AFSB 151 LATEST EXAM UPDATED QUESTIONS
AND ANSWERS SURE A+
✔✔Which one of these categories of court bonds is written primarily on the basis of an
attorney's character and reputation for trustworthiness? - ✔✔Fiduciary bonds
✔✔Producers of public official bonds serve themselves and their prospective principals
by - ✔✔Offering their services in September after primary elections are over and the
candidates are known.
✔✔Staff underwriting activities generally include which one of the following? -
✔✔Formulating underwriting policy
✔✔In the protective phase of the bond underwriting decision, indemnity is waived only
for what type of bonds? - ✔✔The smallest and least hazardous bonds
✔✔When a corporation has a number of subsidiaries that will all require bonds, what
type of agreement can be used that would allow the parent to provide indemnity for its
current subsidiaries and affiliates, as well as for companies it might acquire or form in
the future. - ✔✔Omnibus agreement
,✔✔An example of a common addendum that might address a principal's concern about
the conditions of a general agreement of indemnity (GAI) is - ✔✔Spousal exemption
✔✔Generally, what type of individuals cause most public official bond losses? -
✔✔Dishonest individuals
✔✔Courts often order attachment bonds to secure property when who is within the
court's jurisdiction? - ✔✔A nonresident defendant
✔✔Sureties underwrite both attachment and replevin bonds similarly, but they usually
write replevin bonds - ✔✔More quickly and for smaller amounts.
✔✔Which of the following bonds guarantee that buyers will pay farmers or other sellers
of goods? - ✔✔Merchandising and dealer bonds
✔✔Compliance bonds with third-party liability allow a direct right of action against which
party for damages a third party may suffer because of the principal's acts? - ✔✔Surety
✔✔Which special characteristic related to fidelity bonds most directly concerns the
following statement?
Many employers will not sign complaints or testify at criminal proceedings against their
employees. They often wish to avoid damaging publicity; accept employees' "hard luck"
stories; and wish to resolve matters quickly, especially when employees accused of
theft promise restitution or are valuable employees. - ✔✔Management might be
reluctant to prosecute employee thefts.
✔✔What quality of the contractor-producer-underwriter relationship requires periodic
visits to the contractor's office, visits to project sites with the contractor, and meetings
with the contractor's key people concerns? - ✔✔Ongoing dialogue
✔✔As part of the underwriting process, providing the surety with reliable and timely
financial information and informing the surety of the business plan is whose
responsibility? - ✔✔Contractor
✔✔Which one of the following in a bond applicant's personal and employment history
provides the surety underwriter with evidence of good character? - ✔✔Trade payment
record
✔✔Which of these is one of the three factors that are focused on the contractor and are
considered when underwriting contract bonds for construction? - ✔✔Capacity
, ✔✔In evaluating capacity for continuity planning, the underwriter considers what two
factors? - ✔✔Continuity of management and continuity of ownership
✔✔When monitoring the underwriting information of a contractor, an explanation is
generally needed if the underwriter notices the contractor's bid reflects a difference in
excess of what percent? - ✔✔10%
✔✔The underwriter must address the contract provisions for completing the work on
time. If the contractor does not complete the work on time, one of the standard solutions
is what? - ✔✔Liquidated damages
✔✔Under the Fair Credit Reporting Act, which one of the following indicates
circumstances under which a consumer reporting agency can legally furnish a
consumer credit report? - ✔✔As a response to a court order or a written request of the
consumer who is the subject of the report
✔✔Which one of the following includes sections of the Consumer Credit Protection Act
that apply directly to the surety industry? - ✔✔Titles VI and VII
✔✔Respectively, the credit terms ROI, slow 60, CIA, and COD mean - ✔✔Remit on
receipt of invoice, payment was received 60 days after the due date, cash payment is
required in advance, and cash is required on delivery.
✔✔Which one of the following statements is true regarding the surety underwriter's use
of information received from financial institutions? - ✔✔If the principal is highly
dependent on a financial institution as determined from the information, then the
conditions of the credit line are increasingly important to the surety.
✔✔Which one of the following statements is true regarding the principal as a source of
underwriting information for bonding? - ✔✔The principal is the primary source of direct
information, including identification, historical, management, financial, bank, and
performance information.
✔✔Under which heading of the Payment section of D&B's Business Information Report
(BIR) is there a summary of the company's payment history, including each vendor's
experience during the previous twelve months? - ✔✔Paying Record
✔✔One of Dun & Bradstreet, Inc.'s (D&B) primary sources of information for its
reporting database comes from which one of these sources? - ✔✔The surety principal
✔✔Which one of the following controls the information that consumer credit report
providers place in their files and how they place it? - ✔✔The Equal Credit Opportunity
Act and the Fair Credit Reporting Act.
