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CPCU 520 1st Ed Chapter 4 Questions And Answers With Verified Solutions Already Passed!!!
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CPCU 520 1st Ed Chapter 4 Questions And Answers With Verified Solutions Already Passed!!!
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CPCU 520 1st Ed Chapter 4Questions And Answers With Verified
Solutions Already Passed!!!
Underwriting - ANSWER✔✔ The process of determining what loss exposures will
be insured, for what amount of insurance, at what price, and under what
conditions
Book of Business - ANSWER✔✔ A group of policies, also called a portfolio, with a
common characteristic, such as territory or type of coverage, or all policies
written by a particular insurer or agency.
Adverse Selection - ANSWER✔✔ a situation that occurs because people with the
greatest probability of loss are the ones most likely to purchase insurance
Physical Hazard - ANSWER✔✔ A tangible characteristic of property, persons, or
operations that tends to increase the frequency or severity of loss.
Moral Hazard - ANSWER✔✔ A condition that increases the likelihood that a
person will intentionally cause or exaggerate a loss.
Attitudinal or morale hazard - ANSWER✔✔ A condition of carelessness or
indifference that increases the frequency or severity of loss.
Legal Hazard - ANSWER✔✔ A condition of the legal environment that increases
loss frequency or severity.
, Experience Rating - ANSWER✔✔ A rating plan that adjusts the premium for the
current policy period to recognize the loss experience of the insured organization
during past policy periods.
Schedule Rating - ANSWER✔✔ A rating plan that awards debits and credits based
on specific categories, such as the care and condition of the premises or the
training and selection of employees, to modify the final premium to reflect factors
that the class rate does not include.
Retrospective Rating - ANSWER✔✔ A ratemaking technique that adjusts the
insured's premium for the current policy period based on the insured's loss
experience during the current period; paid losses or incurred losses may be used
to determine loss experience.
Line Underwriter - ANSWER✔✔ Underwriter who is primarily responsible for
implementing the steps in the underwriting process.
Staff underwriter - ANSWER✔✔ Underwriter who is usually located in the home
office and who assists underwriting management with making and implementing
underwriting policy.
Underwriting audit - ANSWER✔✔ A review of underwriting files to ensure that
individual underwriters are adhering to underwriting guidelines.
Retention Ratio - ANSWER✔✔ The percentage of insurance policies renewed.
Success Ratio - ANSWER✔✔ The ratio of insurance policies written to those that
have been quoted to applicants for insurance
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