an insurance adjuster in his dealings with any policyholder or claimant, nor is the adjuster required to disclose his principals
b. Policyholders will be given explanations with respect to their insurance coverage as relevant to the loss or claim being insured.
c. Policyholders and claimants do not have to provide written consent for adjusters t gain access to medical records
d. Policyholders and claimants can obtain legal advice from an adjuster
A
b. Policyholders will be given explanations with respect to their insurance coverage as relevant to the loss or claim being insured.
13
Q
- How can a broker limit or restrict fraud?
a. By only accepting cash for policies
b. Public outreach pre-screening and qualifying potential applicants
c. Insisting on a reference before issuing a policy
d. Always getting a credit score on applicants
A
b. Public outreach pre-screening and qualifying potential applicants
14
Q
- What is the primary duty of an underwriter?
a. To socialize with the brokers and clients
b. To accept or reject business within authority levels
c. To improve golf skills to impress brokers
d. To increase written premiums in the underwriter’s portfolio
A
b. To accept or reject business within authority levels
15
Q
- What is the best way to combat fraud at all levels in the organization?
a. Take a share of the proceeds of crime
b. Become educated in the adverse behaviour and take steps to limit it
c. Tell everyone about your experiences
d. Be rude to possible fraudsters
A
b. Become educated in the adverse behaviour and take steps to limit it
16
Q
- Which item is NOT a contact pattern red flag?
a. Applicant is never available to meet- only deals on the telephone
b. Applicant is not known to anyone at the brokerage, agency or insurer’s office
c. Applicant comes in at noon, at the end of the day or on a Friday when staff may be rushed
d. Applicant is in a hurry to complete the application and the interview
A
b. Applicant is not known to anyone at the brokerage, agency or insurer’s office
17
Q
- One of the most important functions that agents and brokers perform is to
a. Consistently elicit information and record it accurately
b. Evaluate the physical hazards
c. Explain why certain information is required
d. Gain some knowledge of the applicants background
A
a. Consistently elicit information and record it accurately
18
Q
- Which of the following is a moral hazard?
a. A man who leaves his unlocked car running in the driveway
b. A restaurant business experiencing financial difficulties
c. A grocery store that does not enforce its floor-sweeping regulations
d. A homeowners that does not shovel her sidewalk
A
b. A restaurant business experiencing financial difficulties
19
Q
- What are phantom vehicles?
a. Vehicles that do not exist or are already wrecked
b. Vehicles that have been branded
c. Vehicles with pre-existing damage
d. Vehicles with special equipment
A
a. Vehicles that do not exist or are already wrecked
20
Q
- Pre-insurance inspections are an initiative to reduce false and inflated insurance claims regarding which of the following?
a. Phantom vehicles
b. Expensive equipment and accessories
c. Motor homes
d. Staged accidents
A
a. Phantom vehicles
21
Q
- Which of the following has an impact on the increase of fraud claims?\
a. Greed makes people do bad things
b. A person cannot be blamed if the pressure is on
c. A fancy new home in the neighbourhood may make others feel inadequate with their devalued home
d. No one gets harmed with a little insurance-claim padding
A
a. Greed makes people do bad things
22
Q
- Why is it important to make brokers and agents aware of changes in the personal lives of their clients?
a. They can increase the coverage and make more commission
b. They can get invited to their parties
c. They get to understand the exposure if they get to know the risk
d. They do not have to check out their face book page as much
A
c. They get to understand the exposure if they get to know the risk
23
Q
- Why is it important to review the claims history of an insured when a policy is being renewed?
a. To make sure you charge the right premiums
b. To determine if the risk should be renewed
c. To share the info with your co-workers
d. To delete the coverage of the last claims from the next renewal
A
b. To determine if the risk should be renewed
24
Q
- If there is a request for more coverage, it means
a. The client wants to increase their insurance coverage
b. The client maybe feels they could benefit from a claim soon
c. Someone they know had an under-insured claim
d. It could be an honest need, or a potential flag depending on the circumstances
A
d. It could be an honest need, or a potential flag depending on the circumstances
25
25. Why must insurers and brokers carefully evaluate any request for increases in coverage?
a. Because they should ensure it makes sense to the policy or client needs
b. To see if they could increase other coverage and make more money
c. To satisfy the claims adjusters who complain about underinsurance
d. Better to have everyone over-insured
a. Because they should ensure it makes sense to the policy or client needs
26
26. An Adjuster’s main role is
a. To investigate, determine policy coverage, and negotiate and settle claims
b. To write policy for the insurance industry
c. To investigate claims on behalf of an insurance company
d. To report all fraud to the IBC
a. To investigate, determine policy coverage, and negotiate and settle claims
27
27. In order to operate legally in Canada, independent adjusters need
a. To be notarized to work in the industry
b. To have background clearance to be employed in that capacity
c. To be licensed to operate
d. To be employed by an insurance company
c. To be licensed to operate
28
28. When choosing an adjuster, you need to choose one based on the following:
a. The adjuster has strong opinions on all areas of the case
b. The adjuster has a good attitude and demonstrates good faith
c. The adjuster will work only with his or her contacts to repair damaged property
