Chapter 5 CPCU 520 Exam Questions and Answers Already Passed Latest Update 2025-2026
The term risk control refers to - Answers A technique to prevent or mitigate losses
Which one of the following is the best example of an insurer's risk control activities generating
addition revenue for the insurer? - Answers An insurer provides industrial hygiene services to a
self-insured firm for a fee
The risk control service of conducting a physical survey consists of - Answers Collecting
underwriting information on a customer's loss exposures
Which one of the following statements is correct with respect to developing safety
management programs? - Answers Developing a safety management program begins with a
complete evaluation of the policyholder's operations
Which one of the following best describes the purpose of a safety program developed by an
insurer's risk control representatives? - Answers To raise workers' awareness of loss exposures
and appropriate safety behaviors
Which one of the following statements is correct regarding the relationship between risk control
and claims? - Answers The risk control department needs claim experience information to direct
loss-control resources and efforts to crucial areas
Which one of the following statements is correct regarding the interaction between risk control
and other insurer functions? - Answers -Risk control personnel can assist underwriters in
modifying a new applicant's loss exposures to meet eligibility requirements
-A risk control evaluation can make the difference between the applicant's being rejected or
accepted by the underwriter.
Which one of the following statements is correct with respect to premium auditing? - Answers
The need for a premium audit arises because some insurance policies have adjustable
premiums
All of the following are reasons insurers conduct premium audits - Answers To collect
ratemaking data, to deter and detect fraud, and to determine correct premiums
Which one of the following statements about premium auditing is true? - Answers Premium
auditors determine whether a given policy uses the correct rating classification
Which one of the following is an actual step in the premium auditing process? - Answers
Reporting the audit findings
If an error in a premium audit is detected, the rating bureau cannot calculate the correct
experience modification until - Answers It receives the correct audit data
Which one of the following statements is correct regarding how a prompt and accurate
, premium audit can affect the insurer's financial position? - Answers Timely premium audits
directly affect the insurer's cash flow management
Premium auditing contributes most directly to - Answers Underwriting
Which one of the following may be the only insurer representative that meets insureds, sees
their operation, and reviews their financial records? - Answers Premium auditors
Correct Statement - Answers By exercising sound risk control, organizations fulfill occupational
safety and health standards and comply with local, state, and federal laws.
Which one of the following statements is correct with regard to the risk control function of
insurers? - Answers Risk control helps insurers meet profit goals by improving the quality of
underwriting decisions
Which one of the following statements is correct regarding insurers' involvement in safety
management programs for insureds? - Answers Part of a risk control consultant's role in
developing a safety management program is assisting the insured in establishing risk control
goals.
Developing a safety management program begins with a - Answers Complete evaluation of the
policyholder's operations.
Which one of the following statements is correct with respect to developing safety
management programs? - Answers Developing a safety management program begins with a
complete evaluation of the policyholder's operations.
Risk control can assist premium auditing by - Answers Reporting the existence of new
operations.
Which one of the following statements is true concerning risk control? - Answers Risk control
can assist marketing by providing advice on improving safety
Which one of the following statements is true concerning premium audits? - Answers Insurers
conduct premium audits to determine correct policy premiums
Which one of the following statements is correct with respect to premium audits? - Answers -
Policyholders are far less likely to submit false or misleading information when they know it will
be verified by a premium auditor
-When a policy is written subject to audit, the exact exposure and premium bases cannot be
known until the end of the policy period.
Which one of the following statements is correct with respect to the premium auditing process?
- Answers -Once premium auditors have obtained the data necessary for calculating the
premium, they must decide whether the data are reasonable.
The term risk control refers to - Answers A technique to prevent or mitigate losses
Which one of the following is the best example of an insurer's risk control activities generating
addition revenue for the insurer? - Answers An insurer provides industrial hygiene services to a
self-insured firm for a fee
The risk control service of conducting a physical survey consists of - Answers Collecting
underwriting information on a customer's loss exposures
Which one of the following statements is correct with respect to developing safety
management programs? - Answers Developing a safety management program begins with a
complete evaluation of the policyholder's operations
Which one of the following best describes the purpose of a safety program developed by an
insurer's risk control representatives? - Answers To raise workers' awareness of loss exposures
and appropriate safety behaviors
Which one of the following statements is correct regarding the relationship between risk control
and claims? - Answers The risk control department needs claim experience information to direct
loss-control resources and efforts to crucial areas
Which one of the following statements is correct regarding the interaction between risk control
and other insurer functions? - Answers -Risk control personnel can assist underwriters in
modifying a new applicant's loss exposures to meet eligibility requirements
-A risk control evaluation can make the difference between the applicant's being rejected or
accepted by the underwriter.
Which one of the following statements is correct with respect to premium auditing? - Answers
The need for a premium audit arises because some insurance policies have adjustable
premiums
All of the following are reasons insurers conduct premium audits - Answers To collect
ratemaking data, to deter and detect fraud, and to determine correct premiums
Which one of the following statements about premium auditing is true? - Answers Premium
auditors determine whether a given policy uses the correct rating classification
Which one of the following is an actual step in the premium auditing process? - Answers
Reporting the audit findings
If an error in a premium audit is detected, the rating bureau cannot calculate the correct
experience modification until - Answers It receives the correct audit data
Which one of the following statements is correct regarding how a prompt and accurate
, premium audit can affect the insurer's financial position? - Answers Timely premium audits
directly affect the insurer's cash flow management
Premium auditing contributes most directly to - Answers Underwriting
Which one of the following may be the only insurer representative that meets insureds, sees
their operation, and reviews their financial records? - Answers Premium auditors
Correct Statement - Answers By exercising sound risk control, organizations fulfill occupational
safety and health standards and comply with local, state, and federal laws.
Which one of the following statements is correct with regard to the risk control function of
insurers? - Answers Risk control helps insurers meet profit goals by improving the quality of
underwriting decisions
Which one of the following statements is correct regarding insurers' involvement in safety
management programs for insureds? - Answers Part of a risk control consultant's role in
developing a safety management program is assisting the insured in establishing risk control
goals.
Developing a safety management program begins with a - Answers Complete evaluation of the
policyholder's operations.
Which one of the following statements is correct with respect to developing safety
management programs? - Answers Developing a safety management program begins with a
complete evaluation of the policyholder's operations.
Risk control can assist premium auditing by - Answers Reporting the existence of new
operations.
Which one of the following statements is true concerning risk control? - Answers Risk control
can assist marketing by providing advice on improving safety
Which one of the following statements is true concerning premium audits? - Answers Insurers
conduct premium audits to determine correct policy premiums
Which one of the following statements is correct with respect to premium audits? - Answers -
Policyholders are far less likely to submit false or misleading information when they know it will
be verified by a premium auditor
-When a policy is written subject to audit, the exact exposure and premium bases cannot be
known until the end of the policy period.
Which one of the following statements is correct with respect to the premium auditing process?
- Answers -Once premium auditors have obtained the data necessary for calculating the
premium, they must decide whether the data are reasonable.
