Which of the Following Statements About Claims Settlement Is True

question 29

Multiple Choice

Which of the following statements about claims settlement is true?

• A)Agents are never authorized to settle claims.
• B)Independent adjustors may be used in a geographic area where the volume of business is too low for an insurer to have its own adjustors.
• C)A public adjustor is a salaried employee who works for one insurer.
• D)A company adjustor is hired by a policyholder to represent him or her if the policyholder does not agree with the claim settlement offered by the insurer.

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Definitions:

Statement of Financial Position

A financial document presenting an entity's assets, liabilities, and equity at a specific date, more commonly known as a balance sheet.

Prepayment Accounts

Accounts that reflect payments made in advance for expenses that will be incurred in future periods, treated as assets until used.

Supplies Expense

Costs associated with the consumable items that are used in the daily operations of a business and not intended for resale.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate period for a more accurate financial report.