AU 60 Exam Practice Questions and
Answers
To achieve profitability, the underwriting function serves which one of the following additional
purposes? - Answer-C. Guarding against adverse selection
Which one of the following will draft a manuscript policy or endorsement that is worded to
address...
equity using the GAAP approach is 6 percent, determined by net income ($1,000,000) divided
by average owners' equity ($16,500,000).
Which one of the following is determined by a company's underwriting policy? - Answer✔✔-
Composition of the insurer's book of business
A rating plan available to commercial insurance applicants that awards debits and credits to a
submission based on specific categories is known as a(n) - Answer✔✔-Schedule rating plan.
An underwriter is working with a loss control representative on a new opportunity. Given the
complexity of the exposures, a physical survey is conducted by the loss control representative,
and a formal report is prepared. The report reveals that the insured owns several unattended
properties, and that they were unlocked when the loss control representative conducted the
survey. This failure to properly secure an unattended building would be an indicator to the
underwriter of which one of the following types of hazard? - Answer✔✔-Morale
Which one of the following is a financial measure of underwriting performance? - Answer✔✔-
Combined ratio
Which one of the following statements is correct regarding nonfinancial measures of
underwriting results? - Answer✔✔-Selection standards for underwriters usually support overall
underwriting goals and are evaluated during audits.
Which one of the following statements is correct with respect to market conduct examinations?
- Answer✔✔-They protect both insurers and consumers from unfair insurer practices.
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