CPCU 410 - SPEAKING THE INSURANCE LANGUAGE
EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED
the 3 types of cooperative insurers
mutual
reciprocal
fraternal organizations
5 major goals of insurers
earn profit
meet customer needs
comply with legal requirements
diversify risk
fulfill duty to society
5 internal constraints to an insurer achieving its goals
inefficiency
lack of expertise
size
financial resources
lack of brand or damaged reputation
what causes inefficiency in insurers
,poor MGT
insufficient capital
outdated tech
inability to adapt
5 external constraints to an insurer achieving its goals
regulation
rating agencies
public opinion
competition
economic conditions
the 4 ways P&C insurers are generally classified
by legal form of ownership
by place of incorporation
by licensing status
by insurance distribution systems and channels
classification of insurers diagram
page 1.8
reciprocal insurance exchange
An insurer owned by its policyholders, formed as an unincorporated association for the
purpose of providing insurance coverage to its members (called subscribers), and
managed by an attorney-in-fact. Members agree to mutually insure each other, and they
share profits and losses in the same proportion as the amount of insurance purchased
from the exchange by that member.
,Fair Access to Insurance Requirements
provide property insurance to qualified property owner who are unable to obtain
coverage in the standard market
residual markets
similar to the FAIR plan, but for beachfront and windstorm insurance pools that provide
coverage for residents in storm prone areas who cant get coverage in the standard
markets
4 categories if insurtechs
page 1.12
admitted vs nonadmitted
admitted is licensed to do business in that state, nonadmitted is not, but can still do
business in that state in certain circumstances
what does underwriting expense include
acquisition expense
general expenses
taxes
fees
loss ratio is divided by ____ premium and expense ratio is divided by ____
premium
earned ; written - page 1.16
net operating income
after the insurer pays losses, expenses, taxes and sets asides reserves
the four types of losses insurers set reserves for
, reported
IBNR
losses that have been reported but established case reserves are inadequate
settled but reopened claims
investment income ratio
overall operating ratio
return on equity
page 1.17
what is the most complete measure of an insurers financial performance
overall operating ratio
6 factors to assess if an insurer is meeting customer needs
page 1.18
complaints and praise
customer satisfaction data
retention ratio and lapse ratio
insurer producer relationships
state insurance department stats
consumer reports
lapse ratio
the number of cancelled policies during a period fo time compared to the amount of
bound policies at the beginning of the period
what do state insurers monitor and oversee
EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED
the 3 types of cooperative insurers
mutual
reciprocal
fraternal organizations
5 major goals of insurers
earn profit
meet customer needs
comply with legal requirements
diversify risk
fulfill duty to society
5 internal constraints to an insurer achieving its goals
inefficiency
lack of expertise
size
financial resources
lack of brand or damaged reputation
what causes inefficiency in insurers
,poor MGT
insufficient capital
outdated tech
inability to adapt
5 external constraints to an insurer achieving its goals
regulation
rating agencies
public opinion
competition
economic conditions
the 4 ways P&C insurers are generally classified
by legal form of ownership
by place of incorporation
by licensing status
by insurance distribution systems and channels
classification of insurers diagram
page 1.8
reciprocal insurance exchange
An insurer owned by its policyholders, formed as an unincorporated association for the
purpose of providing insurance coverage to its members (called subscribers), and
managed by an attorney-in-fact. Members agree to mutually insure each other, and they
share profits and losses in the same proportion as the amount of insurance purchased
from the exchange by that member.
,Fair Access to Insurance Requirements
provide property insurance to qualified property owner who are unable to obtain
coverage in the standard market
residual markets
similar to the FAIR plan, but for beachfront and windstorm insurance pools that provide
coverage for residents in storm prone areas who cant get coverage in the standard
markets
4 categories if insurtechs
page 1.12
admitted vs nonadmitted
admitted is licensed to do business in that state, nonadmitted is not, but can still do
business in that state in certain circumstances
what does underwriting expense include
acquisition expense
general expenses
taxes
fees
loss ratio is divided by ____ premium and expense ratio is divided by ____
premium
earned ; written - page 1.16
net operating income
after the insurer pays losses, expenses, taxes and sets asides reserves
the four types of losses insurers set reserves for
, reported
IBNR
losses that have been reported but established case reserves are inadequate
settled but reopened claims
investment income ratio
overall operating ratio
return on equity
page 1.17
what is the most complete measure of an insurers financial performance
overall operating ratio
6 factors to assess if an insurer is meeting customer needs
page 1.18
complaints and praise
customer satisfaction data
retention ratio and lapse ratio
insurer producer relationships
state insurance department stats
consumer reports
lapse ratio
the number of cancelled policies during a period fo time compared to the amount of
bound policies at the beginning of the period
what do state insurers monitor and oversee
