6-C FIDUCIARY DUTY AND ETHICS EXAM QUESTIONS

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6-C FIDUCIARY DUTY AND ETHICS EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -21 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: Kirk is adjusting an auto liability claim submitted by Christine, who has

retained an attorney to represent her in the claim. Kirk should:

Answer:

deal directly with the attorney, not Christine.Question 2: Patricia is a new adjuster whose primary goal is her employer's financial benefit.

This goal makes Patricia susceptible of the ethical challenge of:

Answer:

bias for the insurer

Question 3: Which of the following is not part of the adjuster code of ethics?

• Promptly reporting conduct violations of licensed insurance representatives
• Exercising care when dealing with elderly clients.
• Ensuring that a settlement favors the insurer.
• Making truthful and unbiased reports.

Answer:

• Ensuring that a settlement favors the insurer.

Question 4: ABC Renovations has negotiated a deal with Tim: if he is involved in settling a claim needing interior or exterior renovations, Tim will steer business towards ABC Renovations. ABC Renovations will pay Tim $50 per referral. In participating in this deal, Tim is accepting

Answer:

kickbacks.Question 5: An insurance adjuster is obliged to inform claimants of their rights under the insurance contract in which of the following situations?

• Claims involving elderly claimants
• Claims involving traumatized claimants
• Third-party claims
• Every claim the adjuster handles

Answer:

• Every claim the adjuster handles

Question 6: When Jeanette shows up to handle a claim on behalf of ABC Insurance, she evaluates the claim and negotiates a settlement. Maintaining her integrity and acting ethically Jeanette is fulfilling her.

Answer:

Fiduciary duty Question 7: Insurance adjusters face many situations in the course of their employment that may cause them to deviate from their ethical standards. Which of the following situations most likely might cause such a deviation?

• Pressure to please an employer
• Meeting a claimant
• Analyzing a claim
• Reporting on a claim back to the insurer

Answer:

Pressure to please an employer Question 8: When an adjuster is engaging in salvage misappropriation, he is:

Answer:

Taking possession of salvaged property for his own use or benefit.

Question 9: A discussion of ethics in insurance adjusting would not focus on:

Answer:

premiums Question 10: Inducement can be defined as:

Answer:

An action, item, or promise made to someone to motivate him toward certain desired behaviors.Question 11: Evangeline is negotiating a settlement with a claimant, who becomes dissatisfied with Evangeline's suggestions and asks if he can consult with an attorney before proceeding.Evangeline knows that her offer is fair and advises the client not to spend the money on an attorney. Why are Evangeline's actions unethical?

Answer:

Evangeline cannot advise a client to refrain from seeking legal advice in any situation Question 12: Bobby is adjusting a complicated auto claim. Which of the following is TRUE?

• Since the policyholder (Jane) and the third-party claimant (Neil) disagree as to who was at

fault, Bobby must advise Jane to hire an attorney.

• Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what

happened before the accident, Bobby should feel free to contact her 45-year old caretaker for clarification.

• Bobby needs to obtain permission from Neil, the claimant, before he interviews Jessica, who

was riding in the car with Neil and witnessed the accident.

• Since the policyholder (Jane) and the third-party claimant (Neil) disagree as to who was at

fault, Bobby must advise Neil to hire an attorney

Answer:

Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what happened before the accident, Bobby should feel free to contact her 45-year old caretaker for clarification.Question 13: Caroline was involved in a car accident in which her husband was killed. Jillian is adjusting the insurance claim. Which of the following is TRUE?

• As an adjuster who wishes to act with speed and diligence, Jillian should pressure Caroline to

accept a settlement as soon as possible

• Jillian should wait until Caroline seems emotionally stable before negotiating a settlement
• Jillian should recognize that Caroline's emotional state offers her an advantage in the

negotiation process, and she should take advantage of this for the sake of her employer.

• Jillian should try to help Caroline by offering her a larger settlement for damaged car.

Answer:

• Jillian should wait until Caroline seems emotionally stable before negotiating a settlement

Question 14: Which of the LEAST important duty of an insurance adjuster?

• Making sure the claimant is happy with the settlement amount.
• Fulfilling one's fiduciary duty to the employer
• Executing a thorough investigation of the claim
• Providing a fair and equitable settlement for the policyholder.

Answer:

Making sure the claimant is happy with the settlement amount.Question 15: April, an independent adjuster, gets paid on a fee schedule. This means that the larger the claim, the more money April makes from adjusting it. In order to increase her commission, she normally adds an additional 1% to the amount of the settlement. This is illegal

practice known as:

Answer:

settlement padding Question 16: Bill is an independent adjuster who gets paid a commission basis. The larger the claim, the more money he makes. Because of this, Bill usually increases the settlement amount

by about 1 to 2%, to increase his commission. This practice is known as:

Answer:

settlement padding Question 17: Michelle is at Betty's house, adjusting her water damage claim. While walking through the house, Michelle notices an intricate quilt laying on the back of Betty's sofa and makes a comment about how pretty it is. After completing her inspection, Michelle comes back to Betty to review her findings wit her, but before she gets the chance, Betty tells Michelle that she would like her to have the quality as a gift. What should Michelle do?

Answer:

Michelle should politely refuse because the quality could be considered an inducement.Question 18: Jack and Gregg are both adjusters working claims in the same area after a large hailstorm. One day, Gregg tells Jack that he should inflate the settlements on his claims so he can make some extra money in commissions. Gregg says that he does it all the time, since things are so hectic after a storm that no one will notice if a little extra is added to each of his claims. What should Jack do in this situation?

Answer:

Jack has a duty to report Gregg's ethical violations