CPCU 552 STUDY GUIDE 2026 EXAM QUESTIONS AND
SOLUTIONS RATED A+
✔✔6. Temporary Partial Disability (TPD) - ✔✔a disability caused by a work related
injury or disease that temporarily limits the extent to which an employee can perform job
duties; the employee is eventually able to return to full duties and hours
✔✔6. Permanent Partial Disability (PPD) - ✔✔a disability caused by a work related
injury or disease that impairs the injured employee's earning capacity for life, but the
employee is able to work at reduced efficiency
✔✔6. State Fund - ✔✔a worker's compensation insurer that is set up by the state in
which it operates either as an agency of the state government or as a mutual or not-for-
profit insurer
✔✔6. Competitive state Fund - ✔✔a state fund that sells workers comp insurance in
competition with private insurers
✔✔6. Monopolistic State Fund (Exclusive state fund) - ✔✔a facility owned and operated
by a state government that provides workers comp insurance and that does not permit
any other insurers to sell workers comp insurance in that state
✔✔6. Self-insured group (pool or trust) - ✔✔a group of employers in the same industry
that jointly (as a whole) or severally (individually) guarantee payment of workers comp
benefits to the employees of the groups members. a not-for-profit association or
corporation is typically formed to which they pay premiums for self-insurance purposes.
✔✔6. Extraterritorial provision - ✔✔a provision of workers comp statute that extends
protection to an employee who is injured while temporarily working in a state other than
the state of hire.
✔✔6. Situs Test - ✔✔a test that a claimant must satisfy to be covered under the US
Longshore and Harbor Worker's Compensation Act; it requires that, at the time of injury,
the claimant must have been on navigable waters or on adjoining areas such as piers,
wharves, dry docks, terminals, buildingways, marine railways or other areas customarily
used in loading, unloading, repairing, dismantling or building vessels.
✔✔6. Status Test - ✔✔test that a claimant must satisfy to be covered under the US
Alongshore and Harbor Workers' Compensation Act. It requires that at the time of injury,
the claimant must have been engaged in maritime employment.
✔✔6. Workers Compensation Insurance - ✔✔Insurance that provides coverage for
benefits an employer is obligated to pay under workers comp laws
,✔✔6. Experience Modification Factor - ✔✔factor that tailors manual rates to an
insured's experience based on the insured's payroll and loss record of certain prior
years
✔✔6. Employers Liability insurance - ✔✔insurance that protects an employer against
employee injury claims that are not covered by workers comp laws
✔✔6. Other States Insurance - ✔✔Insurance that automatically extends coverage to the
insured's operations in any state listed in Item 3.C of the WC&EL information page
✔✔6. Voluntary Compensation and Employers Liability Coverage Endorsement -
✔✔End that amends the WC&EL policy to cover employees who are not subject to a
workers compensation statute
✔✔6. Foreign voluntary workers compensation coverage - ✔✔coverage that insures
employees who are working outside the US and who are not subject to a workers comp
law for benefits equal to those provided under either the workers comp statute of a
specified state or a specified federal compensation act
✔✔6. United States Longshore and harbor Worker's Compensation Act Endorsement -
✔✔Endorsement that amends the WC&EL policy to cover the insured's obligations
under the USLHWCA
✔✔6. Maritime Coverage Endorsement - ✔✔endorsement that amends the WC&ELl
policy to cover an employer's liability for injury or death of crew members
✔✔6. Waiver of Our Right to Recover From Others Endorsement - ✔✔the endorsement
in which a WC insurer agrees to not enforce its right of subrogation against any
organization listed in the endorsement's schedule
✔✔6. Alternate Employer Endorsement - ✔✔the endorsement that extends workers
comp and EL coverage to an additional organization named in the endorsement
✔✔6. Experience Rating Plan - ✔✔Rating plan that increases or reduces the premium
for a future period based on the insured's own loss experience for a period in the recent
past.
