CPCU 520 Simulated Exam Questions UPDATED ACTUAL Questions And
Correct Answers
C
Terms in this set (64)
Being an employee of the insurer While staff claims representatives may have a variety of titles, the role is typically
defined by two things: having a primary focus on claims and ______ ___ ___________ __ ___
________
Best Practices Adam manages a claims department for an insurer. He measures the department's
performance by best practices, claims audits, customer satisfaction data, and loss
ratio. Which one of Adam's measures refers to a system of identified internal
practices that claims representatives perform to produce superior performance?
Independent Adjusters An insurer that finds it economically impractical to establish a claims office in a
given state. Who are they likely to use to perform the claims handling function in
strategic locations?
Claimants, insureds, supervisors and others. A claims representative should have the ability to persuade or influence...?
Losses and LAE divided by earned premium. Rodrigo manages a claims department for an insurer and uses loss ratio as a
measure of the department's performance. Rodrigo calculates loss ratio as?
The State Insurance Department James is an experienced commercial insurance producer. Several policyholder
complaints have been filed recently accusing James of intentionally selling
unnecessary insurance and misrepresenting the nature of coverage to make a
sale. Who is responsible for investigating the policyholder complaints?
Where activities can be improved to reduce expenses Jose works for a property-casualty insurer that is pursuing a cost leadership
and improve efficiencies. strategy. Part of his responsibility is to study the value chain model to determine...?
D. Producer names WP Insurance is at Step 4 (Complying with regulatory requirements) in the
product development process for several new endorsements designed for
individuals who drive for transportation network companies. WP Insurance will
need to provide state regulators with all of the following, EXCEPT:
A. Rating plans
B. Underwriting guidelines
C. The new policy forms
D. Producer names
Accounting and finance Anna works in one of the support activities for a large property-casualty insurer.
The primary responsibilities of her department are to ensure that funds are
available to meet the insurer's financial responsibilities and to fairly and fully
disclose the financial position of the insurer. Anna works in which support
activities?
, Underwriting The _________ department of an insurance company is important as it manages
risk selection, evaluates applications, and decides on appropriate policy language
and pricing.
Increase its written premium volume. An insurance company must have adequate policyholders' surplus if it wishes
to...?
C. Support producers and insureds All of the following are underwriting activities typically performed by corporate
underwriters, EXCEPT:
A. Research the market
B. Formulate underwriting policy
C. Support producers and insureds
D. Conduct underwriting audits
Artificial Intelligence There has been an explosion in the amount of data that insurers can collect from
Internet of Things (IoT) and telematics devices. What can be used to quickly
analyze the vast amounts of data, and aid insurers with predicting and processing
claims, and detecting fraud?
D. Set it at $3,000, representing an estimate of what Jan Claim representative Jan is reviewing an auto liability claim concerning a two-car
expects to pay to settle the claim. collision that has just been assigned to her. She notes that the insured was clearly
100 percent at fault for the accident. No one was injured. The estimate for the
costs of the repair to claimant's car and a substitute auto for the week it will take
to perform the repairs is $3,000. Which one of the following best describes the
approach Jan should take in setting the case reserve?
A. Set it at zero dollars, because the claim is expected to resolve within a week.
B. Set it at a predetermined percentage above $3,000, in case the original
estimate is lower than the actual costs.
C. Set it at a predetermined percentage below $3,000, in the expectation that
some money can be saved on the claim.
D. Set it at $3,000, representing an estimate of what Jan expects to pay to settle
the claim.
Adverse selection. Sofie and the members of her homeowner association have homeowner policies
on their coastal dwellings. They have heard that there are eleven named
hurricanes predicted for their coastal area this year. Sofie and the homeowner
association members plan to increase their homeowner policy's property
coverage limits to handle their concern about the possible hurricane damage.
Their action is known as?
Drones Erik is a claims manager for Taunton Insurance. He is leading a team of property
claims representatives responding to a recent tornado in Kentucky. Before
sending the representatives into the field, Erik has decided to use Internet of
Things (IoT) technology to assess the damage and danger in the area. Which IoT
devices would Erik most likely use in this situation?
