AFSB 151 Chapter 7 Practice Exam Questions (Answered)
2023
Which one of the following statements regarding fidelity bond claims is true?
By promptly investigating a bond loss, an insurer may discover that it has recourse
against persons or entities whose conduct caused or contributed to the loss, but is not
relevant to the proof of loss
In proper handling of a fidelity loss, when can an insurer begin the loss
investigation and when can claims personnel confront the insured?
The insurer can begin the investigation, but claims personnel should not confront the
insured before the insured has provided an executed proof of loss
Which one of the following statements regarding gathering information for surety
claims is true?
Claims personnel can gather most of the needed information for a surety claim by
applying the questions of who, what, when, where, why, and how to the claim
Which one of the following statements regarding surety compliance with statutes
and regulations is true?
Surety and fidelity contracts are often prescribed by statute or regulation, including
requirements for many license and permit bonds, fidelity coverages, and public official
bonds
Which one of the following statements is true regarding options available to
surety claims personnel after a contract default occurs and the principal admits
to it?
The surety can demand that the principal and indemnitors execute mortgages and
securities in the surety's favor and place them in a trust for any losses or expenses it
sustains
Reinsurers and cosureties
Require reports from the primary surety that a claim has arisen and that reserves, if any,
have been established
Which one of the following is true regarding contract bond claims?
Issues in a contract bond claim include payment to subcontractors and suppliers as well
as the ultimate completion of the construction project
Contract bond claims
Can raise questions as to fault in the loss, whether the bonded principal or the obligee
was responsible
Which one of the following statements regarding legal research and unfair claims
practices acts is true
Unfair claims practices acts prohibit sureties and insurers from misrepresenting
pertinent facts or policy provisions relating to coverages at issue
Which one of the following statements is true regarding subrogation when a
contract default has occurred and when the principal has admitted to it?
The surety's most important right acquired through subrogation is the right of the obligee
to use the contract consideration to complete the contract
Cosureties on bond
2023
Which one of the following statements regarding fidelity bond claims is true?
By promptly investigating a bond loss, an insurer may discover that it has recourse
against persons or entities whose conduct caused or contributed to the loss, but is not
relevant to the proof of loss
In proper handling of a fidelity loss, when can an insurer begin the loss
investigation and when can claims personnel confront the insured?
The insurer can begin the investigation, but claims personnel should not confront the
insured before the insured has provided an executed proof of loss
Which one of the following statements regarding gathering information for surety
claims is true?
Claims personnel can gather most of the needed information for a surety claim by
applying the questions of who, what, when, where, why, and how to the claim
Which one of the following statements regarding surety compliance with statutes
and regulations is true?
Surety and fidelity contracts are often prescribed by statute or regulation, including
requirements for many license and permit bonds, fidelity coverages, and public official
bonds
Which one of the following statements is true regarding options available to
surety claims personnel after a contract default occurs and the principal admits
to it?
The surety can demand that the principal and indemnitors execute mortgages and
securities in the surety's favor and place them in a trust for any losses or expenses it
sustains
Reinsurers and cosureties
Require reports from the primary surety that a claim has arisen and that reserves, if any,
have been established
Which one of the following is true regarding contract bond claims?
Issues in a contract bond claim include payment to subcontractors and suppliers as well
as the ultimate completion of the construction project
Contract bond claims
Can raise questions as to fault in the loss, whether the bonded principal or the obligee
was responsible
Which one of the following statements regarding legal research and unfair claims
practices acts is true
Unfair claims practices acts prohibit sureties and insurers from misrepresenting
pertinent facts or policy provisions relating to coverages at issue
Which one of the following statements is true regarding subrogation when a
contract default has occurred and when the principal has admitted to it?
The surety's most important right acquired through subrogation is the right of the obligee
to use the contract consideration to complete the contract
Cosureties on bond
