AU 60 Final Exam Practice Questions
and Answers
The common distinction between field underwriters and corporate underwriters is that line
underwriters - Answer-Implement the steps in the underwriting process. Corporate
underwriters assist underwriting management with formulating underwriting po...
William is a plumber. He has a contract with a home builder to install the bathrooms in a new
housing development. William will supply the materials and equipment. He will be paid a fixed
fee per house and must complete the job by an agreed deadline. Which one of the following
best describes William's relationship to the home builder? - Answer✔✔-Subcontractor
Which one of the following sources of underwriting information provides a hazard index by line
of insurance for the various classifications? - Answer✔✔-Best's Underwriting Guide
Jackson is a commercial lines underwriter. When evaluating an organization's location, one of
the factors that he considers is how susceptible the organization is to social inflation. Social
inflation is typically of greatest concern when underwriting which one of the following lines of
business? - Answer✔✔-Liability
To understand why insurers charge a certain premium, the components must be understood.
The amount needed to pay future claims and loss adjustment expenses is referred to as -
Answer✔✔-Prospective loss costs.
Given the following data and using the pure premium ratemaking method, calculate the
insurance rate (rounded).
Incurred losses$750,000
Earned exposure units 12,500
Fixed expenses per exposure unit $15
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