Correct Answers
C
Terms in this set (64)
Being an employee of the insurer While staff claims representatives may have a variety of titles, the role is typically
defined by two things: having a primary focus on claims and ______ ___ ___________ __ ___
________
Best Practices Adam manages a claims department for an insurer. He measures the department's
performance by best practices, claims audits, customer satisfaction data, and loss
ratio. Which one of Adam's measures refers to a system of identified internal
practices that claims representatives perform to produce superior performance?
Independent Adjusters An insurer that finds it economically impractical to establish a claims office in a
given state. Who are they likely to use to perform the claims handling function in
strategic locations?
Claimants, insureds, supervisors and others. A claims representative should have the ability to persuade or influence...?
Losses and LAE divided by earned premium. Rodrigo manages a claims department for an insurer and uses loss ratio as a
measure of the department's performance. Rodrigo calculates loss ratio as?
The State Insurance Department James is an experienced commercial insurance producer. Several policyholder
complaints have been filed recently accusing James of intentionally selling
unnecessary insurance and misrepresenting the nature of coverage to make a
sale. Who is responsible for investigating the policyholder complaints?
Where activities can be improved to reduce expenses Jose works for a property-casualty insurer that is pursuing a cost leadership
and improve efficiencies. strategy. Part of his responsibility is to study the value chain model to determine...?
D. Producer names WP Insurance is at Step 4 (Complying with regulatory requirements) in the
product development process for several new endorsements designed for
individuals who drive for transportation network companies. WP Insurance will
need to provide state regulators with all of the following, EXCEPT:
A. Rating plans
B. Underwriting guidelines
C. The new policy forms
D. Producer names
Accounting and finance Anna works in one of the support activities for a large property-casualty insurer.
The primary responsibilities of her department are to ensure that funds are
available to meet the insurer's financial responsibilities and to fairly and fully
disclose the financial position of the insurer. Anna works in which support
activities?
, Underwriting The _________ department of an insurance company is important as it manages
risk selection, evaluates applications, and decides on appropriate policy language
and pricing.
Increase its written premium volume. An insurance company must have adequate policyholders' surplus if it wishes
to...?
C. Support producers and insureds All of the following are underwriting activities typically performed by corporate
underwriters, EXCEPT:
A. Research the market
B. Formulate underwriting policy
C. Support producers and insureds
D. Conduct underwriting audits
Artificial Intelligence There has been an explosion in the amount of data that insurers can collect from
Internet of Things (IoT) and telematics devices. What can be used to quickly
analyze the vast amounts of data, and aid insurers with predicting and processing
claims, and detecting fraud?
D. Set it at $3,000, representing an estimate of what Jan Claim representative Jan is reviewing an auto liability claim concerning a two-car
expects to pay to settle the claim. collision that has just been assigned to her. She notes that the insured was clearly
100 percent at fault for the accident. No one was injured. The estimate for the
costs of the repair to claimant's car and a substitute auto for the week it will take
to perform the repairs is $3,000. Which one of the following best describes the
approach Jan should take in setting the case reserve?
A. Set it at zero dollars, because the claim is expected to resolve within a week.
B. Set it at a predetermined percentage above $3,000, in case the original
estimate is lower than the actual costs.
C. Set it at a predetermined percentage below $3,000, in the expectation that
some money can be saved on the claim.
D. Set it at $3,000, representing an estimate of what Jan expects to pay to settle
the claim.
Adverse selection. Sofie and the members of her homeowner association have homeowner policies
on their coastal dwellings. They have heard that there are eleven named
hurricanes predicted for their coastal area this year. Sofie and the homeowner
association members plan to increase their homeowner policy's property
coverage limits to handle their concern about the possible hurricane damage.
Their action is known as?
Drones Erik is a claims manager for Taunton Insurance. He is leading a team of property
claims representatives responding to a recent tornado in Kentucky. Before
sending the representatives into the field, Erik has decided to use Internet of
Things (IoT) technology to assess the damage and danger in the area. Which IoT
devices would Erik most likely use in this situation?
