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Ethics CPCU Exam Questions And Answers
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Ethics CPCU Exam Questions And Answers Ethics CPCU Exam Questions And Answers Ethics CPCU Exam Questions And Answers
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Ethics CPCUGiven an ethical dilemma concerning the public's understanding of risk management and insurance,
apply __________ and its associated rule to determine a resolution - ANS Canon 7
Obligates insurance professionals not only to inform the public about risk and insurance, but also to
keep current on any changing developments in the industry. Such developments could include new
legislation or a new regulation that affects how consumers make decisions regarding their insurance
needs. They can also include information on current trends and emerging issues affecting insurance
products or risk management. - ANS Rule 7.1
The public should be informed of the limitations of the insurance mechanism and the extent to which
insurance can and cannot meet overall risk management needs. This includes how deductibles and
exclusions may apply to certain loss situations - ANS Rule 7.1
Given an ethical dilemma involving potential misuse of the CPCU designation and key, apply __________
and its associated rules to determine a resolution. - ANS Canon 8
This is the only rule in the CPCU Code of Professional Conduct that includes specific guidelines. Failure to
adhere to these guidelines constitutes a rule violation. The guidelines are designed to assist CPCUs in the
dignified and professional use of the designation and key. They specify how the CPCU designation may
be used on business cards and stationery and in advertising and office listings - ANS Rule 8.1
Deal with misrepresentation and unfair comparison based on attainment of the CPCU designation.
CPCUs should not assert that, based solely on attainment of the CPCU designation, they have skills and
capabilities greater than those demonstrated by completing the CPCU program of study. CPCUs also
should avoid making any unfair comparisons between insurance professionals who have earned the
designation and those who have not - ANS Rules 8.2 and 8.3
Obligates CPCUs to avoid any actions that would lead others to believe they are representing The
Institutes in any official capacity unless the CPCU has been authorized by The Institutes to do so. Such
representations could appear in articles, presentations, speeches, or any other correspondence. Only
,those who are officers, staff, or members of the Board of Trustees of The Institutes are authorized to
represent or speak on its behalf - ANS Rule 8.4
Given an ethical dilemma surrounding the integrity of the CPCU Code of Professional Conduct, apply
__________ and its associated rules to determine a resolution - ANS Canon 9
CPCUs should neither initiate nor support the candidacy of any individual who engages in unethical
business practices that would violate the code's standards. CPCUs are obligated to support only those
CPCU candidates who exemplify the high ethical standards described in the canons and their associated
rules - ANS Rule 9.1
Encourages CPCUs to report code violations by bringing such violations to the prompt attention of the
appropriate parties for review. This does not mean that CPCUs are required to become investigators,
make judgments, or submit reports regarding the actions of other insurance professionals. Instead, it
simply meANS that CPCUs are generally encouraged, but not required, to voluntarily report information
on suspected violations - ANS Rule 9.2
When deciding whether to report an alleged code violation, an individual may be concerned about the
negative consequences that could result from making the report. __________ addresses this concern by
prohibiting any CPCU from retaliating against an individual who reports alleged code violations. This rule
may help to alleviate concerns a CPCU may have in doing his or her part to uphold the integrity of the
code - ANS Rule 9.3
Under __________ CPCUs are ethically required to report any use of the CPCU designation by an
individual who is not entitled to use it. Note that __________ differs from __________ in that it requires
CPCUs to report such infractions, rather than simply encouraging them to do so - ANS Rule 9.4, Rule 9.4,
Rule 9.2
Ethical behavior is based on - ANS reasoned consideration of all issues surrounding a conflict
Morality is - ANS universal and basic to human relationships
,Maintaining high ethical standards is best associated with - ANS knowledge of law and regulations
The Sarbanes-Oxley federal law requires that publicly traded companies identify principal ethics officers,
create anonymous hotlines for reporting unethical behavior, and - ANS establish codes of ethics.
Enforceable components of the CPCU Code of Professional Conduct are the - ANS Guidelines and Rules.
Lloyd is a commercial property underwriter at Insurance Company (IC). Two years ago, he completed his
studies and obtained the CPCU designation. Due to recent changes in workers compensation legislation
in one of the states in which IC operates, the insurer has arranged for a one-day seminar to explain the
changes and the impact they will have on underwriting and claim settlement. Considering Lloyd's
obligations under the Code of Professional Conduct (the Code), which one of the following statements is
correct?
Choose one ANSwer.
A. Lloyd is required to complete any training made available by his employer.
B. Because Lloyd has his CPCU, further training is considered unnecessary.
C. The Code requires Lloyd to remain current on all changes in insurance legislation.
D. Because the seminar is not directly related to Lloyd's job, he is not obliged to attend. - ANS D.
Because the seminar is not directly related to Lloyd's job, he is not obliged to attend.
Ming is the chief actuary at ABC Insurance and a CPCU. Ming has developed a new method for
calculating incurred but not reported losses (IBNR). He has tested the method over a number of years
, and has found it to be much more accurate than the traditional method used by most actuaries. Because
the new method gives Ming more confidence in the accuracy of his rate-making data, it allows ABC to
charge lower rates than its competitors. This in turn gives ABC a marketing advantage. Which one of the
following best describes Ming's obligations under Canon 5 of the Code of Professional Ethics regarding
raising the professional standards of the insurance profession?
Choose one ANSwer.
A. The new IBNR calculation method constitutes a trade secret and Ming is under no obligation to
divulge it.
B. Because the new method could benefit consumers in terms of lower rates, Ming is required to share it
with other insurers. - ANS A. The new IBNR calculation method constitutes a trade secret and Ming is
under no obligation to divulge it.
Elin is a surety producer and a CPCU. She regularly deals with legal and accounting information. She
notices that certain financial information provided by a contractor shows a deteriorating financial
position. To best comply with Rule 6.1 of the Code of Professional Conduct as it concerns confidential
information needed by a professional, Elin should
Choose one ANSwer.
A. Suggest that a competing contractor consider merging with the client.
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