7/13/25, 11:55
AM
CPCU 520 EXAM QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS VERIFIED LATEST
UPDATE GRADED A++ 2025/2026
Terms in this set (278)
Chapter 1
Proprietary insurers Insurer formed for the purpose of earning a
profit for its owners.
Mutual insurer An insurer owned by its
policyholders and incorporated to
provide insurance for them.
Insurer owned by policyholders,
Reciprocal formed as unincorporated
Insurance Exchange association to provide insurance to
(interinsurance members (called subscribers), and
exchange) managed by an attorney-in-fact.
Members agree to mutually insure
each other, with profits and losses
shared in proportion to amount of
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23
,7/13/25, 11:55
AM
insurance purchased from the
exchange by that owner.
Fair Access to An insurance pool through which
Insurance private insurers collectively address
Requirements an unmet need for property
(FAIR) plans insurance on urban properties,
especially those susceptible to loss
by riot or civil commotion.
The term referring collectively to insurers
Residual Market and other organizations that make
insurance available through a shared
risk mechanism to those who cannot
obtain coverage in the admitted
market.
A person or firm that places business
Surplus lines broker with insurers not licensed
(nonadmitted) in the state in which
the transaction occurs but that is
permitted to write insurance because
coverage is not available through
standard market insurers.
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23
, 7/13/25, 11:55
AM
Independent An insurance marketing system
agency and under which producers (agents or
brokerage brokers) who are independent
marketing system contractors, sell insurance, usually
as representatives of several
unrelated insurers.
Direct writer An insurance marketing system that
marketing system uses sales agents (or sales
representatives) who are direct
employees of the insurer.
Exclusive marketing An insurance marketing system
system under which agents contract to sell
insurance exclusively for one
insurer (or for an associated
group of insurers).
Distribution The channel used by the producer of
channel a product or service to transfer that
product or service to the ultimate
customer.
Probable maximum The largest loss that an insured is likely to
loss (PML) sustain.
Underwriting The process of selecting insureds,
pricing coverage, determining
3/
23
AM
CPCU 520 EXAM QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS VERIFIED LATEST
UPDATE GRADED A++ 2025/2026
Terms in this set (278)
Chapter 1
Proprietary insurers Insurer formed for the purpose of earning a
profit for its owners.
Mutual insurer An insurer owned by its
policyholders and incorporated to
provide insurance for them.
Insurer owned by policyholders,
Reciprocal formed as unincorporated
Insurance Exchange association to provide insurance to
(interinsurance members (called subscribers), and
exchange) managed by an attorney-in-fact.
Members agree to mutually insure
each other, with profits and losses
shared in proportion to amount of
1/
23
,7/13/25, 11:55
AM
insurance purchased from the
exchange by that owner.
Fair Access to An insurance pool through which
Insurance private insurers collectively address
Requirements an unmet need for property
(FAIR) plans insurance on urban properties,
especially those susceptible to loss
by riot or civil commotion.
The term referring collectively to insurers
Residual Market and other organizations that make
insurance available through a shared
risk mechanism to those who cannot
obtain coverage in the admitted
market.
A person or firm that places business
Surplus lines broker with insurers not licensed
(nonadmitted) in the state in which
the transaction occurs but that is
permitted to write insurance because
coverage is not available through
standard market insurers.
2/
23
, 7/13/25, 11:55
AM
Independent An insurance marketing system
agency and under which producers (agents or
brokerage brokers) who are independent
marketing system contractors, sell insurance, usually
as representatives of several
unrelated insurers.
Direct writer An insurance marketing system that
marketing system uses sales agents (or sales
representatives) who are direct
employees of the insurer.
Exclusive marketing An insurance marketing system
system under which agents contract to sell
insurance exclusively for one
insurer (or for an associated
group of insurers).
Distribution The channel used by the producer of
channel a product or service to transfer that
product or service to the ultimate
customer.
Probable maximum The largest loss that an insured is likely to
loss (PML) sustain.
Underwriting The process of selecting insureds,
pricing coverage, determining
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23
