AU 60 Final Exam Questions With Revised Correct Answers Revised & Reviewed Guaranteed Pass!!
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Course
AU 60
Institution
AU 60
AU 60 Final Exam Questions With
Revised Correct Answers
Revised & Reviewed
Guaranteed Pass!!
1) Lily is a large account underwriter for XYZ Insurance. The insurer is
concerned about its exposure to emerging risks such as climate
change, cyber risk, and resource management. Lily has...
AU 60 Final Exam Questions With
Revised Correct Answers
Revised & Reviewed
Guaranteed Pass!!
1) Lily is a large account underwriter for XYZ Insurance. The insurer is
concerned about its exposure to emerging risks such as climate
change, cyber risk, and resource management. Lily has been asked
to be part of a team evaluating the exposures and reviewing policies
written by XYZ Insurance to make sure that they are providing, or
excluding, the exposures as intended. Lily's familiarity with which
one of the following aspects of the insurance market would make
her a valuable member of this team? - ANSWER Coverages and
the policy wording
2) Which one of the following is the most common use of predictive
modeling in the underwriting of small commercial accounts? -
ANSWER Rating
3) Which one of the following is the primary reason that governments
seek to prevent insurer insolvency through underwriting regulation?
- ANSWER To prevent insureds from being left without coverage
and suffering great financial loss
,4) Which one of the following insurer employees would be best
qualified to answer an underwriter's technical questions about an
applicant's operations? - ANSWER Premium auditor
5) An insurer's comprehensive income includes - ANSWER
Unrealized gains and losses on securities.
6) Equity multiplier is calculated by taking - ANSWER Total assets
divided by shareholders' equity.
7) The potential for hidden underwriting risks of associated insureds is
greatest with which one of the following forms of ownership? -
ANSWER Corporation
8) Mortgageholders have a security interest in which one of the
following types of property? - ANSWER Real property
9) The amount needed to pay future claims and loss adjustment
expenses is - ANSWER Supplied by advisory organizations or
developed by insurers with large enough pools of loss data.
10) Individual rating plans use different approaches to modify the
rate for an account. Which one of the following types of individual
rating plans is used to modify the premium of liability insurance
policies based on risk characteristics such as condition of premises
, and equipment, and safety programs? - ANSWER Schedule
rating plan
11) All of the following are objectives of rate regulation, EXCEPT: -
ANSWER Rates promote availability and affordability of
insurance.
12) JKL Insurance Company entered into a new state as part of an
expansion strategy. Four independent agencies were appointed to
market JKL coverages. JKL was unaware that many insurers had
stopped writing workers compensation in the new state because of
rate inadequacy. The new agents, needing a carrier that was
accepting workers compensation, sold a large quantity of JKL
workers compensation insurance. As workers compensation is a
liability line, there was no early indication of any problem. The year-
end results for this line, however, were horrendous. Which of the
following sources of information could JKL have used to provide an
early warning that there was a problem? - ANSWER New
business review
13) CUL Insurance Company conducted a reunderwriting of its property
insurance policies during an economic recession. As expected, the
reunderwriting detected a large increase in losses that had been caused
on purpose. Intentionally bringing about a loss in order to collect from
an insurer is called - ANSWER Intentionally bringing about a loss to
collect from an insurer is called moral hazard.
, 14) Philip received a new business submission from producer Jane.
After reviewing the submission, Philip sent an email to Jane requesting
the additional information that he will need to underwrite the account.
Philip's email takes place in which one of the following phases of the
communication process? - ANSWER Transmission
15) ABC Insurance Company's ratio of premiums to surplus is 2 to 1. If
the state requirement where ABC transacts business is 3 to 1, then ABC
- ANSWER If the state requirement where ABC transacts business is
3 to 1, then ABC is meeting the state's surplus requirement.
16) 1Which one of the following statements regarding partnerships is
true? - ANSWER Underwriters should clearly designate on the
declarations page of a policy the name of the partnership to be insured.
17) Which one of the following statements about analyzing a book of
business during the reunderwriting process is true? - ANSWER
Deteriorating results caused by a loss frequency problem indicate a
policy selection problem.
18) The rate multiplied by the appropriate number of exposure units
results in the - ANSWER Premium
19) Most organizations must abide by a number of different data
privacy regulations. Which one of the following statements is true
regarding the General Data Protection Regulation - ANSWER The
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