AND ANSWERS SURE A+
✔✔Which one of these categories of court bonds is written primarily on the basis of an
attorney's character and reputation for trustworthiness? - ✔✔Fiduciary bonds
✔✔Producers of public official bonds serve themselves and their prospective principals
by - ✔✔Offering their services in September after primary elections are over and the
candidates are known.
✔✔Staff underwriting activities generally include which one of the following? -
✔✔Formulating underwriting policy
✔✔In the protective phase of the bond underwriting decision, indemnity is waived only
for what type of bonds? - ✔✔The smallest and least hazardous bonds
✔✔When a corporation has a number of subsidiaries that will all require bonds, what
type of agreement can be used that would allow the parent to provide indemnity for its
current subsidiaries and affiliates, as well as for companies it might acquire or form in
the future. - ✔✔Omnibus agreement
,✔✔An example of a common addendum that might address a principal's concern about
the conditions of a general agreement of indemnity (GAI) is - ✔✔Spousal exemption
✔✔Generally, what type of individuals cause most public official bond losses? -
✔✔Dishonest individuals
✔✔Courts often order attachment bonds to secure property when who is within the
court's jurisdiction? - ✔✔A nonresident defendant
✔✔Sureties underwrite both attachment and replevin bonds similarly, but they usually
write replevin bonds - ✔✔More quickly and for smaller amounts.
✔✔Which of the following bonds guarantee that buyers will pay farmers or other sellers
of goods? - ✔✔Merchandising and dealer bonds
✔✔Compliance bonds with third-party liability allow a direct right of action against which
party for damages a third party may suffer because of the principal's acts? - ✔✔Surety
✔✔Which special characteristic related to fidelity bonds most directly concerns the
following statement?
Many employers will not sign complaints or testify at criminal proceedings against their
employees. They often wish to avoid damaging publicity; accept employees' "hard luck"
stories; and wish to resolve matters quickly, especially when employees accused of
theft promise restitution or are valuable employees. - ✔✔Management might be
reluctant to prosecute employee thefts.
✔✔What quality of the contractor-producer-underwriter relationship requires periodic
visits to the contractor's office, visits to project sites with the contractor, and meetings
with the contractor's key people concerns? - ✔✔Ongoing dialogue
✔✔As part of the underwriting process, providing the surety with reliable and timely
financial information and informing the surety of the business plan is whose
responsibility? - ✔✔Contractor
✔✔Which one of the following in a bond applicant's personal and employment history
provides the surety underwriter with evidence of good character? - ✔✔Trade payment
record
✔✔Which of these is one of the three factors that are focused on the contractor and are
considered when underwriting contract bonds for construction? - ✔✔Capacity
, ✔✔In evaluating capacity for continuity planning, the underwriter considers what two
factors? - ✔✔Continuity of management and continuity of ownership
✔✔When monitoring the underwriting information of a contractor, an explanation is
generally needed if the underwriter notices the contractor's bid reflects a difference in
excess of what percent? - ✔✔10%
✔✔The underwriter must address the contract provisions for completing the work on
time. If the contractor does not complete the work on time, one of the standard solutions
is what? - ✔✔Liquidated damages
✔✔Under the Fair Credit Reporting Act, which one of the following indicates
circumstances under which a consumer reporting agency can legally furnish a
consumer credit report? - ✔✔As a response to a court order or a written request of the
consumer who is the subject of the report
✔✔Which one of the following includes sections of the Consumer Credit Protection Act
that apply directly to the surety industry? - ✔✔Titles VI and VII
✔✔Respectively, the credit terms ROI, slow 60, CIA, and COD mean - ✔✔Remit on
receipt of invoice, payment was received 60 days after the due date, cash payment is
required in advance, and cash is required on delivery.
✔✔Which one of the following statements is true regarding the surety underwriter's use
of information received from financial institutions? - ✔✔If the principal is highly
dependent on a financial institution as determined from the information, then the
conditions of the credit line are increasingly important to the surety.
✔✔Which one of the following statements is true regarding the principal as a source of
underwriting information for bonding? - ✔✔The principal is the primary source of direct
information, including identification, historical, management, financial, bank, and
performance information.
✔✔Under which heading of the Payment section of D&B's Business Information Report
(BIR) is there a summary of the company's payment history, including each vendor's
experience during the previous twelve months? - ✔✔Paying Record
✔✔One of Dun & Bradstreet, Inc.'s (D&B) primary sources of information for its
reporting database comes from which one of these sources? - ✔✔The surety principal
✔✔Which one of the following controls the information that consumer credit report
providers place in their files and how they place it? - ✔✔The Equal Credit Opportunity
Act and the Fair Credit Reporting Act.
