AU 60 - ASSIGNMENT 3 -
UNDERWRITING INFORMATION
QUESTIONS & ANSWERS 100%
SOLVED
information efficiency - ANSWERThe balance that underwriters must maintain
between the hazards presented by the account and the information needed to
underwrite it.
Essential Information - ANSWERIt is helpful for underwriters to make a distinction
between information that is essential to their decisions and information that is not.
Underwriters use these categories intuitively or consciously when determining
whether the additional information should be obtained:
____—information that is absolutely necessary to arrive at the decision
Desirable Information - ANSWERIt is helpful for underwriters to make a distinction
between information that is essential to their decisions and information that is not.
Underwriters use these categories intuitively or consciously when determining
whether the additional information should be obtained:
Actual cash value (ACV) - ANSWERCost to replace property with new property of
like kind and quality less depreciation.
Replacement cost - ANSWERThe cost to repair or replace property using new
materials of like kind and quality with no deduction for depreciation.
Loss frequency - ANSWERThe number of losses that occur within a specified period.
Loss severity - ANSWERThe amount of loss, typically measured in dollars, for a loss
that has occurred.
Rating manuals - ANSWER____ are the primary source of information used by
underwriters to classify and rate accounts properly and identify attributes that make a
difference in the price charged the insured.
____—information that is not absolutely necessary but would be helpful in evaluating
the account if the information can be obtained at an acceptable cost and without any
undue delay
Available Information - ANSWERIt is helpful for underwriters to make a distinction
between information that is essential to their decisions and information that is not.
, Underwriters use these categories intuitively or consciously when determining
whether the additional information should be obtained:
____—information that may or may not be helpful and is not worth making any
special effort to obtain
D. Information that is not absolutely necessary but would be helpful in evaluating the
account - ANSWERWhich one of the following accurately describes information
underwriters would categorize as desirable when evaluating the need for additional
information?
A. Information that is absolutely necessary to arrive at the decision
B. Information that may or may not be helpful
C. Information that is not worth making any special effort to obtain
D. Information that is not absolutely necessary but would be helpful in evaluating the
account
C. Building construction - ANSWERAn underwriter has been asked to review a
commercial package application for a four-story apartment building. Which one of the
following pieces of information would the underwriter consider essential?
A. Loss history
B. Payment history
C. Building construction
D. Physical inspection
B. Internet - ANSWERWhich one of the following is a good source of low-cost
available information for underwriters?
A. Current policy
B. Internet
C. Application
D. Physical inspection
D. Insurer's underwriting guidelines - ANSWERVincent has been a commercial lines
underwriter for less than one year. He has received a new business application for
Mellfor Manufacturing (Mellfor). Vincent is not familiar with the manufacturing
process used by Mellfor and would like to order a physical inspection. Which one of
the following would provide direction to Vincent on the use of resources for a
physical inspection?
A. Best's Underwriting Guide
B. Predictive analytics
C. Mellfor's Web site
D. Insurer's underwriting guidelines
C. How the value of the information to underwriting decisions must be weighed
relative to its expense and its timeliness. - ANSWERInformation efficiency refers to
A. How quickly an underwriter can obtain missing information.
UNDERWRITING INFORMATION
QUESTIONS & ANSWERS 100%
SOLVED
information efficiency - ANSWERThe balance that underwriters must maintain
between the hazards presented by the account and the information needed to
underwrite it.
Essential Information - ANSWERIt is helpful for underwriters to make a distinction
between information that is essential to their decisions and information that is not.
Underwriters use these categories intuitively or consciously when determining
whether the additional information should be obtained:
____—information that is absolutely necessary to arrive at the decision
Desirable Information - ANSWERIt is helpful for underwriters to make a distinction
between information that is essential to their decisions and information that is not.
Underwriters use these categories intuitively or consciously when determining
whether the additional information should be obtained:
Actual cash value (ACV) - ANSWERCost to replace property with new property of
like kind and quality less depreciation.
Replacement cost - ANSWERThe cost to repair or replace property using new
materials of like kind and quality with no deduction for depreciation.
Loss frequency - ANSWERThe number of losses that occur within a specified period.
Loss severity - ANSWERThe amount of loss, typically measured in dollars, for a loss
that has occurred.
Rating manuals - ANSWER____ are the primary source of information used by
underwriters to classify and rate accounts properly and identify attributes that make a
difference in the price charged the insured.
____—information that is not absolutely necessary but would be helpful in evaluating
the account if the information can be obtained at an acceptable cost and without any
undue delay
Available Information - ANSWERIt is helpful for underwriters to make a distinction
between information that is essential to their decisions and information that is not.
, Underwriters use these categories intuitively or consciously when determining
whether the additional information should be obtained:
____—information that may or may not be helpful and is not worth making any
special effort to obtain
D. Information that is not absolutely necessary but would be helpful in evaluating the
account - ANSWERWhich one of the following accurately describes information
underwriters would categorize as desirable when evaluating the need for additional
information?
A. Information that is absolutely necessary to arrive at the decision
B. Information that may or may not be helpful
C. Information that is not worth making any special effort to obtain
D. Information that is not absolutely necessary but would be helpful in evaluating the
account
C. Building construction - ANSWERAn underwriter has been asked to review a
commercial package application for a four-story apartment building. Which one of the
following pieces of information would the underwriter consider essential?
A. Loss history
B. Payment history
C. Building construction
D. Physical inspection
B. Internet - ANSWERWhich one of the following is a good source of low-cost
available information for underwriters?
A. Current policy
B. Internet
C. Application
D. Physical inspection
D. Insurer's underwriting guidelines - ANSWERVincent has been a commercial lines
underwriter for less than one year. He has received a new business application for
Mellfor Manufacturing (Mellfor). Vincent is not familiar with the manufacturing
process used by Mellfor and would like to order a physical inspection. Which one of
the following would provide direction to Vincent on the use of resources for a
physical inspection?
A. Best's Underwriting Guide
B. Predictive analytics
C. Mellfor's Web site
D. Insurer's underwriting guidelines
C. How the value of the information to underwriting decisions must be weighed
relative to its expense and its timeliness. - ANSWERInformation efficiency refers to
A. How quickly an underwriter can obtain missing information.
