Which of the following is NOT an example of Defense & Cost Containment (DCC)?

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Multiple Choice

Which of the following is NOT an example of Defense & Cost Containment (DCC)?

Defense & Cost Containment focuses on costs specifically incurred to defend and manage a claim to keep its overall cost under control. It includes items like surveillance expenses to detect fraud, fixed dollar amounts for medical cost containment programs, and expenses tied to litigation management. These are proactive, cost-control measures that a reinsurer covers under the DCC clause. Fees of adjusters and settling agents, however, are standard loss-adjustment expenses—the ordinary costs of processing and settling claims. They’re generally not categorized as DCC items. So the fee paid to adjusters and settling agents does not fit the DCC concept.

Defense & Cost Containment focuses on costs specifically incurred to defend and manage a claim to keep its overall cost under control. It includes items like surveillance expenses to detect fraud, fixed dollar amounts for medical cost containment programs, and expenses tied to litigation management. These are proactive, cost-control measures that a reinsurer covers under the DCC clause. Fees of adjusters and settling agents, however, are standard loss-adjustment expenses—the ordinary costs of processing and settling claims. They’re generally not categorized as DCC items. So the fee paid to adjusters and settling agents does not fit the DCC concept.

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