AFSB 151 Chapter 7 Practice Exam Questions
Complete With A+ Graded Answers
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
Complete With A+ Graded Answers
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
