AFSB 151 Final Exam UPDATED ACTUAL Questions And Correct Answers
C
Terms in this set (180)
A surety bond is a written document in which one party Performance to a third party for the second party's failure to fulfill an obligation.
guarantees a second party's
Which one of the these groups, for the most part, serves Multiline property-casualty insurers
the market for fidelity and surety bonds in the United
States?
Sureties use what written document to authorize a A power of attorney
producer to act as the surety's agent in bond production?
While suretyship and banking both use a prequalification Suretyship guarantees performance as well as monetary obligations.
process to extend credit to their customers, suretyship is
different from bank credit in that
Because most bonds are "joint and several liability" The principal or the surety, or from both.
documents, the obligee can recover losses from
A financial guarantee differs from performance and The ability to pay money to meet the contractual obligation.
fidelity guarantees because it requires honesty, the ability
to perform the contract, and
A legal remedy that a surety can use against a defaulting Exoneration
bond principal, in which the surety exercises its right to
force the principal to perform by exhausting the
principal's resources instead of its own, is
In an unlimited cosurety arrangement, the obligee can The full loss from any of the cosureties up to the penal sum of the bond.
collect
, A bond that guarantees that faulty work will be corrected Maintenance bond
and defective materials will be replaced for a period of
one year or less and that is usually provided with a
performance bond at no additional cost is a
A contract bond that guarantees the local governmental Subdivision bond
authority that a principal will complete a development in
accordance with approved proposals and at the
principal's expense is a
This classification of license and permit bonds poses the Compliance-only bonds
least risk to the surety and guarantees that the principal
will conform with laws that govern the business or activity
it conducts.
Which bond classification is described?
Under a public official bond guaranteeing the honesty of He or she must account for the cash that he or she holds while in office.
a treasurer,
Bond losses occur when a fiduciary and its surety are An administrator
held accountable because the fiduciary did not exercise
reasonable care in notifying all heirs of an impending
probate proceeding. This fiduciary is called
A person who commences an action against another to A plaintiff bond
obtain an equitable remedy may be required to post a
bond before the court will proceed with the action. This
bond is called
The legally mandated hazardous waste facilities Can be posted only for hazardous waste facilities with permits, and it requires an
performance bond underwriting review of the closure plan.
The principal on a hazardous waste bond Is an owner or operator of a hazardous waste facility and is responsible for
closure and postclosure care of the facility.
In the next step of the bond prequalification process, The producer may facilitate underwriter interviews to help determine the
once the producer has compiled the contractor's contractor's experience in meeting past contractual obligations.
financial documents showing significant liquidity,
A contractor's percentage-of-completion estimates Are based on the contractor's ability to estimate the cost to complete the project
and recognize income and profit as they accrue during the project.
A $5 million/$20 million contract surety credit line means Bond single jobs up to a contract price of $5 million when the aggregate contract
that the surety is willing to backlog does not exceed $20 million.
Which one of the following statements is true regarding Participating in professional seminars and construction industry associations is an
surety producers' promotion? excellent way to communicate to a target audience.
C
Terms in this set (180)
A surety bond is a written document in which one party Performance to a third party for the second party's failure to fulfill an obligation.
guarantees a second party's
Which one of the these groups, for the most part, serves Multiline property-casualty insurers
the market for fidelity and surety bonds in the United
States?
Sureties use what written document to authorize a A power of attorney
producer to act as the surety's agent in bond production?
While suretyship and banking both use a prequalification Suretyship guarantees performance as well as monetary obligations.
process to extend credit to their customers, suretyship is
different from bank credit in that
Because most bonds are "joint and several liability" The principal or the surety, or from both.
documents, the obligee can recover losses from
A financial guarantee differs from performance and The ability to pay money to meet the contractual obligation.
fidelity guarantees because it requires honesty, the ability
to perform the contract, and
A legal remedy that a surety can use against a defaulting Exoneration
bond principal, in which the surety exercises its right to
force the principal to perform by exhausting the
principal's resources instead of its own, is
In an unlimited cosurety arrangement, the obligee can The full loss from any of the cosureties up to the penal sum of the bond.
collect
, A bond that guarantees that faulty work will be corrected Maintenance bond
and defective materials will be replaced for a period of
one year or less and that is usually provided with a
performance bond at no additional cost is a
A contract bond that guarantees the local governmental Subdivision bond
authority that a principal will complete a development in
accordance with approved proposals and at the
principal's expense is a
This classification of license and permit bonds poses the Compliance-only bonds
least risk to the surety and guarantees that the principal
will conform with laws that govern the business or activity
it conducts.
Which bond classification is described?
Under a public official bond guaranteeing the honesty of He or she must account for the cash that he or she holds while in office.
a treasurer,
Bond losses occur when a fiduciary and its surety are An administrator
held accountable because the fiduciary did not exercise
reasonable care in notifying all heirs of an impending
probate proceeding. This fiduciary is called
A person who commences an action against another to A plaintiff bond
obtain an equitable remedy may be required to post a
bond before the court will proceed with the action. This
bond is called
The legally mandated hazardous waste facilities Can be posted only for hazardous waste facilities with permits, and it requires an
performance bond underwriting review of the closure plan.
The principal on a hazardous waste bond Is an owner or operator of a hazardous waste facility and is responsible for
closure and postclosure care of the facility.
In the next step of the bond prequalification process, The producer may facilitate underwriter interviews to help determine the
once the producer has compiled the contractor's contractor's experience in meeting past contractual obligations.
financial documents showing significant liquidity,
A contractor's percentage-of-completion estimates Are based on the contractor's ability to estimate the cost to complete the project
and recognize income and profit as they accrue during the project.
A $5 million/$20 million contract surety credit line means Bond single jobs up to a contract price of $5 million when the aggregate contract
that the surety is willing to backlog does not exceed $20 million.
Which one of the following statements is true regarding Participating in professional seminars and construction industry associations is an
surety producers' promotion? excellent way to communicate to a target audience.