✔✔6. Retrospective Rating - ✔✔determines premium for a policy period based on the
insured's actual loss experience during that same policy period
✔✔6. assumption of risk rule - ✔✔the employee knew of the risk and voluntarily
exposed himself (1 of the defenses before wc)
, ✔✔6. contributory negligence doctrine - ✔✔employee failed to exercise reasonable care
for his own safety (1 of the defenses before wc)
✔✔6. fellow servant rule - ✔✔a fellow employee, who must be of same rank, was solely
negligent (1 of the defenses before wc)
✔✔6. employee - ✔✔a person under direct control of his employer who has the right to
tell the employee both what to do and how to do it
✔✔6. independent contractor - ✔✔a person not under direct control of his principal
✔✔6. temporary employee - ✔✔a person hired for a short-term assignment and is the
employee of the providing firm
✔✔6. leased employee - ✔✔a person hired for a long-term assignment and is the
employee of the providing firm for WC purposes
✔✔6. positional risk doctrine - ✔✔an injury would not have occurred if the conditions
and obligations of the employment had not put the claimant in the situation which he
was injured.
✔✔6. disability benefits - ✔✔compensate employees for lost wages
✔✔6. medical benefits - ✔✔cover all licensed medical care without any limit or
deductible
✔✔6. rehabilitation benefits - ✔✔pay for physical and vocational rehabilitation to get the
injured employee back to work
✔✔6. death benefits - ✔✔pay for both burial and income replacement in case of death
✔✔6. second injury fund - ✔✔is a state operated or state mandated fund that pays a
part of the WC benefits to injured employees whose injuries are made worse by prior
injuries
✔✔6. Workers compensation reciprocal agreement - ✔✔is an agreement between 2 or
more states to let the extraterritorial coverage of the home state policy meet another
states coverage requirement
✔✔6. Defense Base Act - ✔✔covers US employees who work on overseas military
bases or who work overseas under contracts with federal agencies
✔✔6. War Hazards Compensation Act - ✔✔covers civilians working in a war zone who
are injured by war-risk hazards
SOLUTIONS RATED A+
✔✔6. Temporary Partial Disability (TPD) - ✔✔a disability caused by a work related
injury or disease that temporarily limits the extent to which an employee can perform job
duties; the employee is eventually able to return to full duties and hours
✔✔6. Permanent Partial Disability (PPD) - ✔✔a disability caused by a work related
injury or disease that impairs the injured employee's earning capacity for life, but the
employee is able to work at reduced efficiency
✔✔6. State Fund - ✔✔a worker's compensation insurer that is set up by the state in
which it operates either as an agency of the state government or as a mutual or not-for-
profit insurer
✔✔6. Competitive state Fund - ✔✔a state fund that sells workers comp insurance in
competition with private insurers
✔✔6. Monopolistic State Fund (Exclusive state fund) - ✔✔a facility owned and operated
by a state government that provides workers comp insurance and that does not permit
any other insurers to sell workers comp insurance in that state
✔✔6. Self-insured group (pool or trust) - ✔✔a group of employers in the same industry
that jointly (as a whole) or severally (individually) guarantee payment of workers comp
benefits to the employees of the groups members. a not-for-profit association or
corporation is typically formed to which they pay premiums for self-insurance purposes.
✔✔6. Extraterritorial provision - ✔✔a provision of workers comp statute that extends
protection to an employee who is injured while temporarily working in a state other than
the state of hire.
✔✔6. Situs Test - ✔✔a test that a claimant must satisfy to be covered under the US
Longshore and Harbor Worker's Compensation Act; it requires that, at the time of injury,
the claimant must have been on navigable waters or on adjoining areas such as piers,
wharves, dry docks, terminals, buildingways, marine railways or other areas customarily
used in loading, unloading, repairing, dismantling or building vessels.
✔✔6. Status Test - ✔✔test that a claimant must satisfy to be covered under the US
Alongshore and Harbor Workers' Compensation Act. It requires that at the time of injury,
the claimant must have been engaged in maritime employment.
