AFSB 151 Practice Exam Questions & Answers Already Passed!!
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Course
AFSB 151
Institution
AFSB 151
AFSB 151 Practice Exam Questions & Answers Already Passed!!
A type of reinsurance transaction that involves an agreement between the primary insurer and the reinsurer specifying how to transfer risks, that defines the eligible risks in terms of lines and classes of business, that specifies the p...
AFSB 151 Practice Exam Questions & Answers
Already Passed!!
A type of reinsurance transaction that involves an agreement between the
primary insurer and the reinsurer specifying how to transfer risks, that defines
the eligible risks in terms of lines and classes of business, that specifies the
parties' obligations, and for which eligible risks are automatically reinsured, is
Treaty reinsurance
A surety's liability for a surety bond can only cease to exist when the underlying
obligation/agreement has
been performed as specified in the contract or when the bond has been canceled
An organization that uses its collected data to calculate loss costs that member
company underwriters use to determine premiums for risks is
The SFAA
If the bond applicant is a business entity, from what parties do corporate sureties
routinely require indemnity agreements?
any persons who have major financial interests in the entity
he surety bond three-party relationship, the party who guarantees fulfillment of
the obligation and who will either perform the obligation or pay the costs for its
fulfillment is the?
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surety
Suretyship and insurance are alike in that
Insurance commissioners regulate both.
When evaluating a surety claim, claims representatives are often assisted by
outside legal counsel. What other professionals assist claims representatives?
engineers
Following the Civil War, the growing number and complexity of
financial/commercial relationships led to the need for
commercial suretyship
Designated depositories are banks approved by
A government entity and in which the official or employee should deposit public funds
Which one of these statements is true regarding financial guaranty bonds?
When in place, the entire issue of these bonds would have a higher investment grade,
allowing municipalities to sell their bonds at a lower interest rate.
What type of miscellaneous bond do sureties often write as open penalty forms to
provide for fluctuation of the value of the subject of the bond?
A lost security bond
The legally mandated hazardous waste facilities performance bond
Can be posted only for hazardous waste facilities with permits, and it requires an
underwriting review of the closure plan.
A person who commences an action against another to obtain an equitable
remedy may be required to post a bond before the court will proceed with the
action. This bond is called
, a plaintiff bond
One type of fiduciary bond is required of an individual who has the legal
responsibility for the care of a minor or a legally incompetent person or for such
a person's property. This bond is called
A guardians bond.
In this public official category of bonds, sureties pay losses when subordinates in
the principal's office cause them, as well as when the principal causes them. This
described category of bonds
Is officials who handle public funds, and the principals are charged with honesty and
faithful performance of duty while handling money as required by law
Under a public official bond guaranteeing the honesty of a treasurer
He or she must account for the cash that he or she holds while in office.
Public official bonds for officials who handle public funds
Guarantee losses that occur when the principal fails to follow designated depository
guidelines.
Bonds that are required by business entities and individuals to protect them from
loss, and for which the obligation is dictated by the contract between the
principal and the obligee and by the bond provisions, are
Nonstatutory bonds
Which one of the these groups, for the most part, serves the market for fidelity
and surety bonds in the United States?
Multiline property-casualty insurers
Which one of the following developed in the United States to guarantee the large
amounts of money involved in the country's industrial and commercial growth?
corporate suretyship
Which one of these is an accurate comparison of suretyship and banking?
Both suretyship and banking are financial relationships and deal with losses that are
generally defined in monetary terms; however, a surety guarantees more than just an
extension of credit.
A surety that is not satisfied with the principal's financial capacity, past
experience, and resources other than money will probably
Provide the bond subject to additional considerations and bond requirements
A surety choosing to write a risky bond typically insists that the principal post
adequate collateral in the form of
A liquid asset, such as a certificate of deposit, or cash.
A type of reinsurance in which the reinsurer evaluates the submission and can
accept or reject it, and which is often called "nonobligatory reinsurance," is
Facultative reinsurance.
Which one of the following is an example of a third-party beneficiary on a given
bond?
An heir on a fiduciary executor bond
In an unlimited cosurety arrangement, the obligee can collect
The full loss from any of the cosureties up to the penal sum of the bond.
Line underwriting activities generally include which one of the following?
Selecting insureds
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