CPCU 520 Practice Test Questions With
Correct Answers Recent Uploaded
Quiz's
1. Which one of the following functional areas of Keithly can assist Alex with this audit's irregularity? -
ANSWER ✔ - Special Investigation Unit
2. Which one of the following best describes a FAIR plan and its insureds? - ANSWER ✔ - State-run plans
with cost spread among private insurers in the state
3. Which one of the following departments provides information to the underwriting department to
assist in selecting and rating risks? - ANSWER ✔ - Risk control
4. All corporations are obligated to promote the well-being of society. At the minimum, this obligation
demands that the insurer should - ANSWER ✔ - Avoid causing any public harm.
5. Which one of the following insurer functions includes calculating insurance rates, developing rating
plans, estimating loss reserves, and providing predictive modeling services? - ANSWER ✔ - Actuarial
6. Property-casualty insurers can be classified in which one of the following ways? - ANSWER ✔ -
Licensing status
7. Which one of the following statements is correct with regard to an insurer's goals? - ANSWER ✔ - A
proprietary insurer must earn competitive profits to raise the capital needed to operate.
8. The United States regulatory framework has evolved over time into which one of the following
approaches used by insurance regulators today? - ANSWER ✔ - Risk-focused approach
9. Which one of the following statements regarding licensing of insurers or insurance personnel is true?
- ANSWER ✔ - Some states permit the insurance commissioner to deny a license to an otherwise
worthy applicant if the commissioner believes that no additional insurers are needed in the state.
pg. 1
CPCU 520
©®
, 10. Which one of the following statements is correct? - ANSWER ✔ - If insurers become insolvent, future
claims might not be paid and the insurance protection already paid for might become worthless.
11. One way state insurance regulators help to protect consumers is by reviewing insurance policy forms
to determine whether they benefit consumers and - ANSWER ✔ - Comply with state consumer
protection laws.
12. Every state insurance department is headed by a state insurance commissioner, a director, or by a -
ANSWER ✔ - Superintendent.
13. How often does the National Association of Insurance Commissioners (NAIC) meet to discuss
important problems and issues in insurance regulation? - ANSWER ✔ - Three times a year
14. Which one of the following statements is correct? - ANSWER ✔ - An insurer does not know what its
actual expenses will be when a policy is sold.
15. Filip is quoting to get Osakri's business and is not concerned with the adequacy of Mellfor's coverage
with actual cash value on contents. Filip's behavior involving Osakri is known as - ANSWER ✔ -
Twisting.
16. All states attempt to ensure that continuous auto insurance coverage is available to consumers by -
ANSWER ✔ - Restricting the rights of insurers to cancel or nonrenew personal auto insurance policies
17. Under the terms of her agency contracts, the insurers forward policies promptly to Rhonda's
customers and send a premium invoice with the policy. Insureds are instructed to remit premium
payments to their insurer. The insurers calculate Rhonda's commissions and forward those
commission payments to her monthly. Rhonda is operating under which one of the following
payment procedures? - ANSWER ✔ - Direct bill basis
18. Omicron Manufacturing has approached Delta Insurance Brokerage to develop and implement a
voluntary insurance program for life, health, and disability insurance for Omicron's employees. Delta
puts together a program in which employees receive the coverage at discounted rates, and premiums
are deducted from the employees' paychecks. Omicron and Delta are using which one of the
following types of group marketing to offer this program? - ANSWER ✔ - Franchise marketing
pg. 2
CPCU 520
©®
Correct Answers Recent Uploaded
Quiz's
1. Which one of the following functional areas of Keithly can assist Alex with this audit's irregularity? -
ANSWER ✔ - Special Investigation Unit
2. Which one of the following best describes a FAIR plan and its insureds? - ANSWER ✔ - State-run plans
with cost spread among private insurers in the state
3. Which one of the following departments provides information to the underwriting department to
assist in selecting and rating risks? - ANSWER ✔ - Risk control
4. All corporations are obligated to promote the well-being of society. At the minimum, this obligation
demands that the insurer should - ANSWER ✔ - Avoid causing any public harm.
5. Which one of the following insurer functions includes calculating insurance rates, developing rating
plans, estimating loss reserves, and providing predictive modeling services? - ANSWER ✔ - Actuarial
6. Property-casualty insurers can be classified in which one of the following ways? - ANSWER ✔ -
Licensing status
7. Which one of the following statements is correct with regard to an insurer's goals? - ANSWER ✔ - A
proprietary insurer must earn competitive profits to raise the capital needed to operate.
8. The United States regulatory framework has evolved over time into which one of the following
approaches used by insurance regulators today? - ANSWER ✔ - Risk-focused approach
9. Which one of the following statements regarding licensing of insurers or insurance personnel is true?
- ANSWER ✔ - Some states permit the insurance commissioner to deny a license to an otherwise
worthy applicant if the commissioner believes that no additional insurers are needed in the state.
pg. 1
CPCU 520
©®
, 10. Which one of the following statements is correct? - ANSWER ✔ - If insurers become insolvent, future
claims might not be paid and the insurance protection already paid for might become worthless.
11. One way state insurance regulators help to protect consumers is by reviewing insurance policy forms
to determine whether they benefit consumers and - ANSWER ✔ - Comply with state consumer
protection laws.
12. Every state insurance department is headed by a state insurance commissioner, a director, or by a -
ANSWER ✔ - Superintendent.
13. How often does the National Association of Insurance Commissioners (NAIC) meet to discuss
important problems and issues in insurance regulation? - ANSWER ✔ - Three times a year
14. Which one of the following statements is correct? - ANSWER ✔ - An insurer does not know what its
actual expenses will be when a policy is sold.
15. Filip is quoting to get Osakri's business and is not concerned with the adequacy of Mellfor's coverage
with actual cash value on contents. Filip's behavior involving Osakri is known as - ANSWER ✔ -
Twisting.
16. All states attempt to ensure that continuous auto insurance coverage is available to consumers by -
ANSWER ✔ - Restricting the rights of insurers to cancel or nonrenew personal auto insurance policies
17. Under the terms of her agency contracts, the insurers forward policies promptly to Rhonda's
customers and send a premium invoice with the policy. Insureds are instructed to remit premium
payments to their insurer. The insurers calculate Rhonda's commissions and forward those
commission payments to her monthly. Rhonda is operating under which one of the following
payment procedures? - ANSWER ✔ - Direct bill basis
18. Omicron Manufacturing has approached Delta Insurance Brokerage to develop and implement a
voluntary insurance program for life, health, and disability insurance for Omicron's employees. Delta
puts together a program in which employees receive the coverage at discounted rates, and premiums
are deducted from the employees' paychecks. Omicron and Delta are using which one of the
following types of group marketing to offer this program? - ANSWER ✔ - Franchise marketing
pg. 2
CPCU 520
©®
