CPCU 520 PRACTICE EXAM QUESTIONS & ANSWERS
In some states, the courts have ruled that injuries sustained as a result of drive-by
shootings are covered under the victim's personal auto policy. This is an example of a -
Answers -legal hazard
The state advisory organization has developed a new homeowners form which
increases the personal property limits for guns, silverware, jewelry, and boats. Jancy
Insurance Company is considering modifying the form for its own use. Which one of the
following members of Jancy's staff would be involved in the research and development
of this new form? - Answers -corporate underwriter
An insurer's marketing department is working with the underwriting department to
determine what characteristics of middle market businesses result in the most profitable
commercial insurance accounts. Which one of the following methods would be most
effective in identifying these characteristics? - Answers -predictive analysis
Corporate underwriters share research of the market responsibilities with actuarial and
marketing departments. Research includes an ongoing evaluation of which one of the
following? - Answers -optimal product mix in the book of business
Which one of the following best describes how underwriters evaluate personal
insurance submissions? - Answers -they concentrate on identifying any hazards that
may exist
Which one of the following will draft a manuscript policy or endorsement that is worded
to address the specific needs of the insured? - Answers -corporate underwriter
Patrick had a large homeowners claim pending when his insurer became insolvent and
was placed in receivership. Which one of the following correctly describes how Patrick's
claim will be handled if the insurer is unable to be rehabilitated? - Answers -Patrick's
claim will be covered by the state guaranty fund
Gulford Insurance Company (Gulford) is a direct writer of commercial insurance in
Pennsylvania. The management team is frustrated by the continued lack of success in
the more rural western part of the state. It is difficult to penetrate the market without a
local presence, but the cost of assigning agents to this territory is not justified by the
returns. Which one of the following distribution systems would best allow Gulford the
local presence in a cost-effective manner? - Answers -independent agents
In which one of the following scenarios is a public adjuster most likely to become
involved? - Answers -an insured's negotiations with an insurer on a complex claim are
not going well
In some states, the courts have ruled that injuries sustained as a result of drive-by
shootings are covered under the victim's personal auto policy. This is an example of a -
Answers -legal hazard
The state advisory organization has developed a new homeowners form which
increases the personal property limits for guns, silverware, jewelry, and boats. Jancy
Insurance Company is considering modifying the form for its own use. Which one of the
following members of Jancy's staff would be involved in the research and development
of this new form? - Answers -corporate underwriter
An insurer's marketing department is working with the underwriting department to
determine what characteristics of middle market businesses result in the most profitable
commercial insurance accounts. Which one of the following methods would be most
effective in identifying these characteristics? - Answers -predictive analysis
Corporate underwriters share research of the market responsibilities with actuarial and
marketing departments. Research includes an ongoing evaluation of which one of the
following? - Answers -optimal product mix in the book of business
Which one of the following best describes how underwriters evaluate personal
insurance submissions? - Answers -they concentrate on identifying any hazards that
may exist
Which one of the following will draft a manuscript policy or endorsement that is worded
to address the specific needs of the insured? - Answers -corporate underwriter
Patrick had a large homeowners claim pending when his insurer became insolvent and
was placed in receivership. Which one of the following correctly describes how Patrick's
claim will be handled if the insurer is unable to be rehabilitated? - Answers -Patrick's
claim will be covered by the state guaranty fund
Gulford Insurance Company (Gulford) is a direct writer of commercial insurance in
Pennsylvania. The management team is frustrated by the continued lack of success in
the more rural western part of the state. It is difficult to penetrate the market without a
local presence, but the cost of assigning agents to this territory is not justified by the
returns. Which one of the following distribution systems would best allow Gulford the
local presence in a cost-effective manner? - Answers -independent agents
In which one of the following scenarios is a public adjuster most likely to become
involved? - Answers -an insured's negotiations with an insurer on a complex claim are
not going well
