Which one of the following best explains why producers should be
alert to changes in clients' loss exposures?
A. Implemented risk management techniques may prove to be
ineffective or become obsolete.
B. Knowledge of such changes will inform their efforts to create a
list of experts that can be called to assist.
C. Producers can aid clients in developing risk management cost
allocation plans.
D. Producers have expertise about risk financing through
insurance. - ANSWER-A. Implemented risk management techniques
may prove to be ineffective or become obsolete.
The processing of almost every claim involves which one of the
following activities?
A. Engaging an accident scene reconstruction specialist
B. Determining the amount of damages or extent of loss
C. Subrogating
D. Salvaging - ANSWER-B. Determining the amount of damages or
extent of loss
Maria is a new producer who wears many hats when forming
relationships and then serving her established customers. In this
,capacity, which one of the following scenarios most accurately
describes her ongoing work wearing the hat of "claims handler"?
A. Customer Roland directly contacts Maria and she assumes full
responsibility for his claim as she was the first insurance employee to
receive the claims information.
B. Juanita directly contacts Maria who sold her a policy to adjust
her homeowners claim; Maria nicely explains she has no further
responsibilities after making the sale.
C. Alex directly contacts Maria after a hailstorm damages his new
car the day after he bought a policy from her, and she handles the
claim as he is a brand new customer.
D. Veronica directly contacts Maria for guidance on how to report a
stolen car, Maria provides that, and claims rep Sean takes over after
an introduction from Maria. - ANSWER-D. Veronica directly contacts
Maria for guidance on how to report a stolen car, Maria provides that,
and claims rep Sean takes over after an introduction from Maria.
Jessie is a new customer service representative (CSR) at the Winfield
Agency. Jessie usually engages in all the following activities,
EXCEPT:
Select one:
A. Answering billing inquiries
B. Explaining coverage
C. Reporting new claims
D. Determining coverage quotes - ANSWER-D. Determining coverage
quotes
,Michael is a commercial lines underwriter. He received a risk control
report on a new business that he had recently written with Laura, one
of his producers. After reviewing the report, Michael contacted Laura
to let her know that they needed to process a policy change request
adding a new classification and some exposures to the general
liability policy. These activities are occurring during which one of the
following steps of the underwriting process?
Select one:
A. Determine an appropriate premium
B. Issue required documents
C. Monitor the underwriting decision
D. Evaluate the application - ANSWER-C. Monitor the underwriting
decision
Earned premiums are the portion of written premiums that Select
one:
A. Apply to the part of the policy period that has already occurred.
B. Apply to the part of the policy period that follows a loss.
C. Are billed at the beginning of the policy period.
D. Are available to generate investment income. - ANSWER-A. Apply
to the part of the policy period that has already occurred
Which one of the following is the correct formula for calculating an
insurer's combined ratio?
Select one:
A. Investment income ratio + premium income ratio
, B. Investment income ratio + overall operating ratio
C. Loss ratio + underwriting ratio
D. Loss ratio + expense ratio - ANSWER-D. Loss ratio + expense ratio
Oscar's custom-built vehicle looks like a sausage sandwich on
wheels. He plans to drive it to special events at schools around the
country where it will serve as a mobile billboard to promote his
product. Oscar is surprised to learn that insurers are reluctant to
insure his vehicle because it fails to meet one of the ideal
characteristics of an insurable risk. Which characteristic is Oscar's
vehicle least likely to meet?
Select one:
A. Definite and measurable
B. Independent and not catastrophic
C. Pure risk
D. Large number of similar exposure units - ANSWER-D. Large
number of similar exposure units
If an insured wants to receive "new for old" in the event of a property
loss, he or she would purchase Select one:
A. Agreed value.
B. Replacement cost.
C. Market value.
D. Actual cash value (ACV). - ANSWER-B. Replacement cost.
Risk control can assist the claims department by Select
one:
A. Providing laboratory analyses.
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