Chapter 5 CPCU 520 Exam Questions and Answers| New Update with 100% Correct Answers
The term risk control refers to 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? 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 Collecting underwriting
information on a customer's loss exposures
Which one of the following statements is correct with respect to developing safety
management programs? 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? 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? 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? -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? The
need for a premium audit arises because some insurance policies have adjustable premiums
, All of the following are reasons insurers conduct premium audits 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? 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? Reporting the
audit findings
If an error in a premium audit is detected, the rating bureau cannot calculate the correct
experience modification until 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? Timely premium audits directly
affect the insurer's cash flow management
Premium auditing contributes most directly to Underwriting
Which one of the following may be the only insurer representative that meets insureds, sees
their operation, and reviews their financial records? Premium auditors
Correct Statement 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? Risk control helps insurers meet profit goals by improving the quality of
underwriting decisions
The term risk control refers to 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? 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 Collecting underwriting
information on a customer's loss exposures
Which one of the following statements is correct with respect to developing safety
management programs? 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? 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? 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? -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? The
need for a premium audit arises because some insurance policies have adjustable premiums
, All of the following are reasons insurers conduct premium audits 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? 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? Reporting the
audit findings
If an error in a premium audit is detected, the rating bureau cannot calculate the correct
experience modification until 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? Timely premium audits directly
affect the insurer's cash flow management
Premium auditing contributes most directly to Underwriting
Which one of the following may be the only insurer representative that meets insureds, sees
their operation, and reviews their financial records? Premium auditors
Correct Statement 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? Risk control helps insurers meet profit goals by improving the quality of
underwriting decisions
