AU 60 FINAL EXAM ACTUAL EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS (100% CORRECT ANSWERS) |
ALREADY GRADED A+ 2024-2025
If an insured recently implemented risk control measures
they believe will have immediate benefits and favorable
impact their loss experience, what type of plan would they
most likely want to use for the upcoming policy period?
Correct Answer retrospective rating plans - insured might
assert that the experience modification factor is not
responsive because it does not include data from the most
recent year
An underwriter analyzing historical loss data for loss
frequency trends must also evaluate historical _______
Correct Answer exposures
The underwriter's primary source of dependable
information about an account is the
A. Claims adjuster.
B. Applicant.
C. Current insurer
D. Producer. Correct Answer D. producer
Which one of the following insurer employees would be
best qualified to answer an underwriter's technical
questions about an applicant's operations?
Select one:
,A. Claim representative
B. Premium auditor
C. Producer
D. Risk control representative Correct Answer D. Risk
control representative
Which one of the following is the primary benefit of using
the services of an independent contractor who specializes
in risk control work to inspect properties, rather than the
insurer's risk control representative?
A. Independent opinion of risk
B. Customized reports
C. Customer contact
D. Quicker response Correct Answer D. Quicker response
Which one of the following external resources would give
Alex a general description of the industry's operations and
the level of hazard by line of insurance?
Select one:
A. Dun & Bradstreet Report
B. Best's Underwriting Guide
C. Scopes Manual
D. Fire Protection Handbook Correct Answer B. Best's
Underwriting Guide
Which one of the following Dun & Bradstreet report scores
shows how promptly the company pays its bills relative to
terms?
Select one:
A. Hazard index
,B. Financial stress class
C. Credit score class
D. Paydex Correct Answer D. Paydex
Which one of the following external sources of
underwriting information is more likely to be used by an
underwriter in the pricing phase, than in risk-selection
decisions?
Select one:
A. Government reports
B. Applicant's Web site
C. Financial reporting services
D. Insurance advisory organizations Correct Answer D.
Insurance advisory organizations
Which one of the following types of government records
do underwriters use as a source to predict future losses?
Select one:
A. Motor vehicle reports
B. Securities and Exchange Commission 10-K
C. Court records
D. Real estate records Correct Answer A. Motor vehicle
reports
John is a risk management specialist for XYZ Company.
John examines XYZ's financial statements on a quarterly
basis. Which one of the following best describes a reason
for this analysis?
Select one:
, A. A review of the financial statements helps John to
determine XYZ's ability to pay upcoming insurance
premiums
B. A review of the financial statements helps John to
assess XYZ's compliance with loan covenants
C. A review of the financial statements helps John to
evaluate XYZ's ability to finance premiums
D. A review of the financial statements helps John to
determine XYZ's insurance needs Correct Answer D. A
review of the financial statements helps John to determine
XYZ's insurance needs.
How is gross profit calculated? Correct Answer Gross
profit = sales - cost of goods sold
Which one of the following types of analysis helps an
underwriter identify abnormal values reported by an
organization?
Select one:
A. Vertical analysis
B. Historical analysis
C. Ratio analysis
D. Trend analysis Correct Answer A. Vertical analysis
Which one of the following ratios can be used to analyze
how the assets of a company are being financed?
Select one:
A. Debt-to-equity ratio
B. Debt-to-assets ratio
C. Asset turnover ratio
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