EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
AU 60 Practice Exams Questions and
Answers
Tobias, a successful producer with Barnley's Insurance Company, is struggling with an intricate
quote on homeowners coverage for his insured, Hanna. Hanna not only has substantial
collections of guns and silverware, but also has a small farm located at her premises. Which one
of the following individuals from Barnley Insurance Company could provide assistance and
support to Tobias?
A. Corporate underwriter
B. The actuary
C. The claims representative
D. The field underwriter - Answer✔✔-D. The field underwriter
Which one of the following is the most common use of predictive modeling in the underwriting
of small commercial accounts?
Select one:
A. Risk analysis
B. Risk selection
C. Coverage proposal
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D. Rating - Answer✔✔-D. Rating
As a commercial lines underwriter, William would spend many hours reviewing and
summarizing the loss runs that were part of a new business application. He can now rely on a
computer to digitalize and summarize those loss runs. This is an example of how underwriting
has been transformed by which one of the following advancements in technology?
Select one:
A. Smart products
B. Machine learning
C. Internet of Things
D. Wireless sensor networks - Answer✔✔-B. Machine learning
Jane is Regional Manager for Goshen Mutual. The retention rate for her region's commercial
auto book has dropped by 10 percent over the last 18 months. Jane has asked an information
technology (IT) specialist to help her determine common characteristics among the accounts
that are renewing, those that are not renewing, and those that are most profitable. She is also
trying to determine if there is a common reason why accounts are not renewing. Which one of
the following forms of analysis will the IT specialist use to help Jane focus on improving her auto
retention?
Select one:
A. Predictive modeling
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B. Internet of Things
C. Smart products
D. Data mining - Answer✔✔-D. Data mining
During a mid-year review of one of her large accounts, Annette noticed that the frequency and
severity of auto losses had been trending downward over the past 18 months. When she
consulted with the account's risk management team, she learned that the insured had installed
telematics devices in many of their vehicles. This information would help support Annette's
decision to
Select one:
A. Propose a premium increase at renewal time.
B. Propose a premium reduction at renewal time.
C. Increase the physical damage deductible.
D. Add a special endorsement to the policy. - Answer✔✔-B. Propose a premium reduction at
renewal time.
Underwriters, in conjunction with ratemakers, help achieve actuarial equity by
Select one:
A. Ensuring that rates are consistent and vary little among insurers
B. Ensuring that all consumers have equal access to insurance at affordable rates.
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C. Charging similar premiums for all risks that they agree to insure.
D. Assigning insureds with similar characteristics to the same rating class. - Answer✔✔-D.
Assigning insureds with similar characteristics to the same rating class.
Adam is an analyst conducting a market conduct examination at DEF Insurance in response to a
consumer complaint. During the course of his review, he discovers that DEF has failed to apply
newly implemented underwriting and rating factors to renewals, failed to use mutually exclusive
underwriting guidelines for the company's different programs, failed to use correct forms and
rates, and failed to apply underwriting guidelines consistently by occasionally allowing
producers exceptions. Which one of these practices will Adam most likely allow the insurer to
continue?
Select one:
A. Not using correct forms and rates
B. Allowing producers exceptions in some cases
C. Using guidelines for different programs that are not mutually exclusive
D. Not applying new rates and rules to renewals - Answer✔✔-B. Allowing producers exceptions
in some cases
An insurance company must have adequate policyholders' surplus if it wishes to
Select one:
A. Avoid adverse selection.
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AU 60 Practice Exams Questions and
Answers
Tobias, a successful producer with Barnley's Insurance Company, is struggling with an intricate
quote on homeowners coverage for his insured, Hanna. Hanna not only has substantial
collections of guns and silverware, but also has a small farm located at her premises. Which one
of the following individuals from Barnley Insurance Company could provide assistance and
support to Tobias?
A. Corporate underwriter
B. The actuary
C. The claims representative
D. The field underwriter - Answer✔✔-D. The field underwriter
Which one of the following is the most common use of predictive modeling in the underwriting
of small commercial accounts?
Select one:
A. Risk analysis
B. Risk selection
C. Coverage proposal
Page 1/38
,EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
D. Rating - Answer✔✔-D. Rating
As a commercial lines underwriter, William would spend many hours reviewing and
summarizing the loss runs that were part of a new business application. He can now rely on a
computer to digitalize and summarize those loss runs. This is an example of how underwriting
has been transformed by which one of the following advancements in technology?
Select one:
A. Smart products
B. Machine learning
C. Internet of Things
D. Wireless sensor networks - Answer✔✔-B. Machine learning
Jane is Regional Manager for Goshen Mutual. The retention rate for her region's commercial
auto book has dropped by 10 percent over the last 18 months. Jane has asked an information
technology (IT) specialist to help her determine common characteristics among the accounts
that are renewing, those that are not renewing, and those that are most profitable. She is also
trying to determine if there is a common reason why accounts are not renewing. Which one of
the following forms of analysis will the IT specialist use to help Jane focus on improving her auto
retention?
Select one:
A. Predictive modeling
Page 2/38
,EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
B. Internet of Things
C. Smart products
D. Data mining - Answer✔✔-D. Data mining
During a mid-year review of one of her large accounts, Annette noticed that the frequency and
severity of auto losses had been trending downward over the past 18 months. When she
consulted with the account's risk management team, she learned that the insured had installed
telematics devices in many of their vehicles. This information would help support Annette's
decision to
Select one:
A. Propose a premium increase at renewal time.
B. Propose a premium reduction at renewal time.
C. Increase the physical damage deductible.
D. Add a special endorsement to the policy. - Answer✔✔-B. Propose a premium reduction at
renewal time.
Underwriters, in conjunction with ratemakers, help achieve actuarial equity by
Select one:
A. Ensuring that rates are consistent and vary little among insurers
B. Ensuring that all consumers have equal access to insurance at affordable rates.
Page 3/38
, EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024
C. Charging similar premiums for all risks that they agree to insure.
D. Assigning insureds with similar characteristics to the same rating class. - Answer✔✔-D.
Assigning insureds with similar characteristics to the same rating class.
Adam is an analyst conducting a market conduct examination at DEF Insurance in response to a
consumer complaint. During the course of his review, he discovers that DEF has failed to apply
newly implemented underwriting and rating factors to renewals, failed to use mutually exclusive
underwriting guidelines for the company's different programs, failed to use correct forms and
rates, and failed to apply underwriting guidelines consistently by occasionally allowing
producers exceptions. Which one of these practices will Adam most likely allow the insurer to
continue?
Select one:
A. Not using correct forms and rates
B. Allowing producers exceptions in some cases
C. Using guidelines for different programs that are not mutually exclusive
D. Not applying new rates and rules to renewals - Answer✔✔-B. Allowing producers exceptions
in some cases
An insurance company must have adequate policyholders' surplus if it wishes to
Select one:
A. Avoid adverse selection.
Page 4/38
