CPCU 520 Final Exam With Correct Answers Graded A+

What is the formula for the GAAP method for determining return on equity - Net Income / Average Owners Equity State insurance departments enforce insurance laws enacted by the - state legislature What are the underwriting profitability functions of an insurer? - guarding against adverse selection, ensuring adequate policyholders' surplus, and enforcing underwriting guidelines. what is the co-participation provision of a primary insurer in it's reinsurance program - a provision in a reinsurance agreement that requires the primary insurer to retain a specified percentage of the losses that exceed its attachment point Generally the largest liability on the insurer's balance sheet and a significant part of an insurer's financial condition are the - Loss reserves for future claim payments. What are the steps in the claims handling process? - acknowledging and assigning the claim, identifying the policy and setting reserves, contacting the insured or the insured's representative, investigating and documenting the claim, determining the cause of loss, liability, and the loss amount. What is affinity marketing - group marketing that targets various groups based on profession, association, interests, hobbies, and attitudes. Computer processing or output that simulates human reasoning or knowledge is referred to as - artificial intelligence A commercial insurer has historically targeted small businesses. It is considering expanding its market to middle market organizations. To succeed, the insurer will need to develop a level of expertise in which one of the following areas? - Risk financing alternativesWhen using prospective loss costs supplied by advisory organizations to produce rates, each insurer must apply its own - loss cost multiplier