AU 60 MISSED PRACTICE TEST
CERTIFICATION EVALUATION TEST
2026 TESTED QUESTIONS PRACTICE
SOLUTION
◉ Which one of the following is a condition that increases the likelihood
that a person will intentionally cause or exaggerate a loss? Answer:
Moral hazard.
◉ The focus of a line underwriter is: Answer: Evaluating new
submissions and renewal underwriting.
◉ Which one of the following ratios is considered the accepted financial
measure of an insurer's underwriting performance? Answer: Combined
ratio.
◉ Which one of the following best describes what underwriting
regulation seeks to prevent? Answer: Applying different standards or
methods of treatment to insureds who have the same basic
characteristics and loss potential.
◉ Tania, an underwriting trainee for Keithly Insurance Company, has
received a new homeowners application for Nanami. The home is to be
insured for $150,000. It is a frame house with a swimming pool and
trampoline in the back yard. The grass needs mowing and the shrubbery
needs trimming. Nanami has a marginal credit score. What is Tania's
first step in underwriting the policy for Nanami? Answer: Check to see
if she has the underwriting authority to make the decision.
, ◉ An insurer decides to discontinue writing a class of workers
compensation insureds because losses on the business have exceeded
expectations. Instead, in an effort to maximize its return on equity, the
insurer plans to use its resources to increase the volume of accounts in
an area that offers more promising returns. This need to redirect the
focus for desired business is an example of an underwriting constraint
due to: Answer: Financial capacity.
◉ Which one of the following statements is correct with regard to
underwriting guidelines? Answer: Compliance with underwriting
guidelines ensures selection of loss exposures commensurate with
planned rate levels.
◉ Which one of the following statements is correct with respect to
policy form laws? Answer: Deemer provisions are intended to encourage
a prompt review of submitted policy forms.
◉ Which one of the following statements is correct with respect to
market conduct examinations? Answer: The Department of Insurance
(DOI) may suspend or revoke the insurer's certificate of authority if it
finds that an insurer has violated a law.
◉ LMN Insurance Company has recently opened three new regional
offices and has been growing rapidly. Because of the rapid growth in
written premiums, LMN's premium-to-surplus ratio has risen to three to
one. Which one of the following is the most viable option for LMN to
CERTIFICATION EVALUATION TEST
2026 TESTED QUESTIONS PRACTICE
SOLUTION
◉ Which one of the following is a condition that increases the likelihood
that a person will intentionally cause or exaggerate a loss? Answer:
Moral hazard.
◉ The focus of a line underwriter is: Answer: Evaluating new
submissions and renewal underwriting.
◉ Which one of the following ratios is considered the accepted financial
measure of an insurer's underwriting performance? Answer: Combined
ratio.
◉ Which one of the following best describes what underwriting
regulation seeks to prevent? Answer: Applying different standards or
methods of treatment to insureds who have the same basic
characteristics and loss potential.
◉ Tania, an underwriting trainee for Keithly Insurance Company, has
received a new homeowners application for Nanami. The home is to be
insured for $150,000. It is a frame house with a swimming pool and
trampoline in the back yard. The grass needs mowing and the shrubbery
needs trimming. Nanami has a marginal credit score. What is Tania's
first step in underwriting the policy for Nanami? Answer: Check to see
if she has the underwriting authority to make the decision.
, ◉ An insurer decides to discontinue writing a class of workers
compensation insureds because losses on the business have exceeded
expectations. Instead, in an effort to maximize its return on equity, the
insurer plans to use its resources to increase the volume of accounts in
an area that offers more promising returns. This need to redirect the
focus for desired business is an example of an underwriting constraint
due to: Answer: Financial capacity.
◉ Which one of the following statements is correct with regard to
underwriting guidelines? Answer: Compliance with underwriting
guidelines ensures selection of loss exposures commensurate with
planned rate levels.
◉ Which one of the following statements is correct with respect to
policy form laws? Answer: Deemer provisions are intended to encourage
a prompt review of submitted policy forms.
◉ Which one of the following statements is correct with respect to
market conduct examinations? Answer: The Department of Insurance
(DOI) may suspend or revoke the insurer's certificate of authority if it
finds that an insurer has violated a law.
◉ LMN Insurance Company has recently opened three new regional
offices and has been growing rapidly. Because of the rapid growth in
written premiums, LMN's premium-to-surplus ratio has risen to three to
one. Which one of the following is the most viable option for LMN to
