Assignment 3 Practice Exam Questions
Field underwriting activities generally include which one of the following? - (correct Answer) - Providing
service to producers and policy holders
Financial reports are important in bond underwriting not only because they reveal an applicant's
financial condition, but also because they reflect which one of the following about the applicant? -
(correct Answer) - Overall management ability
An indemnity agreement does what to a surety's right arising from common law? - (correct Answer) -
Extends them
As a loss control practice concerning large public official bonds, a surety may ask for which of the
following to confirm that the governmental body has established an approved list of banks? - (correct
Answer) - Designation of depository
Which one of the following is the only entity or individual that can make a claim against a public official
bond? - (correct Answer) - The government body that requires the bond
Sally is the plaintiff in an court case. After losing her case in a lower court, she is appealing the
judgement to a higher court. As the plaintiff, she is required to obtain an appeal bond. An appeal bond
for the plaintiff's case guarantees the payment of which of the following? - (correct Answer) - Costs of
the appeal
Keith claimed that his brother Charlie had unlawfully taken possession of his car. Keith was required to
secure a bond in order to take the car back until the court rendered a decision. The bond guarantees that
the car will remain in the same condition and will not be sold or otherwise disposed of. Which one of the
following types of bond was Keith require to obtain? - (correct Answer) - Replevin bond
Which one of the following types of bonds are the most hazardous license and permit bonds that
sureties write? - (correct Answer) - Reclamation and environmental protection bonds
Thomas is underwriting a fidelity bond application for a new firm that is not profitable due to high
capitalization expenses. At the very least, Thomas should verify which one of the following? - (correct
Answer) - That the firm's founders have meaningful, sufficient experience in related work
Which one of the following special characteristics of fidelity bonds is described by the following
statement: The nature of the employment relationship provides the employees an opportunity to learn
the firm's routines; schedules; and the existence, absence, or relative effectiveness of management
controls. - (correct Answer) - Property exposed to loss is accessible
Deborah recently accepted a position as a home office underwriter for Jackson Insurance Company.
Home office underwriting activities generally include which one of the following? - (correct Answer) -
Formulating underwriting policy
Gina is a surety bond underwriter for Southern Surety. When evaluation an applicant/principal for a
surety bond, she considers both subjective and objective factors. Which one of the following is an
important subjective factor for Gina to consider? - (correct Answer) - Character
Field underwriting activities generally include which one of the following? - (correct Answer) - Providing
service to producers and policy holders
Financial reports are important in bond underwriting not only because they reveal an applicant's
financial condition, but also because they reflect which one of the following about the applicant? -
(correct Answer) - Overall management ability
An indemnity agreement does what to a surety's right arising from common law? - (correct Answer) -
Extends them
As a loss control practice concerning large public official bonds, a surety may ask for which of the
following to confirm that the governmental body has established an approved list of banks? - (correct
Answer) - Designation of depository
Which one of the following is the only entity or individual that can make a claim against a public official
bond? - (correct Answer) - The government body that requires the bond
Sally is the plaintiff in an court case. After losing her case in a lower court, she is appealing the
judgement to a higher court. As the plaintiff, she is required to obtain an appeal bond. An appeal bond
for the plaintiff's case guarantees the payment of which of the following? - (correct Answer) - Costs of
the appeal
Keith claimed that his brother Charlie had unlawfully taken possession of his car. Keith was required to
secure a bond in order to take the car back until the court rendered a decision. The bond guarantees that
the car will remain in the same condition and will not be sold or otherwise disposed of. Which one of the
following types of bond was Keith require to obtain? - (correct Answer) - Replevin bond
Which one of the following types of bonds are the most hazardous license and permit bonds that
sureties write? - (correct Answer) - Reclamation and environmental protection bonds
Thomas is underwriting a fidelity bond application for a new firm that is not profitable due to high
capitalization expenses. At the very least, Thomas should verify which one of the following? - (correct
Answer) - That the firm's founders have meaningful, sufficient experience in related work
Which one of the following special characteristics of fidelity bonds is described by the following
statement: The nature of the employment relationship provides the employees an opportunity to learn
the firm's routines; schedules; and the existence, absence, or relative effectiveness of management
controls. - (correct Answer) - Property exposed to loss is accessible
Deborah recently accepted a position as a home office underwriter for Jackson Insurance Company.
Home office underwriting activities generally include which one of the following? - (correct Answer) -
Formulating underwriting policy
Gina is a surety bond underwriter for Southern Surety. When evaluation an applicant/principal for a
surety bond, she considers both subjective and objective factors. Which one of the following is an
important subjective factor for Gina to consider? - (correct Answer) - Character
