CPCU 520 PRACTICE EXAM (ACTUAL 2025/2026) QUESTION AND
VERIFIED ACCURATE ANSWERS
Which one of the following statements is correct regarding the
interaction between risk control and other insurer functions?
Select one:
A. By making marginal accounts acceptable, risk control helps
the Claims Department settle losses.
B. Risk control personnel are responsible for answering any
complex questions that insureds have about premium audits.
C. Risk control representatives are responsible for compiling all
the information required for a premium audit.
D. Risk control personnel can assist underwriters in modifying a
new applicant's loss exposures to meet eligibility requirements.
- --Answers----D. Risk control personnel can assist
underwriters in modifying a new applicant's loss exposures to
meet eligibility requirements.
With respect to underwriting, it is an unfair trade practice to
Select one:
A. Unfairly discriminate when selecting loss exposures.
B. Misrepresent coverage in an application.
C. Rebate premium to a policyholder.
,D. Misappropriate claim funds. - --Answers----A. Unfairly
discriminate when selecting loss exposures.
The state advisory organization has developed a new
homeowners form which increases the personal property limits
for guns, silverware, jewelry, and boats. Jancy Insurance
Company is considering modifying the form for its own use.
Which one of the following members of Jancy's staff would be
involved in the research and development of this new form?
Select one:
A. Clara, the underwriting manager
B. Antonia, the accounting manager
C. Merve, the claims manager
D. Emma, the staff underwriter - --Answers----D. Emma, the
staff underwriter
The universal connectivity that allows people to interact with
devices and for those devices to meaningfully interact with each
other without human interaction is known as
Select one:
A. Cloud computing.
B. The blockchain.
C. The Internet of Things.
,D. Telematics. - --Answers----C. The Internet of Things.
With regard to insurer licensing, a foreign insurer is an insurer
Select one:
A. Licensed and operating in states other than its state of
domicile.
B. Domiciled outside of the U.S. and licensed to transact business
in the U.S.
C. Domiciled outside of the U.S. and operating as a nonadmitted
insurer.
D. Licensed in the U.S. and transacting business outside the U.S.
- --Answers----A. Licensed and operating in states other than
its state of domicile.
The purpose of an activity log is to
Select one:
A. Remind claim representatives to perform a particular task.
B. Log all activities of a claim representative for billing purposes.
C. Record all activities and analysis of a particular claim.
D. Document a manager's review of a claim representative's
performance. - --Answers----C. Record all activities and
analysis of a particular claim.
, Which one of the following statements is true concerning the
premium auditing process?
Select one:
A. A premium auditor's job involves not only counting loss
exposures, but also classifying them correctly.
B. The process the premium auditor uses is known as auditing
the policy because the focus is on the exposures identified on the
policy.
C. The definition of "employee" is the same for both workers
compensation and general liability policies when the premium
base is payroll.
D. An examination of the insured's books and records at the
insured's premises is referred to as a voluntary audit. - --
Answers----A. A premium auditor's job involves not only
counting loss exposures, but also classifying them correctly.
Which one of the following is a claim control used to help meet
regulatory compliance?
Select one:
A. Special damages
B. Annual Statements
C. Access security
VERIFIED ACCURATE ANSWERS
Which one of the following statements is correct regarding the
interaction between risk control and other insurer functions?
Select one:
A. By making marginal accounts acceptable, risk control helps
the Claims Department settle losses.
B. Risk control personnel are responsible for answering any
complex questions that insureds have about premium audits.
C. Risk control representatives are responsible for compiling all
the information required for a premium audit.
D. Risk control personnel can assist underwriters in modifying a
new applicant's loss exposures to meet eligibility requirements.
- --Answers----D. Risk control personnel can assist
underwriters in modifying a new applicant's loss exposures to
meet eligibility requirements.
With respect to underwriting, it is an unfair trade practice to
Select one:
A. Unfairly discriminate when selecting loss exposures.
B. Misrepresent coverage in an application.
C. Rebate premium to a policyholder.
,D. Misappropriate claim funds. - --Answers----A. Unfairly
discriminate when selecting loss exposures.
The state advisory organization has developed a new
homeowners form which increases the personal property limits
for guns, silverware, jewelry, and boats. Jancy Insurance
Company is considering modifying the form for its own use.
Which one of the following members of Jancy's staff would be
involved in the research and development of this new form?
Select one:
A. Clara, the underwriting manager
B. Antonia, the accounting manager
C. Merve, the claims manager
D. Emma, the staff underwriter - --Answers----D. Emma, the
staff underwriter
The universal connectivity that allows people to interact with
devices and for those devices to meaningfully interact with each
other without human interaction is known as
Select one:
A. Cloud computing.
B. The blockchain.
C. The Internet of Things.
,D. Telematics. - --Answers----C. The Internet of Things.
With regard to insurer licensing, a foreign insurer is an insurer
Select one:
A. Licensed and operating in states other than its state of
domicile.
B. Domiciled outside of the U.S. and licensed to transact business
in the U.S.
C. Domiciled outside of the U.S. and operating as a nonadmitted
insurer.
D. Licensed in the U.S. and transacting business outside the U.S.
- --Answers----A. Licensed and operating in states other than
its state of domicile.
The purpose of an activity log is to
Select one:
A. Remind claim representatives to perform a particular task.
B. Log all activities of a claim representative for billing purposes.
C. Record all activities and analysis of a particular claim.
D. Document a manager's review of a claim representative's
performance. - --Answers----C. Record all activities and
analysis of a particular claim.
, Which one of the following statements is true concerning the
premium auditing process?
Select one:
A. A premium auditor's job involves not only counting loss
exposures, but also classifying them correctly.
B. The process the premium auditor uses is known as auditing
the policy because the focus is on the exposures identified on the
policy.
C. The definition of "employee" is the same for both workers
compensation and general liability policies when the premium
base is payroll.
D. An examination of the insured's books and records at the
insured's premises is referred to as a voluntary audit. - --
Answers----A. A premium auditor's job involves not only
counting loss exposures, but also classifying them correctly.
Which one of the following is a claim control used to help meet
regulatory compliance?
Select one:
A. Special damages
B. Annual Statements
C. Access security
