CPCU 520 Final Exam with correct answers
What is the formula for the GAAP method for determining return on equity - correct answer-Net
Income / Average Owners Equity
State insurance departments enforce insurance laws enacted by the - correct answer-state legislature
What are the underwriting profitability functions of an insurer? - correct answer-guarding against
adverse selection, ensuring adequate policyholders' surplus, and enforcing underwriting guidelines.
what is the co-participation provision of a primary insurer in it's reinsurance program - correct answer-a
provision in a reinsurance agreement that requires the primary insurer to retain a specified percentage
of the losses that exceed its attachment point
Generally the largest liability on the insurer's balance sheet and a significant part of an insurer's financial
condition are the - correct answer-Loss reserves for future claim payments.
What are the steps in the claims handling process? - correct answer-acknowledging and assigning the
claim, identifying the policy and setting reserves, contacting the insured or the insured's representative,
investigating and documenting the claim, determining the cause of loss, liability, and the loss amount.
What is affinity marketing - correct answer-group marketing that targets various groups based on
profession, association, interests, hobbies, and attitudes.
Computer processing or output that simulates human reasoning or knowledge is referred to as - correct
answer-artificial intelligence
A commercial insurer has historically targeted small businesses. It is considering expanding its market to
middle market organizations. To succeed, the insurer will need to develop a level of expertise in which
one of the following areas? - correct answer-Risk financing alternatives
What is the formula for the GAAP method for determining return on equity - correct answer-Net
Income / Average Owners Equity
State insurance departments enforce insurance laws enacted by the - correct answer-state legislature
What are the underwriting profitability functions of an insurer? - correct answer-guarding against
adverse selection, ensuring adequate policyholders' surplus, and enforcing underwriting guidelines.
what is the co-participation provision of a primary insurer in it's reinsurance program - correct answer-a
provision in a reinsurance agreement that requires the primary insurer to retain a specified percentage
of the losses that exceed its attachment point
Generally the largest liability on the insurer's balance sheet and a significant part of an insurer's financial
condition are the - correct answer-Loss reserves for future claim payments.
What are the steps in the claims handling process? - correct answer-acknowledging and assigning the
claim, identifying the policy and setting reserves, contacting the insured or the insured's representative,
investigating and documenting the claim, determining the cause of loss, liability, and the loss amount.
What is affinity marketing - correct answer-group marketing that targets various groups based on
profession, association, interests, hobbies, and attitudes.
Computer processing or output that simulates human reasoning or knowledge is referred to as - correct
answer-artificial intelligence
A commercial insurer has historically targeted small businesses. It is considering expanding its market to
middle market organizations. To succeed, the insurer will need to develop a level of expertise in which
one of the following areas? - correct answer-Risk financing alternatives
