AU 60 MISSED QUESTIONS
CHAPTER 3 QUESTIONS &
ANSWERS (RATED A+)
Vincent 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 Vincent with general
information about the manufacturing process and might avoid the need for a physical
inspection?
Choose one answer.
A. Insurer's underwriting guidelines
B. Predictive analytics
C. Best's Underwriting Guide
D. Dun & Bradstreet report - ANSWERC. Best's Underwriting Guide
Vincent 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?
Choose one answer.
A. Insurer's underwriting guidelines
B. Predictive analytics
C. Best's Underwriting Guide
D. Mellfor's Web site - ANSWERA. Insurer's underwriting guidelines
James, a commercial lines underwriter, is reviewing an applicant with a large fleet of
vehicles for auto coverage. The producer submitted a five year loss summary that
includes the number of losses, the amount paid, and the amount reserved per year.
James is concerned because both the number of losses and the amount incurred
has increased each of the last three years. Which one of the following additional
pieces of information would help James determine if losses are really trending
upward?
, Choose one answer.
A. The number of vehicles per year
B. The name of the prior insurer for each year
C. A break-down of liability and physical damage losses per year
D. The drivers' motor vehicle records for each year - ANSWERA. The number of
vehicles per year
Aaron is a property underwriter for Cromley Insurance Company (Cromley). He
received a new business submission for a company that currently has auto coverage
with Cromley. The producer is expecting Aaron to offer a quick proposal on the
property coverage because he has access to the information in the auto file. Which
one of the following important sources of property underwriting information would be
missing from the auto file?
Choose one answer.
A. Appraisal of values
B. Loss history
C. Financial analysis
D. Safety consciousness - ANSWERA. Appraisal of values
Because of the expense of risk control reports and the importance of making a quick
decision on a new submission, underwriters sometimes approve a submission
subject to a favorable risk control report. Why is it critical that the underwriter receive
the report quickly after the policy's inception date?
Choose one answer.
A. The applicant has time to decide if they want to correct any problems before the
renewal.
B. The underwriter can quickly revise the pricing and billing.
C. Statutes in many states limit an insurer's right to cancel to a brief period of time.
D. Competition has limited time to revise its proposal to the applicant. - ANSWERC.
Statutes in many states limit an insurer's right to cancel to a brief period of time.
Which one of the following external sources of underwriting information is more likely
to be used by an underwriter in the pricing phase, than in risk-selection decisions?
Choose one answer.
A. Insurance advisory organizations
B. Applicant's Web site
CHAPTER 3 QUESTIONS &
ANSWERS (RATED A+)
Vincent 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 Vincent with general
information about the manufacturing process and might avoid the need for a physical
inspection?
Choose one answer.
A. Insurer's underwriting guidelines
B. Predictive analytics
C. Best's Underwriting Guide
D. Dun & Bradstreet report - ANSWERC. Best's Underwriting Guide
Vincent 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?
Choose one answer.
A. Insurer's underwriting guidelines
B. Predictive analytics
C. Best's Underwriting Guide
D. Mellfor's Web site - ANSWERA. Insurer's underwriting guidelines
James, a commercial lines underwriter, is reviewing an applicant with a large fleet of
vehicles for auto coverage. The producer submitted a five year loss summary that
includes the number of losses, the amount paid, and the amount reserved per year.
James is concerned because both the number of losses and the amount incurred
has increased each of the last three years. Which one of the following additional
pieces of information would help James determine if losses are really trending
upward?
, Choose one answer.
A. The number of vehicles per year
B. The name of the prior insurer for each year
C. A break-down of liability and physical damage losses per year
D. The drivers' motor vehicle records for each year - ANSWERA. The number of
vehicles per year
Aaron is a property underwriter for Cromley Insurance Company (Cromley). He
received a new business submission for a company that currently has auto coverage
with Cromley. The producer is expecting Aaron to offer a quick proposal on the
property coverage because he has access to the information in the auto file. Which
one of the following important sources of property underwriting information would be
missing from the auto file?
Choose one answer.
A. Appraisal of values
B. Loss history
C. Financial analysis
D. Safety consciousness - ANSWERA. Appraisal of values
Because of the expense of risk control reports and the importance of making a quick
decision on a new submission, underwriters sometimes approve a submission
subject to a favorable risk control report. Why is it critical that the underwriter receive
the report quickly after the policy's inception date?
Choose one answer.
A. The applicant has time to decide if they want to correct any problems before the
renewal.
B. The underwriter can quickly revise the pricing and billing.
C. Statutes in many states limit an insurer's right to cancel to a brief period of time.
D. Competition has limited time to revise its proposal to the applicant. - ANSWERC.
Statutes in many states limit an insurer's right to cancel to a brief period of time.
Which one of the following external sources of underwriting information is more likely
to be used by an underwriter in the pricing phase, than in risk-selection decisions?
Choose one answer.
A. Insurance advisory organizations
B. Applicant's Web site
