CPCU 520 Weakpoints Exam | Questions with
100% Correct Answers | Verified | Latest Update
2026/2027
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Terms in this set (15)
The 'nine-month rule,' developed by Signing of reinsurance agreements.
the National Association of Insurance
Commissioners (NAIC), applies to
the
Select one:
A. Payment of reinsurance premium.
B. Delivery of a broker of record
letter.
C. Payment of covered losses.
D. Signing of reinsurance
agreements.
A. The rates should be based on the The rates should provide for unexpected variations
most recent claims information in losses and expenses.
available.
B. The rates should provide for
unexpected variations in losses and
expenses.
C. The rates should reflect the
amount of risk the insured is exposed
to.
D. The rates should allow for the
insurer to earn a fair profit.
, ABC Insurance Group is growing its Obtain underwriting guidance
business faster than it anticipated
and is ready to purchase reinsurance
for the first time. Which one of the
following reasons insurers use
reinsurance is particularly important
to ABC at this point in the company’s
journey?
Select one:
A. Stabilization of loss experience
B. Surplus relief
C. Protection from catastrophic
losses
D. Obtain underwriting guidance
Insurance Company (IC) reports the $66
information below for its automobile
insurance line. Using the pure
premium ratemaking method, which
one of the following is the rate per
exposure unit, rounded to the
nearest dollar, for IC's automobile
line of business?
Incurred losses:$5 millionEarned car-
years:100,000Expenses:$1.3
millionProfit and contingencies
factor:5%Earned premiums:$6.2
million
Select one:
A. $25
B. $49
C. $66
D. $81
100% Correct Answers | Verified | Latest Update
2026/2027
Save
Terms in this set (15)
The 'nine-month rule,' developed by Signing of reinsurance agreements.
the National Association of Insurance
Commissioners (NAIC), applies to
the
Select one:
A. Payment of reinsurance premium.
B. Delivery of a broker of record
letter.
C. Payment of covered losses.
D. Signing of reinsurance
agreements.
A. The rates should be based on the The rates should provide for unexpected variations
most recent claims information in losses and expenses.
available.
B. The rates should provide for
unexpected variations in losses and
expenses.
C. The rates should reflect the
amount of risk the insured is exposed
to.
D. The rates should allow for the
insurer to earn a fair profit.
, ABC Insurance Group is growing its Obtain underwriting guidance
business faster than it anticipated
and is ready to purchase reinsurance
for the first time. Which one of the
following reasons insurers use
reinsurance is particularly important
to ABC at this point in the company’s
journey?
Select one:
A. Stabilization of loss experience
B. Surplus relief
C. Protection from catastrophic
losses
D. Obtain underwriting guidance
Insurance Company (IC) reports the $66
information below for its automobile
insurance line. Using the pure
premium ratemaking method, which
one of the following is the rate per
exposure unit, rounded to the
nearest dollar, for IC's automobile
line of business?
Incurred losses:$5 millionEarned car-
years:100,000Expenses:$1.3
millionProfit and contingencies
factor:5%Earned premiums:$6.2
million
Select one:
A. $25
B. $49
C. $66
D. $81
