AU60 Latest 2025 Questions & Answers
To achieve profitability, the underwriting function serves which one of the following
additional purposes?
C. Guarding against adverse selection
Which one of the following will draft a manuscript policy or endorsement that is worded to
address the specific needs of the insured
Line underwriter
Depending on the type of insurance, insurers use automated underwriting systems to
Encode underwriting guidelines.
Specialty insurers such as those offering surety bonds, aviation insurance, and livestock
mortality insurance usually
Centralize underwriting authority.
All of the following statements are true regarding the factors affecting the formation of an
insurer's underwriting policy, EXCEPT:
The higher an insurer's premium-to-surplus ratio, the greater its ability to expand premium
writings.v
Argot Stock Insurance Company's (Argot) net income is $1,000,000 and its average owners'
equity is $16,500,000. Argot's average policyholders' surplus is $20,000,000. Using the GAAP
approach, which one of the following is Argot's return on equity?
Argot's return on equity using the GAAP approach is 6 percent, determined by net income
($1,000,000) divided by average owners' equity ($16,500,000).
Which one of the following is determined by a company's underwriting policy?
Composition of the insurer's book of business
, A rating plan available to commercial insurance applicants that awards debits and credits to a
submission based on specific categories is known as a(n)
Schedule rating plan.
An underwriter is working with a loss control representative on a new opportunity. Given the
complexity of the exposures, a physical survey is conducted by the loss control
representative, and a formal report is prepared. The report reveals that the insured owns
several unattended properties, and that they were unlocked when the loss control
representative conducted the survey. This failure to properly secure an unattended building
would be an indicator to the underwriter of which one of the following types of hazard?
Morale
Which one of the following is a financial measure of underwriting performance?
Combined ratio
Which one of the following statements is correct regarding nonfinancial measures of
underwriting results?
Selection standards for underwriters usually support overall underwriting goals and are
evaluated during audits.
Which one of the following statements is correct with respect to market conduct
examinations?
They protect both insurers and consumers from unfair insurer practices.
Emma is a workers compensation underwriter. She has been advised that one of her insureds
is expanding its operations, and she is not sure how to classify the new payroll. Which one of
the following of her fellow employees should Emma go to for help?
Premium auditor
Wrap-ups do not usually include which one of the following coverages?
Auto
To achieve profitability, the underwriting function serves which one of the following
additional purposes?
C. Guarding against adverse selection
Which one of the following will draft a manuscript policy or endorsement that is worded to
address the specific needs of the insured
Line underwriter
Depending on the type of insurance, insurers use automated underwriting systems to
Encode underwriting guidelines.
Specialty insurers such as those offering surety bonds, aviation insurance, and livestock
mortality insurance usually
Centralize underwriting authority.
All of the following statements are true regarding the factors affecting the formation of an
insurer's underwriting policy, EXCEPT:
The higher an insurer's premium-to-surplus ratio, the greater its ability to expand premium
writings.v
Argot Stock Insurance Company's (Argot) net income is $1,000,000 and its average owners'
equity is $16,500,000. Argot's average policyholders' surplus is $20,000,000. Using the GAAP
approach, which one of the following is Argot's return on equity?
Argot's return on equity using the GAAP approach is 6 percent, determined by net income
($1,000,000) divided by average owners' equity ($16,500,000).
Which one of the following is determined by a company's underwriting policy?
Composition of the insurer's book of business
, A rating plan available to commercial insurance applicants that awards debits and credits to a
submission based on specific categories is known as a(n)
Schedule rating plan.
An underwriter is working with a loss control representative on a new opportunity. Given the
complexity of the exposures, a physical survey is conducted by the loss control
representative, and a formal report is prepared. The report reveals that the insured owns
several unattended properties, and that they were unlocked when the loss control
representative conducted the survey. This failure to properly secure an unattended building
would be an indicator to the underwriter of which one of the following types of hazard?
Morale
Which one of the following is a financial measure of underwriting performance?
Combined ratio
Which one of the following statements is correct regarding nonfinancial measures of
underwriting results?
Selection standards for underwriters usually support overall underwriting goals and are
evaluated during audits.
Which one of the following statements is correct with respect to market conduct
examinations?
They protect both insurers and consumers from unfair insurer practices.
Emma is a workers compensation underwriter. She has been advised that one of her insureds
is expanding its operations, and she is not sure how to classify the new payroll. Which one of
the following of her fellow employees should Emma go to for help?
Premium auditor
Wrap-ups do not usually include which one of the following coverages?
Auto
