WA Surplus Lines Broker Exam 2025 | Updated
Questions and Correct Answers | Already
Graded A+ | Verified Answers | Just Released
Alien Insurer- no certificate of authority unless they deposit assets in amount not
less than it's outstanding liabilities arising out of its insurance transactions in the
US PLUS assets equal too the larger of the following;
A) the largest amount of deposit required under this title to be made in this state
by any type of domestic insurer transacting like kinds of insurance
B) $200,000
C) Trust account in the amount of $500,000
D) A& B ---------CORRECT ANSWER-----------------D) both A & B
And trust deposit shall be maintained within the US
Foreign and Alien insurers are required to have _____ years of active transactions
in the classes of business it seeks to be admitted OR $_______ Surplus ---------
CORRECT ANSWER-----------------3 years
$25M
Schedule F contains information on _______ ---------CORRECT ANSWER---------------
--Reinsurance (Ceded, Assumed, balance sheet to Identify Net Credit for
Reinsurance)
,Schedule D contains info on what about a company? ---------CORRECT ANSWER----
-------------Summary by country of Stocks & Bonds, quality and maturity of
distribution of bonds owned
Which ratio measures the adequacy of the cushion, without effect of premiums
ceded to insurers (usual range range for ratio includes results up to 900%) ---------
CORRECT ANSWER-----------------Overall Ratio 1- Gross Premiums Written to
Policyholders Surplus (9 to 1)
Which ratio measures the adequacy of the policyholders surplus cushion, net of
the effects of premiums ceded to reinsurers? (Usual range for this ratio includes
results up to 300%) ---------CORRECT ANSWER-----------------Overall Ratio 2- Net
Premiums Written to Policyholders Surplus (3 to 1)
Material increases or decreases in net premiums written could indicate a lack of
stability in the insurer's operations and/or management. A large increase in
premiums could indicate what?
A large decrease in premiums may indicate what?
Usual range for change in net premiums written is? ---------CORRECT ANSWER------
-----------Large increase: entry into new lines of coverage or geographic locations-
or insurer trying to increase cash flow to pay current losses
Large decrease: may indicate a discontinuance of certain lines of business, scaled
back writings due to large losses, or increased use of Reinsurance
Usual range -33% to 33%
,'The use of surplus aid reinsurance treaties may be an indication that company
management believes policyholders' surplus to be inadequate. The continued
solvency of insurers with a large portion of policyholders' surplus resulting from
surplus aid may depend on what? ---------CORRECT ANSWER-----------------
Continued participation in the treaty with the reinsurer.
The usual range for ratio 4 (Surplus Aid to Policyholders' Surplus) should include
results less than 15%
RE: Profitability Ratio (5) Two Year Overall Operating Ratio;
Usual range for the ratio includes results less than ____%. A Two-Year Overall
Operating Ratio below ____% indicates an operating profit and a ratio result
above ____% indicates an operating loss. ---------CORRECT ANSWER-----------------
100% (all 3)
Investment earnings can help offset uw losses.
Profitability Ratio 6- Investment Yield Ratio provides the percentage of annual
income on an investment portfolio.
The usual range for the ratio includes results greater than ___% and less than
___% ---------CORRECT ANSWER-----------------Greater than 3% and less than 6.5%
The '______ _______' ratio is the ultimate measure of improvement or
deterioration in the insurer's financial condition ---------CORRECT ANSWER-----------
------Profitability Ratio 7- Gross Change in Policyholders' Surplus
, The usual range for the 'Gross Change in Policyholders Surplus' includes results
less than ___% and greater than ____% ---------CORRECT ANSWER-----------------
Less than 50%
Greater than -10%
The '_______ _______' ratio measures the improvement or deterioration in the
insurer's financial condition during the year based on operational results. ---------
CORRECT ANSWER-----------------Profitability Ratio 8- Change in Adjusted
Policyholders' Surplus
The usual range for 'Adjusted Policyholders Surplus' includes results less than
____% and greater than ___% ---------CORRECT ANSWER-----------------Less than
25%
Greater than -10%
The '_______ ________' ratio is a measure of the insurer's ability to meet
financial demands. ---------CORRECT ANSWER-----------------Liquidity Ratio 9-
Adjusted Liabilities to Liquid Assets (usual range is below 100%)
'_______ ________' Liquidity ratio measures agents' balances booked as written
and billed to agents in relation to the insurer's policyholders' surplus. ---------
CORRECT ANSWER-----------------Liquidity Ratio 10- Gross Agents' Balances (in