d. The adjuster is biased to the insurance company
b. The adjuster has a good attitude and demonstrates good faith
29
29. What is the purpose of a non-waiver agreement?
a. Provides protection to insurers without prejudicing its rights
b. Is a standard formality that only benefits insurers
c. Can create an estoppel
d. Is not required to be signed by the insured
a.Provides protection to insurers without prejudicing its rights
30
30. Forensic experts
a. Can hinder fraud investigations
b. Are required by law to be used in fraud investigations
c. Are connected to a court of law and can be hired by an insurer or insured to appear in court as witnesses
d. Cannot give testimony in court
c. Are connected to a court of law and can be hired by an insurer or insured to appear in court as witnesses
31
31. What are the key elements of an arson defence?
a. The fire stopped, the fire Marshal investigated, and the claim was paid.
b. The fire was set, the insured had motive, and the insured had opportunity
c. The fire was set, a competitor had motive, and the competitor had opportunity
d. The fire occurred, it was extreme and the insured’s policy was very large
b. The fire was set, the insured had motive, and the insured had opportunity
32
32. Which is not a business-related indicator?
a. The area is subject to an economic recession
b. Competition in the insured’s line of business is ruthless
c. The insured’s business is booming
d. The insured has suffered a health problem and wants out of the business
c. The insured’s business is booming
33
33. When investigating a theft claim and the items are not available, what proof must be established concerning the items?
a. Proof must be established regarding where the items were purchased
b. Proof must be established regarding the value, existence and ownership of the items
c. Proof must be established regarding the use of the items
d. Proof must be established regarding the composition of the items
b. Proof must be established regarding the value, existence and ownership of the items
34
34. Which is not a theft analysis indicator?
a. Insured is acting aggressively and pushing for a settlement
b. Insured is very busy
c. Insured is usually knowledgeable about the claims process
d. Receipts are presented in a neatly arranged dossier
b. Insured is very busy
35
35. What is arson?
a. An actual or attempted malicious and deliberate burning of physical property by its owner or another person
b. Is caused by faulty electrical wiring
c. Is started with an accelerant that leaves a regular vee pattern formation
d. Occurs in a well-trafficked area where there are plenty of witnesses
a. An actual or attempted malicious and deliberate burning of physical property by its owner or another person
36
36. Liability claims arise from which types of cases?
a. Business owners policy
b. Commercial auto insurance
c. Slip and fall and products liability
d. Errors and omissions insurance
c. Slip and fall and products liability
37
37. It is important for adjusters to have which of the following abilities?
a. Read situations accurately
b. Act on impulse
c. Interpret medical jargon
d. Recreate the scene of an accident
a. Read situations accurately
38
38. Malingering can be defined as which of the following?
a. Hanging around after the day is done
b. Returning to work earlier than expected after an illness
c. An excuse for taking a day off
d. The intention feigning of mental or physical illness to gain insurance money or to avoid returning to work
d. The intention feigning of mental or physical illness to gain insurance money or to avoid returning to work
39
39. Under which circumstance would a fraudster take advantage of a situation to file a fraudulent claim?
a. Large-scale disaster where a class action lawsuit may arise
b. A hit and run accident
c. A slip and fall accident at a friend’s house
d. Being struck by lightening
a. Large-scale disaster where a class action lawsuit may arise
40
40. How can digital video surveillance be important in a case?
a. To ensure that the claimant is alive and well
b. To establish how active the claimant is and provide evidence that the claimant has full range of movement
c. To capture the claimants best profile
d. To help health care professionals determine the best course of action to treat the claimant
b. To establish how active the claimant is and provide evidence that the claimant has full range of movement
41
41. What is a phantom vehicle?
a. A vehicle made by ford?
b. A vehicle created on paper intended to defraud
c. A vehicle that transforms into another
d. A vehicle being repaired
b. A vehicle created on paper intended to defraud
42
42. What motivates insurance fraud?
a. Financial downward changes
b. A successful career
c. A happy satisfied life
d. A salary increase
a. Financial downward changes
43
43. What is a Mareva Injunction
a. A court order that freezes the assets of a defendant, in certain circumstances, pending the determination of a plaintiff’s claim
b. A work-stoppage order
c. An unfair law
d. A Mexican Tourist site
a. A court order that freezes the assets of a defendant, in certain circumstances, pending the determination of a plaintiff’s claim
44
44. What is vehicle branding?
a. The make and model of a vehicle
b. A Ministry or Transportation term to identify vehicle status
c. Vehicle modifications that can be made after purchase
d. New options on vehicles that can be ordered at time of purchase
b. A Ministry or Transportation term to identify vehicle status
45
45. What is arson?
a. Deliberate fire damage
b. An act condoned by the state
c. A way to get rid of unwanted stuff
d. A safe activity
a. Deliberate fire damage
Fraud CIP- Multiple Choice
flashcards
Decks in class (3)
# Cards
