Exam (elaborations)
CPCU 530 LATEST QUESTIONS AND VERIFIED ANSWERS 2024/2025
- Course
- Institution
CPCU 530 LATEST QUESTIONS AND VERIFIED ANSWERS 2024/2025
[Show more]
Content preview
CPCU 530 LATEST QUESTIONS ANDANSWERS
1. What is the primary objective of insurance company management?
A) Maximizing shareholder value
B) Increasing market share
C) Reducing underwriting risk
D) Ensuring compliance with regulatory standards
Answer: A) Maximizing shareholder value
2. In insurance operations, what is the primary function of the underwriting
department?
A) Handling claims and payouts
B) Developing marketing strategies
C) Evaluating and selecting risks to insure
D) Investing insurance premiums
Answer: C) Evaluating and selecting risks to insure
3. Which of the following best describes the concept of "loss ratio" in insurance?
A) The ratio of premiums earned to claims paid
,B) The ratio of claims paid to premiums earned
C) The ratio of administrative expenses to claims paid
D) The ratio of investment income to premiums earned
Answer: B) The ratio of claims paid to premiums earned
4. What is the purpose of reinsurance for an insurance company?
A) To increase its customer base
B) To diversify its investment portfolio
C) To spread risk and reduce the potential for large losses
D) To enhance its marketing efforts
Answer: C) To spread risk and reduce the potential for large losses
5. Which of the following is a common method used by insurance companies to
assess the performance of their underwriting operations?
A) Investment yield analysis
B) Expense ratio analysis
C) Combined ratio analysis
D) Return on equity analysis
,Answer: C) Combined ratio analysis
6. What is the primary function of the actuarial department within an insurance
company?
A) Handling customer service inquiries
B) Developing marketing campaigns
C) Analyzing and predicting risk and financial outcomes
D) Managing claims settlements
Answer: C) Analyzing and predicting risk and financial outcomes
7. Which financial statement is used to assess an insurance company’s profitability
over a specific period?
A) Balance Sheet
B) Income Statement
C) Cash Flow Statement
D) Statement of Retained Earnings
Answer: B) Income Statement8. What is the purpose of the "reserve" in insurance
accounting?
A) To cover future claim payments
B) To increase investment returns
, C) To pay for administrative expenses
D) To finance new product development
Answer: A) To cover future claim payments
9. What is the term for the practice of combining similar risks into one portfolio to
diversify risk and reduce volatility?
A) Risk pooling
B) Risk selection
C) Risk retention
D) Risk transfer
Answer: A) Risk pooling
10. Which of the following is NOT a typical function of an insurance company's
claims department?
A) Investigating claims
B) Settling claims
C) Pricing insurance products
D) Reviewing claim documentation
Answer: C) Pricing insurance products
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 Alvon. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79223 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now