AU 60 MISSED PRACTICE TEST
FINAL PAPER 2026 SOLVED
QUESTIONS VERIFIED ANSWERS
100 PERCENT CORRECT
◉ An underwriter receives a renewal application for a property quote
from his producer. The applicant has had a series of small losses in the
recent past. The underwriter is debating whether to reject the submission
or quote it with a property deductible of $5,000. During which one of the
following steps in the underwriting process is the underwriter involved?
Answer: Developing underwriting alternatives.
◉ An insurance company needs to hire an employee with knowledge of
insurance policy forms and the ability to relate policy provisions to the
loss exposures of individual policyholders. The person will also prepare
premium quotes and process cancellations. Which one of the following
employees would best suit the company's needs? Answer: Line
underwriter.
◉ Which one of the following is a financial measure of underwriting
performance? Answer: Combined ratio.
◉ Underwriting regulations seek to ensure correct classification of
insureds because: Answer: Misclassification can result in inadequate
premiums and drain an insurer's surplus.
, ◉ Specialty insurers such as those offering surety bonds, aviation
insurance, and livestock mortality insurance usually: Answer: Centralize
underwriting authority.
◉ Which one of the following financial ratios is key for evaluating
insurer solvency? Answer: Premium to surplus ratio.
◉ Which one of the following cases illustrates how underwriting
guidelines ensure uniformity and consistency? Answer: Chloe and Elin
are underwriting identical homeowners risks for Cromley Insurance
Company. The applicants have the same protection class, construction,
and coverage amount. After checking the underwriting guidelines, they
come to the same underwriting decision.
◉ The USA Patriot Act restricts United States firms, including those in
the insurance industry, from: Answer: Engaging in business with
persons and organizations on the Specifically Designated Nationals
(SDN) list.
◉ During a general market conduct examination of underwriting,
examiners would look for evidence of all of the following, EXCEPT:
Answer: Inconsistent claim practices.
◉ Which one of the following statements is correct with regard to
regulation and insurers' operations? Answer: Underwriting regulation
indirectly influences ratemaking and claim settlement.
FINAL PAPER 2026 SOLVED
QUESTIONS VERIFIED ANSWERS
100 PERCENT CORRECT
◉ An underwriter receives a renewal application for a property quote
from his producer. The applicant has had a series of small losses in the
recent past. The underwriter is debating whether to reject the submission
or quote it with a property deductible of $5,000. During which one of the
following steps in the underwriting process is the underwriter involved?
Answer: Developing underwriting alternatives.
◉ An insurance company needs to hire an employee with knowledge of
insurance policy forms and the ability to relate policy provisions to the
loss exposures of individual policyholders. The person will also prepare
premium quotes and process cancellations. Which one of the following
employees would best suit the company's needs? Answer: Line
underwriter.
◉ Which one of the following is a financial measure of underwriting
performance? Answer: Combined ratio.
◉ Underwriting regulations seek to ensure correct classification of
insureds because: Answer: Misclassification can result in inadequate
premiums and drain an insurer's surplus.
, ◉ Specialty insurers such as those offering surety bonds, aviation
insurance, and livestock mortality insurance usually: Answer: Centralize
underwriting authority.
◉ Which one of the following financial ratios is key for evaluating
insurer solvency? Answer: Premium to surplus ratio.
◉ Which one of the following cases illustrates how underwriting
guidelines ensure uniformity and consistency? Answer: Chloe and Elin
are underwriting identical homeowners risks for Cromley Insurance
Company. The applicants have the same protection class, construction,
and coverage amount. After checking the underwriting guidelines, they
come to the same underwriting decision.
◉ The USA Patriot Act restricts United States firms, including those in
the insurance industry, from: Answer: Engaging in business with
persons and organizations on the Specifically Designated Nationals
(SDN) list.
◉ During a general market conduct examination of underwriting,
examiners would look for evidence of all of the following, EXCEPT:
Answer: Inconsistent claim practices.
◉ Which one of the following statements is correct with regard to
regulation and insurers' operations? Answer: Underwriting regulation
indirectly influences ratemaking and claim settlement.
