CPCU 520 PRACTICE TEST QUESTIONS EXAM STUDY MATERIALS
QUESTION AND ANSWERS (VERIFIED ANSWERS)
1. **Which department at Keithly can help Alex with an audit problem?**
- a) Claims Department
- b) Risk Control Department
- c) Special Investigation Unit
- d) Marketing Department
- **Answer:** c) Special Investigation Unit
2. **What is a FAIR plan and who does it cover?**
- a) A private insurance plan for high-risk individuals
- b) A state-run plan where costs are spread among private insurers
- c) A local insurance plan for small businesses
- d) A nationwide plan for international companies
- **Answer:** b) A state-run plan where costs are spread among private insurers
3. **Which department provides information to help underwriters select and rate risks?**
- a) Claims Department
- b) Marketing Department
- c) Risk Control Department
- d) Legal Department
- **Answer:** c) Risk Control Department
4. **What is the minimum obligation of an insurer to society?**
- a) Maximize profits
, ESTUDY
- b) Expand market share
- c) Avoid causing any public harm
- d) Increase policy limits
- **Answer:** c) Avoid causing any public harm
5. **Which insurer function includes setting insurance rates and estimating loss reserves?**
- a) Claims Department
- b) Actuarial Department
- c) Risk Management Department
- d) Underwriting Department
- **Answer:** b) Actuarial Department
6. **How can property-casualty insurers be classified?**
- a) By the types of policies they offer
- b) By their size and financial strength
- c) By their licensing status
- d) By their market share
- **Answer:** c) By their licensing status
7. **What is true about an insurer's goals?**
- a) A mutual insurer must earn profits to operate.
- b) A proprietary insurer must earn competitive profits to raise capital.
- c) All insurers are non-profit organizations.
- d) A government insurer does not need to make a profit.
- **Answer:** b) A proprietary insurer must earn competitive profits to raise capital.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Estudyr. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.99. You're not tied to anything after your purchase.