AU 60 MISSED PRACTICE TEST EXAM
PRACTICE REVIEW 2026 TESTED QUESTIONS
ANSWERS
◉ As a commercial lines underwriter, William would spend many
hours reviewing and summarizing the loss runs that were part of a
new business application. He can now rely on a computer to
digitalize and summarize those loss runs. This is an example of how
underwriting has been transformed by which one of the following
advancements in technology? Answer: Machine learning
◉ Adam is an analyst conducting a market conduct examination at
DEF Insurance in response to a consumer complaint. During the
course of his review, he discovers that DEF has failed to apply newly
implemented underwriting and rating factors to renewals, failed to
use mutually exclusive underwriting guidelines for the company's
different programs, failed to use correct forms and rates, and failed
to apply underwriting guidelines consistently by occasionally
allowing producers exceptions. Which one of these practices will
Adam most likely allow the insurer to continue? Answer: Allowing
producers exceptions in some cases
◉ Which one of the following is the most common use of predictive
modeling in the underwriting of small commercial accounts?
Answer: Rating
,◉ An insurance company must have adequate policyholders' surplus
if it wishes to Answer: Increase its written premium volume.
◉ While developing goals for its book of business, an insurer's
corporate underwriter decides to increase its market share of
workers compensation insurance in the construction industry. This
type of underwriting activity is known as Answer: Formulating
underwriting policy.
◉ Which one of the following insurer employees would be best
qualified to answer an underwriter's technical questions about an
applicant's operations? Answer: Risk control representative
◉ Which one of the following insurer representatives is most likely
to meet with the insured, see their operations, and review their
financial operations on an annual basis? Answer: Premium auditor
◉ Which one of the following external sources of underwriting
information is more likely to be used by an underwriter in the
pricing phase, than in risk-selection decisions? Answer: Insurance
advisory organizations
◉ Underwriters should occasionally order a credit report after the
account has been accepted and a policy issued. A credit report may
,be used to indicate the existence of each of the following conditions,
EXCEPT: Answer: An account's propensity to report claims
◉ Which one of the following Dun & Bradstreet report scores shows
how promptly the company pays its bills relative to terms? Answer:
Paydex
◉ Which one of the following statements regarding motor vehicle
reports (MVRs) is true? Answer: They are particularly useful in
predicting an account's future losses.
◉ Which one of the following types of government records do
underwriters use as a source to predict future losses? Answer:
Motor vehicle reports
◉ Which one of the following is a major purpose of the statement of
cash flows? Answer: It is used to assess the ability to meet financial
obligations & It is used to assess an organization's need for
additional financing.
◉ Which one of the following statements is true regarding
additional insureds? Answer: Additional insured endorsements
restrict coverage to those claims arising out of the named insureds
operations.
, ◉ A building owner has hired a roofing contractor to replace the
roof of a building located on a busy urban street. The building owner
wants to be protected for any claims resulting from the roofing
contractor's work on his property. Which one of the following
methods would be most beneficial to the building owner? Answer: A
separate owners and contractors protective liability policy in the
name of the building owner
◉ An underwriter seeking to gain insight into the activities that
might be conducted by an applicant would use which one of the
following resources? Answer: North American Industry
Classification System
◉ Which one of the following types of rating plans is used most
commonly for workers compensation insurance? Answer:
Participating plan
◉ Which one the following statements is true regarding schedule
rating and individual risk premium modification plans? Answer:
Generally, those insureds that are eligible to use experience rating
are also eligible to use schedule rating.
◉ All of the following are objectives of rate regulation, EXCEPT:
Answer: Rates promote availability and affordability of insurance.
PRACTICE REVIEW 2026 TESTED QUESTIONS
ANSWERS
◉ As a commercial lines underwriter, William would spend many
hours reviewing and summarizing the loss runs that were part of a
new business application. He can now rely on a computer to
digitalize and summarize those loss runs. This is an example of how
underwriting has been transformed by which one of the following
advancements in technology? Answer: Machine learning
◉ Adam is an analyst conducting a market conduct examination at
DEF Insurance in response to a consumer complaint. During the
course of his review, he discovers that DEF has failed to apply newly
implemented underwriting and rating factors to renewals, failed to
use mutually exclusive underwriting guidelines for the company's
different programs, failed to use correct forms and rates, and failed
to apply underwriting guidelines consistently by occasionally
allowing producers exceptions. Which one of these practices will
Adam most likely allow the insurer to continue? Answer: Allowing
producers exceptions in some cases
◉ Which one of the following is the most common use of predictive
modeling in the underwriting of small commercial accounts?
Answer: Rating
,◉ An insurance company must have adequate policyholders' surplus
if it wishes to Answer: Increase its written premium volume.
◉ While developing goals for its book of business, an insurer's
corporate underwriter decides to increase its market share of
workers compensation insurance in the construction industry. This
type of underwriting activity is known as Answer: Formulating
underwriting policy.
◉ Which one of the following insurer employees would be best
qualified to answer an underwriter's technical questions about an
applicant's operations? Answer: Risk control representative
◉ Which one of the following insurer representatives is most likely
to meet with the insured, see their operations, and review their
financial operations on an annual basis? Answer: Premium auditor
◉ Which one of the following external sources of underwriting
information is more likely to be used by an underwriter in the
pricing phase, than in risk-selection decisions? Answer: Insurance
advisory organizations
◉ Underwriters should occasionally order a credit report after the
account has been accepted and a policy issued. A credit report may
,be used to indicate the existence of each of the following conditions,
EXCEPT: Answer: An account's propensity to report claims
◉ Which one of the following Dun & Bradstreet report scores shows
how promptly the company pays its bills relative to terms? Answer:
Paydex
◉ Which one of the following statements regarding motor vehicle
reports (MVRs) is true? Answer: They are particularly useful in
predicting an account's future losses.
◉ Which one of the following types of government records do
underwriters use as a source to predict future losses? Answer:
Motor vehicle reports
◉ Which one of the following is a major purpose of the statement of
cash flows? Answer: It is used to assess the ability to meet financial
obligations & It is used to assess an organization's need for
additional financing.
◉ Which one of the following statements is true regarding
additional insureds? Answer: Additional insured endorsements
restrict coverage to those claims arising out of the named insureds
operations.
, ◉ A building owner has hired a roofing contractor to replace the
roof of a building located on a busy urban street. The building owner
wants to be protected for any claims resulting from the roofing
contractor's work on his property. Which one of the following
methods would be most beneficial to the building owner? Answer: A
separate owners and contractors protective liability policy in the
name of the building owner
◉ An underwriter seeking to gain insight into the activities that
might be conducted by an applicant would use which one of the
following resources? Answer: North American Industry
Classification System
◉ Which one of the following types of rating plans is used most
commonly for workers compensation insurance? Answer:
Participating plan
◉ Which one the following statements is true regarding schedule
rating and individual risk premium modification plans? Answer:
Generally, those insureds that are eligible to use experience rating
are also eligible to use schedule rating.
◉ All of the following are objectives of rate regulation, EXCEPT:
Answer: Rates promote availability and affordability of insurance.