✔✔6. Workers Compensation Insurance - ✔✔Insurance that provides coverage for
benefits an employer is obligated to pay under workers comp laws
,✔✔6. Experience Modification Factor - ✔✔factor that tailors manual rates to an
insured's experience based on the insured's payroll and loss record of certain prior
years
✔✔6. Employers Liability insurance - ✔✔insurance that protects an employer against
employee injury claims that are not covered by workers comp laws
✔✔6. Other States Insurance - ✔✔Insurance that automatically extends coverage to the
insured's operations in any state listed in Item 3.C of the WC&EL information page
✔✔6. Voluntary Compensation and Employers Liability Coverage Endorsement -
✔✔End that amends the WC&EL policy to cover employees who are not subject to a
workers compensation statute
✔✔6. Foreign voluntary workers compensation coverage - ✔✔coverage that insures
employees who are working outside the US and who are not subject to a workers comp
law for benefits equal to those provided under either the workers comp statute of a
specified state or a specified federal compensation act
✔✔6. United States Longshore and harbor Worker's Compensation Act Endorsement -
✔✔Endorsement that amends the WC&EL policy to cover the insured's obligations
under the USLHWCA
✔✔6. Maritime Coverage Endorsement - ✔✔endorsement that amends the WC&ELl
policy to cover an employer's liability for injury or death of crew members
✔✔6. Waiver of Our Right to Recover From Others Endorsement - ✔✔the endorsement
in which a WC insurer agrees to not enforce its right of subrogation against any
organization listed in the endorsement's schedule
✔✔6. Alternate Employer Endorsement - ✔✔the endorsement that extends workers
comp and EL coverage to an additional organization named in the endorsement
✔✔6. Experience Rating Plan - ✔✔Rating plan that increases or reduces the premium
for a future period based on the insured's own loss experience for a period in the recent
past.
✔✔6. Retrospective Rating - ✔✔determines premium for a policy period based on the
insured's actual loss experience during that same policy period
✔✔6. assumption of risk rule - ✔✔the employee knew of the risk and voluntarily
exposed himself (1 of the defenses before wc)
, ✔✔6. contributory negligence doctrine - ✔✔employee failed to exercise reasonable care
for his own safety (1 of the defenses before wc)
✔✔6. fellow servant rule - ✔✔a fellow employee, who must be of same rank, was solely
negligent (1 of the defenses before wc)
✔✔6. employee - ✔✔a person under direct control of his employer who has the right to
tell the employee both what to do and how to do it
✔✔6. independent contractor - ✔✔a person not under direct control of his principal
✔✔6. temporary employee - ✔✔a person hired for a short-term assignment and is the
employee of the providing firm
✔✔6. leased employee - ✔✔a person hired for a long-term assignment and is the
employee of the providing firm for WC purposes
✔✔6. positional risk doctrine - ✔✔an injury would not have occurred if the conditions
and obligations of the employment had not put the claimant in the situation which he
was injured.
✔✔6. disability benefits - ✔✔compensate employees for lost wages
✔✔6. medical benefits - ✔✔cover all licensed medical care without any limit or
deductible
✔✔6. rehabilitation benefits - ✔✔pay for physical and vocational rehabilitation to get the
injured employee back to work
✔✔6. death benefits - ✔✔pay for both burial and income replacement in case of death
✔✔6. second injury fund - ✔✔is a state operated or state mandated fund that pays a
part of the WC benefits to injured employees whose injuries are made worse by prior
injuries
✔✔6. Workers compensation reciprocal agreement - ✔✔is an agreement between 2 or
more states to let the extraterritorial coverage of the home state policy meet another
states coverage requirement
✔✔6. Defense Base Act - ✔✔covers US employees who work on overseas military
bases or who work overseas under contracts with federal agencies
✔✔6. War Hazards Compensation Act - ✔✔covers civilians working in a war zone who
are injured by war-risk hazards
