CIC Insurance Company Operations Study Guide
Latest Update 2024-2025 Actual Exam from
Credible Source with 400 Questions and 100%
Verified Detailed Correct Answers Guaranteed
A+ Approved by Professor
____________ are filed at the end of each calendar year by insurance companies with
their state of domicile - CORRECT ANSWER: yellow books
____________ fraud occurs when the insured or claimant exaggerates an otherwise
________________________ claim - CORRECT ANSWER: Soft, legitimate
_____________ fraud occurs when an insured or claimant deliberately plans or create a
loss that is ______________ by an insurance policy in order to receive
___________________ - CORRECT ANSWER: hard, covered, payment
_______________ is simply aggregating all of the premiums for a specific line of
business - CORRECT ANSWER: pooling
_______________________ allow policies to be delivered electronically - CORRECT
ANSWER: certain regulators may not
________________________________ personnel perform risk assessments and
underwriting surveys that enhance underwriting process - CORRECT ANSWER: loss
control
"upload/ download" - CORRECT ANSWER: provides direct transfer of submission data
from an agency mgmt system into a carriers system. this data is captured in the carrier's
policy management system and the resulting output is downloaded electronically back
into the agent's system
,2 key responsibilities of an actuary in an insurance company - CORRECT ANSWER:
ratemaking, reserving
3 environments that a carrier needs to address in its strategic thinking - CORRECT
ANSWER: regulatory, judicial, business
3 examples of documents that would be collected, stored, and managed as part of the
claims process - CORRECT ANSWER: 1. emails
2. letters
3. notes from phone calls
3 levels of technology - CORRECT ANSWER: 1. production support
2. maintenance
3. development/ investment
3 primary obligations of every member of a company board of directors - CORRECT
ANSWER: duty to care, duty to loyalty, duty of obedience
3 pros and cons of proprietary forms - CORRECT ANSWER: pros: market advantage,
greater flexibility, ease of modifications
cons: time consuming, lack of historical performance data, judicial interpretation issues
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: available personnel -
CORRECT ANSWER: yes
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: available physical
facilities - CORRECT ANSWER: yes
,a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: nearby restaurants -
CORRECT ANSWER: no
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: public transportation
- CORRECT ANSWER: no
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: technology
infrastructure - CORRECT ANSWER: yes
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: temperate climate -
CORRECT ANSWER: no
A tactical plan answers how the strategic plan will achieved name three factors that
affect the decisions on the type of products developed by the product development
department - CORRECT ANSWER: regulatory compliance, understand judicial
environment, risk appetite
according to NAIC the public wants what two things from regulators - CORRECT
ANSWER: solvent insurers who are financially able to make good on the promises they
have made and fair treatment of policyholders and claimants
according to tactical plan, the underwriting department has identified a need for new
product support and entrance into a new market that is prone to wildfires. what kind of
reinsurance would you need and why - CORRECT ANSWER: excess of loss
reinsurance: used for catastrophe exposures: catastrophic events can cause
devastating losses for an insurance company. these losses can result in decreased
earning and even possibly insolvency. reinsurance can be purchased to alleviate the
potential consequences of hurricanes, earthquakes, tornadoes, and wildfires
actuarial review - CORRECT ANSWER: must be done annually
used to certify company's case and IBNR reserves as part of regulatory reporting
, company can monitor its case and ibnr reserves monthly, qtrly, semi annually as it
chooses
done by company actuary or outside actuary annually
actuarial services - CORRECT ANSWER: insurance actuary is highly skilled
mathematician who computes risk, rates, and reserves according to probabilities based
on statistical data and addresses measurement and mgmt of risk
determine adequacy of loss reserves, allocate expenses, compile stats for external
state regulatory officials
agile approach to building technology - CORRECT ANSWER: replaces the large upfront
investment and long delivery timelines with a more iterative approach; project is divided
into smaller portions and work is done in short time frames called sprints which are
usually less than a month; by delivering smaller components and recalibrating with the
users regularly, the risk and pitfalls of waterfall approach are reduced
ALAE - CORRECT ANSWER: Adjusting expenses assigned to a particular claim
ALAE - CORRECT ANSWER: Expenses that are directly assigned to or arise from a
particular claim (expenses go into the claim reserve) ex court fees outside court council
Allocated Loss Adjustment Expense (ALAE) - CORRECT ANSWER: expenses that are
directly associated with an individual claim
Alpha Insurance serves a large clientele of commercial farmers. The company is moving
to an agriculture state to be closer to clients and which has no state taxes and offers tax
incentives. It also has a favorable regulatory and judicial system. When choosing a city
in that state for main office, what are some other considerations the company might
need to make? - CORRECT ANSWER: Cost of living, availability of resources, future
expansion flexibility
Latest Update 2024-2025 Actual Exam from
