1|Page
CPCU 520 Exam (Verified Questions And Answers)||Best
Latest Edition||Sure Pass!!!
Which one of the following is a limitation of the loss
development method of estimating loss reserves?
Select one:
A. Large one-time events such as catastrophes would disrupt
the historical pattern of development.
B. The loss development method only uses one year of loss
experience.
C. The loss development triangle must be built up month after
month.
D. The loss development method assumes that future
experience will rarely develop the same way it has in the past. -
ANSWER-D. The loss development method assumes that future
experience will rarely develop the same way it has in the past.
Which one of the following statements is true regarding claim
department contacts?
Select one:
A. Insurer claim departments perform market conduct
investigations as part of their normal activities.
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B. Uniform legislation exists for licensing of insurance claim
adjusters.
C. Consumer complaints are investigated by the state insurance
departments.
D. Attorney representation guarantees a faster claim
settlement. - ANSWER-C. Consumer complaints are investigated
by the state insurance departments.
Which one of the following financial ratios is key for evaluating
insurer solvency?
Select one:
A. Retention ratio
B. Loss ratio
C. Expense ratio
D. Premium to surplus ratio - ANSWER-D. Premium to surplus
ratio
Which one of the following statements is correct?
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Select one:
A. Some states require insurance consultants who give advice or
opinions about polices to be licensed.
B. Licensing requirements for insurance brokers are
standardized among all the states.
C. Public adjusters, who represent insureds for a fee, are not
subject to licensing requirements.
D. Insurance agents are not subject to licensing requirements in
most states. - ANSWER-A. Some states require insurance
consultants who give advice or opinions about polices to be
licensed.
There are many types of controls used by organizations to
gauge their progress toward meeting their goals. In the
insurance industry, expense ratios and loss ratios are examples
of which one of the following types of controls?
Select one:
A. Process
B. Financial
C. Behavioral
D. Operational - ANSWER-B. Financial
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The Five Forces Model is a commonly used method of
Select one:
A. Monitoring corporate goals.
B. Measuring the company's financial, physical, and human
assets.
C. Benchmarking strengths of management team against
competition.
D. Analyzing the competitive environment. - ANSWER-D.
Analyzing the competitive environment.
Which one of the following statements is correct with regard to
the regulation of insurance policies?
Select one:
A. Most states have adopted "speed to market" laws that allow
policy wordings to be used prior to regulatory approval.
B. Legislation might require that certain standard mandatory
policy provisions appear in certain types of insurance policies.
CPCU 520 Exam (Verified Questions And Answers)||Best
Latest Edition||Sure Pass!!!
Which one of the following is a limitation of the loss
development method of estimating loss reserves?
Select one:
A. Large one-time events such as catastrophes would disrupt
the historical pattern of development.
B. The loss development method only uses one year of loss
experience.
C. The loss development triangle must be built up month after
month.
D. The loss development method assumes that future
experience will rarely develop the same way it has in the past. -
ANSWER-D. The loss development method assumes that future
experience will rarely develop the same way it has in the past.
Which one of the following statements is true regarding claim
department contacts?
Select one:
A. Insurer claim departments perform market conduct
investigations as part of their normal activities.
,2|Page
B. Uniform legislation exists for licensing of insurance claim
adjusters.
C. Consumer complaints are investigated by the state insurance
departments.
D. Attorney representation guarantees a faster claim
settlement. - ANSWER-C. Consumer complaints are investigated
by the state insurance departments.
Which one of the following financial ratios is key for evaluating
insurer solvency?
Select one:
A. Retention ratio
B. Loss ratio
C. Expense ratio
D. Premium to surplus ratio - ANSWER-D. Premium to surplus
ratio
Which one of the following statements is correct?
,3|Page
Select one:
A. Some states require insurance consultants who give advice or
opinions about polices to be licensed.
B. Licensing requirements for insurance brokers are
standardized among all the states.
C. Public adjusters, who represent insureds for a fee, are not
subject to licensing requirements.
D. Insurance agents are not subject to licensing requirements in
most states. - ANSWER-A. Some states require insurance
consultants who give advice or opinions about polices to be
licensed.
There are many types of controls used by organizations to
gauge their progress toward meeting their goals. In the
insurance industry, expense ratios and loss ratios are examples
of which one of the following types of controls?
Select one:
A. Process
B. Financial
C. Behavioral
D. Operational - ANSWER-B. Financial
, 4|Page
The Five Forces Model is a commonly used method of
Select one:
A. Monitoring corporate goals.
B. Measuring the company's financial, physical, and human
assets.
C. Benchmarking strengths of management team against
competition.
D. Analyzing the competitive environment. - ANSWER-D.
Analyzing the competitive environment.
Which one of the following statements is correct with regard to
the regulation of insurance policies?
Select one:
A. Most states have adopted "speed to market" laws that allow
policy wordings to be used prior to regulatory approval.
B. Legislation might require that certain standard mandatory
policy provisions appear in certain types of insurance policies.
