AU 60 Exam Questions and Answers
Martin is a commercial underwriter. How can he minimize the effects of adverse selection? -
Answer-As an underwriter, Martin can minimize the effects of adverse selection by carefully
selecting applicants to insure, charging appropriate premiums for the accepted ...
During the course of an underwriting market conduct examination, what details do examiners
analyze? - Answer✔✔-During the course of an underwriting market conduct examination,
examiners analyze details such as these: • General compliance • Underwriting criteria •
Application of underwriting rules • Cancellation and nonrenewal practices
Jimmy is a new underwriter who has been assigned an account. Who might he wish to approach
for the best information? - Answer✔✔-Jimmy should aim to establish a good relationship with a
producer, as producers provide excellent and trustworthy sources of information for
underwriters. In fact, producers provide more information about an account for underwriters
than any other source: They are the first people to interview prospective clients, see the
property or operations to be insured, and evaluate an account's exposure to loss
In reviewing his account's application, Jimmy realizes he needs more information. Why might he
have determined this? - Answer✔✔-Jimmy may need more information for any of these
reasons: • To collect missing information • To investigate conflicting information • To verify the
accuracy of the information provided • To handle a complex account or account that presents a
relatively high degree of risk
What information is captured on an insurance application? - Answer✔✔-The insurance
application captures the name and address of the individual or organization that wants to buy
insurance and the types and amounts of insurance desired. A properly completed application
also provides the information needed to classify the account for rating purposes and to
determine the premium. In addition, information such as loss history and prior insurance can
assist in verifying and supplementing application information.
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