AU 60 MISSED PRACTICE TEST EXAM ACTUAL
PAPER 2026 QUESTIONS SOLUTIONS GRADED
A+
◉ Which one of the following is determined by a company's
underwriting policy?
Choose one answer.
A. The underwriting authority the insurer grants its producers
B. Composition of the insurer's book of business
C. The market pursued by the insurer
D. The rating organization to which the insurer will belong Answer:
B. Composition of the insurer's book of business
◉ Which one of the following statements is true regarding
ratemaking in different types of insurance?
Choose one answer.
,A. Most losses from catastrophic events, such as hurricanes, are
included in ratemaking data in the affected states.
B. Trending of losses in fire insurance is generally restricted to claim
severity.
C. The experience period used for property causes of loss other than
fire is usually five years or less.
D. Applying loss development factors to data is critical when claims
settle quickly and loss reserves are relatively small. Answer: B.
Trending of losses in fire insurance is generally restricted to claim
severity.
◉ Which one of the following types of individual rating plans can be
used by medium to large insureds in combination with risk control
and allows the insured to manage its cash flow by avoiding upfront
payments?
Choose one answer.
A. Schedule rating plan
B. Large deductible plan
,C. Individual risk premium modification plan
D. Expense modification plan Answer: B. Large deductible plan
◉ An insurer must decide what provision for profit and
contingencies should be included in the rate and should consider the
overall desired rate of return, including likely returns from
investment income versus
Choose one answer.
A. Policyholder surplus.
B. Underwriting profit.
C. Loss reserve amounts.
D. Loss adjustment expenses. Answer: B. Underwriting profit.
◉ The amount included in the insurance rate to protect insurers
against the possibility that actual claims or expenses will exceed
projections is referred to as
Choose one answer.
, A. The prospective loss costs.
B. The expense factor.
C. The loading for profits and contingencies.
D. The claims and eventualities factor. Answer: C. The loading for
profits and contingencies.
◉ Underwriting pricing activities usually include all of the following,
EXCEPT:
Choose one answer.
A. Account classification
B. Rating
C. Application of premium modification plans
D. Forecasting Answer: D. Forecasting
PAPER 2026 QUESTIONS SOLUTIONS GRADED
A+
◉ Which one of the following is determined by a company's
underwriting policy?
Choose one answer.
A. The underwriting authority the insurer grants its producers
B. Composition of the insurer's book of business
C. The market pursued by the insurer
D. The rating organization to which the insurer will belong Answer:
B. Composition of the insurer's book of business
◉ Which one of the following statements is true regarding
ratemaking in different types of insurance?
Choose one answer.
,A. Most losses from catastrophic events, such as hurricanes, are
included in ratemaking data in the affected states.
B. Trending of losses in fire insurance is generally restricted to claim
severity.
C. The experience period used for property causes of loss other than
fire is usually five years or less.
D. Applying loss development factors to data is critical when claims
settle quickly and loss reserves are relatively small. Answer: B.
Trending of losses in fire insurance is generally restricted to claim
severity.
◉ Which one of the following types of individual rating plans can be
used by medium to large insureds in combination with risk control
and allows the insured to manage its cash flow by avoiding upfront
payments?
Choose one answer.
A. Schedule rating plan
B. Large deductible plan
,C. Individual risk premium modification plan
D. Expense modification plan Answer: B. Large deductible plan
◉ An insurer must decide what provision for profit and
contingencies should be included in the rate and should consider the
overall desired rate of return, including likely returns from
investment income versus
Choose one answer.
A. Policyholder surplus.
B. Underwriting profit.
C. Loss reserve amounts.
D. Loss adjustment expenses. Answer: B. Underwriting profit.
◉ The amount included in the insurance rate to protect insurers
against the possibility that actual claims or expenses will exceed
projections is referred to as
Choose one answer.
, A. The prospective loss costs.
B. The expense factor.
C. The loading for profits and contingencies.
D. The claims and eventualities factor. Answer: C. The loading for
profits and contingencies.
◉ Underwriting pricing activities usually include all of the following,
EXCEPT:
Choose one answer.
A. Account classification
B. Rating
C. Application of premium modification plans
D. Forecasting Answer: D. Forecasting