collection) to Policyholders Surplus
Questions and Correct Answers | Already
Graded A+ | Verified Answers | Just Released
Alien Insurer- no certificate of authority unless they deposit assets in amount not
less than it's outstanding liabilities arising out of its insurance transactions in the
US PLUS assets equal too the larger of the following;
A) the largest amount of deposit required under this title to be made in this state
by any type of domestic insurer transacting like kinds of insurance
B) $200,000
C) Trust account in the amount of $500,000
D) A& B ---------CORRECT ANSWER-----------------D) both A & B
And trust deposit shall be maintained within the US
Foreign and Alien insurers are required to have _____ years of active transactions
in the classes of business it seeks to be admitted OR $_______ Surplus ---------
CORRECT ANSWER-----------------3 years
$25M
Schedule F contains information on _______ ---------CORRECT ANSWER---------------
--Reinsurance (Ceded, Assumed, balance sheet to Identify Net Credit for
Reinsurance)
,Schedule D contains info on what about a company? ---------CORRECT ANSWER----
-------------Summary by country of Stocks & Bonds, quality and maturity of
distribution of bonds owned
Which ratio measures the adequacy of the cushion, without effect of premiums
ceded to insurers (usual range range for ratio includes results up to 900%) ---------
CORRECT ANSWER-----------------Overall Ratio 1- Gross Premiums Written to
Policyholders Surplus (9 to 1)
Which ratio measures the adequacy of the policyholders surplus cushion, net of
the effects of premiums ceded to reinsurers? (Usual range for this ratio includes
results up to 300%) ---------CORRECT ANSWER-----------------Overall Ratio 2- Net
Premiums Written to Policyholders Surplus (3 to 1)
Material increases or decreases in net premiums written could indicate a lack of
stability in the insurer's operations and/or management. A large increase in
premiums could indicate what?
A large decrease in premiums may indicate what?
Usual range for change in net premiums written is? ---------CORRECT ANSWER------
-----------Large increase: entry into new lines of coverage or geographic locations-
or insurer trying to increase cash flow to pay current losses
Large decrease: may indicate a discontinuance of certain lines of business, scaled
back writings due to large losses, or increased use of Reinsurance
Usual range -33% to 33%
,'The use of surplus aid reinsurance treaties may be an indication that company
management believes policyholders' surplus to be inadequate. The continued
solvency of insurers with a large portion of policyholders' surplus resulting from
surplus aid may depend on what? ---------CORRECT ANSWER-----------------
Continued participation in the treaty with the reinsurer.
The usual range for ratio 4 (Surplus Aid to Policyholders' Surplus) should include
results less than 15%
RE: Profitability Ratio (5) Two Year Overall Operating Ratio;
Usual range for the ratio includes results less than ____%. A Two-Year Overall
Operating Ratio below ____% indicates an operating profit and a ratio result
above ____% indicates an operating loss. ---------CORRECT ANSWER-----------------
100% (all 3)
Investment earnings can help offset uw losses.
Profitability Ratio 6- Investment Yield Ratio provides the percentage of annual
income on an investment portfolio.
The usual range for the ratio includes results greater than ___% and less than
___% ---------CORRECT ANSWER-----------------Greater than 3% and less than 6.5%
The '______ _______' ratio is the ultimate measure of improvement or
deterioration in the insurer's financial condition ---------CORRECT ANSWER-----------
------Profitability Ratio 7- Gross Change in Policyholders' Surplus
, The usual range for the 'Gross Change in Policyholders Surplus' includes results
less than ___% and greater than ____% ---------CORRECT ANSWER-----------------
Less than 50%
Greater than -10%
The '_______ _______' ratio measures the improvement or deterioration in the
insurer's financial condition during the year based on operational results. ---------
CORRECT ANSWER-----------------Profitability Ratio 8- Change in Adjusted
Policyholders' Surplus
The usual range for 'Adjusted Policyholders Surplus' includes results less than
____% and greater than ___% ---------CORRECT ANSWER-----------------Less than
25%
Greater than -10%
The '_______ ________' ratio is a measure of the insurer's ability to meet
financial demands. ---------CORRECT ANSWER-----------------Liquidity Ratio 9-
Adjusted Liabilities to Liquid Assets (usual range is below 100%)
'_______ ________' Liquidity ratio measures agents' balances booked as written
and billed to agents in relation to the insurer's policyholders' surplus. ---------
CORRECT ANSWER-----------------Liquidity Ratio 10- Gross Agents' Balances (in
collection) to Policyholders Surplus
