All of the Following Statements About the Claims Handling Function

question 72

Multiple Choice

All of the following statements about the claims handling function are true except:

• A) overly liberal claims settlement procedures may be as bad as stingy claims settlement procedures
• B) claims settlement problems are generally more complex in property and liability insurance than in life insurance
• C) independent adjusters only work for small insurance companies
• D) negotiation with the claims adjuster is often the only contact the insurance buyer has with the insurer, besides the selling agent

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Definitions:

Direct Method

A cash flow statement preparation approach that lists major operating cash receipts and payments, providing a clearer view of a company's cash flow from operations.

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.

Operating Cash Flows

Cash generated from a company's regular business operations.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is used internationally.