Page | 1
ALU 202 EXAM 2026
QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
All of the following statements are recommended guidelines on
the Fair Treatment of Customers EXCEPT:
1. Create plain language product information.
2. Design products with the insurer's needs in mind.
3. Notify customers promptly about changes to their product.
4. Advise customers clearly about their rights and obligations
under a contract. - correct answer -Answer 2: Design products
with the insurer's needs in mind - page 248.
In the U.S., the agency that protects policyholders when an
insurer is insolvent is the:
1. National Association of Insurance Commissioners (NAIC)
2. State Guaranty Association
3. Government Accountability Office (GAO)
4. National Council of Insurance Legislators (NCOIL) - correct
answer -Answer 2: State Guaranty Association - page 251.
, Page | 2
What is rebating and under what circumstances is it acceptable? -
correct answer -Refer to pages 260-261.
The principal trade associations for life insurance companies in
the United States is the:
1. National Association of Insurance and Financial Advisors
(NAIFA)
2. Association for Advanced Life Underwriting (AALU)
3. American Council of Life Insurers (ACLI)
4. Securities and Exchange Commission (SEC) - correct answer -
Answer 3: American Council of Life Insurers (ACLI) - page 249.
What is the National Association of Insurance Commissioners
(NAIC) and what need does it address? - correct answer -Refer to
page 248.
Applications of predictive modeling in underwriting include all the
following EXCEPT:
, Page | 3
1. mortality scoring
2. feature engineering
3. application triage and requirement selection
4. propensity scoring - correct answer -Answer 2: feature
engineering - pages 270-271.
A pitfall for model fitting is:
1. data sources
2. model hold outs
3. underfitting
4. model validation - correct answer -Answer 3: underfitting - page
276.
All the following are considerations when implementing a model
EXCEPT:
1. reason codes
2. integration and end-to end testing
3. model holdouts
4. propensity scoring - correct answer -Answer 4: propensity
scoring - pages 282-283.
, Page | 4
Compare and contrast the favorable and unfavorable features
associated with underfitting and overfitting. - correct answer -
Refer to page 276.
Describe what outliers are and how they can be handled. - correct
answer -Refer to page 278.
Commonly used model types include which of the following?
A. decision tree
B. data availability
C. linear regression
Answer Options:
1. A only is correct.
2. A and C only are correct.
3. B and C only are correct.
4. A, B, and C are correct. - correct answer -Answer 2: A and C
only are correct - page 280.
ALU 202 EXAM 2026
QUESTIONS AND ANSWERS|
ACE YOUR GRADES.
All of the following statements are recommended guidelines on
the Fair Treatment of Customers EXCEPT:
1. Create plain language product information.
2. Design products with the insurer's needs in mind.
3. Notify customers promptly about changes to their product.
4. Advise customers clearly about their rights and obligations
under a contract. - correct answer -Answer 2: Design products
with the insurer's needs in mind - page 248.
In the U.S., the agency that protects policyholders when an
insurer is insolvent is the:
1. National Association of Insurance Commissioners (NAIC)
2. State Guaranty Association
3. Government Accountability Office (GAO)
4. National Council of Insurance Legislators (NCOIL) - correct
answer -Answer 2: State Guaranty Association - page 251.
, Page | 2
What is rebating and under what circumstances is it acceptable? -
correct answer -Refer to pages 260-261.
The principal trade associations for life insurance companies in
the United States is the:
1. National Association of Insurance and Financial Advisors
(NAIFA)
2. Association for Advanced Life Underwriting (AALU)
3. American Council of Life Insurers (ACLI)
4. Securities and Exchange Commission (SEC) - correct answer -
Answer 3: American Council of Life Insurers (ACLI) - page 249.
What is the National Association of Insurance Commissioners
(NAIC) and what need does it address? - correct answer -Refer to
page 248.
Applications of predictive modeling in underwriting include all the
following EXCEPT:
, Page | 3
1. mortality scoring
2. feature engineering
3. application triage and requirement selection
4. propensity scoring - correct answer -Answer 2: feature
engineering - pages 270-271.
A pitfall for model fitting is:
1. data sources
2. model hold outs
3. underfitting
4. model validation - correct answer -Answer 3: underfitting - page
276.
All the following are considerations when implementing a model
EXCEPT:
1. reason codes
2. integration and end-to end testing
3. model holdouts
4. propensity scoring - correct answer -Answer 4: propensity
scoring - pages 282-283.
, Page | 4
Compare and contrast the favorable and unfavorable features
associated with underfitting and overfitting. - correct answer -
Refer to page 276.
Describe what outliers are and how they can be handled. - correct
answer -Refer to page 278.
Commonly used model types include which of the following?
A. decision tree
B. data availability
C. linear regression
Answer Options:
1. A only is correct.
2. A and C only are correct.
3. B and C only are correct.
4. A, B, and C are correct. - correct answer -Answer 2: A and C
only are correct - page 280.
