AFSB 151 FLEX QUESTIONS AND ANSWERS GRADED A+

AFSB 151 FLEX QUESTIONS AND ANSWERS GRADED A+ Which one of the following statements regarding fidelity bond claims is true? By promptly investigating a bond loss, an insurer may discover that it has recourse against persons or entities whose conduct caused or contributed to the loss, but is not relevant to the proof of loss. Which one of the following statements regarding gathering information for surety claims is true? Claims by personnel can gather most of the needed information for a surety claim by applying the questions of who, what, when, where, why, and how to the claim. Brainpower Read More Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:07 / 0:15 Full screen Which one of the following statements regarding the goal of the fidelity and surety claims process is true? Once the claims personnel have determined that the surety is probably liable to the obligee under the bond, they begin the information gathering process Which one of the following statements regarding surety compliance with statutes and regulations is true? Surety and fidelity contracts are often prescribed by statue or regulation, including requirements for many license and permit bonds, fidelity coverages, and public official bonds. Which one of the following statements is true regarding financial reporting to reinsurers? When a primary surety establishes reserves, it determines a reinsurance recoverable reserve and notes in the records that reinsurance reserves have reduced posted reserves. Which one of the following characteristics is unique under American personal suretyship compared with corporate suretyship? Sureties were protected by laws that were favorable to them. Any promise to answer for another person's debts or defaults, including the promise that a surety makes to the obligee under a bond, derives from which one of these? Statutes of frauds A surety choosing to write a risky bond typically insists that the principal post adequate collateral in the form of A liquid asset, such as a certificate of deposit, or cash A surety that is not satisfied with the principal's financial capacity, past experience, and resources other than money will probably Provide the bond subject to additional considerations and bond requirements Under a cosurety agreement for which a principal defaults on the bond, how is the cosurety's share of the risk determined and how are losses paid? The osurety agreement defines each cosurety's share of the loss that is paid by the designated controlling cosurety, which then collects the agreed-upon portion of the loss and expense amounts from each surety. Which one of these statements provides an accurate description of license and permit bonds or their use? Licenses help regulate license holders through statues, regulates, or ordinances, and they are backed by license and permit bonds. Under a public official bond guaranteeing the honesty of a treasurer, He or she must account for the cash that he or she holds while in office. Public official bonds for officials who handle public funds, guarantee losses that occur when the principal fails to follow designated depository guidelines Bonds in the category of public official bonds for officials whose duties require direct involvement with members of the public pay losses when principals commit wrongful acts such as seizing the wrong goods or making wrongful arrests A bond that guarantees that, if a higher court sustains an initial judgement on appeal, the defendant will pay the entire judgement, plus court costs and interest, is A supersedes bond. Which one of the following contractor's assets would encourage a surety to underwrite contract bonds for the contractor or to extend a line of credit for bonding? Quality stocks and bonds and accounts receivable Sureties compete for commercial surety bonds in this category on the basis of service to the agent and to the client and they usually offer substantial price discounts for accounts with larger clients. License and permit and miscellaneous bonds A standard letter of authority from a surety usually allows the producer to approve which one of the following types of bonds without the surety's approval? Bankruptcy bonds When a corporation has a number of subsidiaries that will all require bonds, what type of agreement can be used that would allow the parent to provide indemnity for its current subsidiaries and affiliates, as well as for companies it might acquire or form in the future. Omnibus agreement Why does a surety not impose its own limitations on a public official bond? Because the law prescribes conditions for claims. Sureties underwrite both attachment and replevin bonds similarly, but they usually write replevin bonds More quickly and for smaller amounts The fidelity loss control measure of divided responsibilities, under which employees who regularly handle cash do not also handle merchandise, is impractical for some small businesses. To address this situation, which of the following practices should the employer perform? Make frequent spot checks Name the special characteristics of fidelity bonds to which this refers: The nature of the employment relationship provides the employee an opportunity to learn the firm's routines; schedules; and the existence, absence, or relative effectiveness of management controls Property exposed to loss is accessible What quality of the contractor-producer-underwriter relationship requires periodic visits to the contractor's office, visits to project sites with the contractor, and meetings with the contractor's key people concerns? Ongoing dialogue Frequently having to react to emergency or artificial deadlines indicates a lack of what quality in the contractor-producer-underwriter relationship Communication When assessing a contractor's capacity in terms of management control, what is the first step in the construction process? Estimating Which one of the following includes sections of the Consumer Credit Protection Act that apply directly to the surety industry? Titles VI and VII Which of the following statements is true regarding the surety underwriter's evaluation of a surety principal? The underwriter needs to obtain current information quickly or risk making a bad decision on broad-based or outdated information. Under which heading of the Payment section of D&B's Business information Report is there a summary of the company's payment history, including each vendor's experience during the previous twelve months? Paying Record Which one of the following is a consumer credit report provider that offers a Credit Risk Score that projects a consumer's potential of becoming a serious credit risk within 12 months? Experian Which one of the following is a consumer credit report providers is identified as being used by insurers, lenders, trade creditors, merchants, public utilities government agencies, and others? Equifax, Inc