Credible Source with 400 Questions and 100%
Verified Detailed Correct Answers Guaranteed
A+ Approved by Professor
____________ are filed at the end of each calendar year by insurance companies with
their state of domicile - CORRECT ANSWER: yellow books
____________ fraud occurs when the insured or claimant exaggerates an otherwise
________________________ claim - CORRECT ANSWER: Soft, legitimate
_____________ fraud occurs when an insured or claimant deliberately plans or create a
loss that is ______________ by an insurance policy in order to receive
___________________ - CORRECT ANSWER: hard, covered, payment
_______________ is simply aggregating all of the premiums for a specific line of
business - CORRECT ANSWER: pooling
_______________________ allow policies to be delivered electronically - CORRECT
ANSWER: certain regulators may not
________________________________ personnel perform risk assessments and
underwriting surveys that enhance underwriting process - CORRECT ANSWER: loss
control
"upload/ download" - CORRECT ANSWER: provides direct transfer of submission data
from an agency mgmt system into a carriers system. this data is captured in the carrier's
policy management system and the resulting output is downloaded electronically back
into the agent's system
,2 key responsibilities of an actuary in an insurance company - CORRECT ANSWER:
ratemaking, reserving
3 environments that a carrier needs to address in its strategic thinking - CORRECT
ANSWER: regulatory, judicial, business
3 examples of documents that would be collected, stored, and managed as part of the
claims process - CORRECT ANSWER: 1. emails
2. letters
3. notes from phone calls
3 levels of technology - CORRECT ANSWER: 1. production support
2. maintenance
3. development/ investment
3 primary obligations of every member of a company board of directors - CORRECT
ANSWER: duty to care, duty to loyalty, duty of obedience
3 pros and cons of proprietary forms - CORRECT ANSWER: pros: market advantage,
greater flexibility, ease of modifications
cons: time consuming, lack of historical performance data, judicial interpretation issues
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: available personnel -
CORRECT ANSWER: yes
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: available physical
facilities - CORRECT ANSWER: yes
,a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: nearby restaurants -
CORRECT ANSWER: no
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: public transportation
- CORRECT ANSWER: no
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: technology
infrastructure - CORRECT ANSWER: yes
a carrier needs to assess available resources when deciding on a location in which to
operate. indicate yes or no if it is a resource necessary to operate: temperate climate -
CORRECT ANSWER: no
A tactical plan answers how the strategic plan will achieved name three factors that
affect the decisions on the type of products developed by the product development
department - CORRECT ANSWER: regulatory compliance, understand judicial
environment, risk appetite
according to NAIC the public wants what two things from regulators - CORRECT
ANSWER: solvent insurers who are financially able to make good on the promises they
have made and fair treatment of policyholders and claimants
according to tactical plan, the underwriting department has identified a need for new
product support and entrance into a new market that is prone to wildfires. what kind of
reinsurance would you need and why - CORRECT ANSWER: excess of loss
reinsurance: used for catastrophe exposures: catastrophic events can cause
devastating losses for an insurance company. these losses can result in decreased
earning and even possibly insolvency. reinsurance can be purchased to alleviate the
potential consequences of hurricanes, earthquakes, tornadoes, and wildfires
actuarial review - CORRECT ANSWER: must be done annually
used to certify company's case and IBNR reserves as part of regulatory reporting
, company can monitor its case and ibnr reserves monthly, qtrly, semi annually as it
chooses
done by company actuary or outside actuary annually
actuarial services - CORRECT ANSWER: insurance actuary is highly skilled
mathematician who computes risk, rates, and reserves according to probabilities based
on statistical data and addresses measurement and mgmt of risk
determine adequacy of loss reserves, allocate expenses, compile stats for external
state regulatory officials
agile approach to building technology - CORRECT ANSWER: replaces the large upfront
investment and long delivery timelines with a more iterative approach; project is divided
into smaller portions and work is done in short time frames called sprints which are
usually less than a month; by delivering smaller components and recalibrating with the
users regularly, the risk and pitfalls of waterfall approach are reduced
ALAE - CORRECT ANSWER: Adjusting expenses assigned to a particular claim
ALAE - CORRECT ANSWER: Expenses that are directly assigned to or arise from a
particular claim (expenses go into the claim reserve) ex court fees outside court council
Allocated Loss Adjustment Expense (ALAE) - CORRECT ANSWER: expenses that are
directly associated with an individual claim
Alpha Insurance serves a large clientele of commercial farmers. The company is moving
to an agriculture state to be closer to clients and which has no state taxes and offers tax
incentives. It also has a favorable regulatory and judicial system. When choosing a city
in that state for main office, what are some other considerations the company might
need to make? - CORRECT ANSWER: Cost of living, availability of resources, future
expansion flexibility
