AFSB 152 TEST 2026 ACTUAL EXAM PAPER
QUESTIONS WITH SOLUTIONS GRADED A+
◉ What accurately distinguishes facultative reinsurance from treaty
reinsurance?
Answer: Facultative reinsurance is typically used to reinsure
individual unusual or high hazard exposures that fall outside a
primary insurers standards guidelines.
◉ What action BEST reflects a producers primary responsibility
when recommending a credit line?
Answer: Recommending a credit line that aligns with each
contractors organization, experience, finances and market capacity
◉ What should be included in a producers formal credit evaluation
of a contractor?
Answer: 5 year financial trend
◉ Which of the following is primary home office underwriting
activity?
Answer: Formulating underwriting policy for field underwriters to
follow
,◉ Insurance services bonding program for a GC that is experiencing
rapid growth, is approaching the max financial capacity that west
form mutual can support, to best serve the GC the insurance carrier
should...
Answer: Arrange a backup surety with adequate capacity and ease
the transition before they reach the limit
◉ What can the surety producer on an account NOT do when it
comes to bond reporting?
Answer: They may not expand a credit line without underwriter
involvement
◉ Which of the following statements is true about a surety bond
producers market position?
Answer: A producer with market position of 25 percent or more of a
local market and a reputation for professional service is difficult to
displace
◉ What is not true about public official bonds?
Answer: The surety may not impose its own limitations on bond
conditions to manager potential losses
◉ What is the most notable characteristic that distinguishes public
official bonds from commercial surety bonds?
Answer: They cover faithful performance of duty and honesty.
,◉ What bond allows one to nullify the courts injunction?
Answer: Dissolve injunction bond
◉ Auto dealership is required by law to post a bond that allows
buyers to file a claim against surety if dealership fails to comply with
laws. What bond describes this requirement?
Answer: Compliance bonds with third party
◉ What best describes surety's payment obligation when a principal
defaults under a forfeiture bond?
Answer: The surety must pay the entire bond penalty, regardless of
the actual amount of loss incurred.
◉ A bookkeeper prepares all deposits, signs all company checks and
preforms the monthly bank account reconciliations. What is a
concern?
Answer: The person reconciling the bank statements should also not
be responsible for preparing deposits or singing checks.
◉ Michael Torres is a bond producer who is in the process of
completing a request for power of attorney with a surety. Which of
the following items must be included in the request?
, Answer: Proof of the producer's current professional liability
insurance coverage
◉ Under a standard letter of authority, which of the following bonds
requires surety approval before a producer can execute it?
Answer: Judicial bonds
◉ Under the Fair Credit Reporting Act, what is the maximum
number of years that information about paid tax liens may be
included in a consumer credit report?
Answer: 7 years
◉ What accurately applys from the Equal Credit Opportunity Act
(ECOA) and Regulation B?
Answer: They apply to all credit transactions, both commercial and
personal, regardless of the type of credit or creditor.
◉ The credit term '2/10 N 30' signifies that
Answer: a 2 percent discount applies if the balance is paid within 10
days; otherwise, full payment is due within 30 days.
◉ When a bank reports a 'floor plan loan' on a credit report,
Answer: the bank has financed the borrower's purchase of goods for
resale and secured the loan with a lien on those specific goods
QUESTIONS WITH SOLUTIONS GRADED A+
◉ What accurately distinguishes facultative reinsurance from treaty
reinsurance?
Answer: Facultative reinsurance is typically used to reinsure
individual unusual or high hazard exposures that fall outside a
primary insurers standards guidelines.
◉ What action BEST reflects a producers primary responsibility
when recommending a credit line?
Answer: Recommending a credit line that aligns with each
contractors organization, experience, finances and market capacity
◉ What should be included in a producers formal credit evaluation
of a contractor?
Answer: 5 year financial trend
◉ Which of the following is primary home office underwriting
activity?
Answer: Formulating underwriting policy for field underwriters to
follow
,◉ Insurance services bonding program for a GC that is experiencing
rapid growth, is approaching the max financial capacity that west
form mutual can support, to best serve the GC the insurance carrier
should...
Answer: Arrange a backup surety with adequate capacity and ease
the transition before they reach the limit
◉ What can the surety producer on an account NOT do when it
comes to bond reporting?
Answer: They may not expand a credit line without underwriter
involvement
◉ Which of the following statements is true about a surety bond
producers market position?
Answer: A producer with market position of 25 percent or more of a
local market and a reputation for professional service is difficult to
displace
◉ What is not true about public official bonds?
Answer: The surety may not impose its own limitations on bond
conditions to manager potential losses
◉ What is the most notable characteristic that distinguishes public
official bonds from commercial surety bonds?
Answer: They cover faithful performance of duty and honesty.
,◉ What bond allows one to nullify the courts injunction?
Answer: Dissolve injunction bond
◉ Auto dealership is required by law to post a bond that allows
buyers to file a claim against surety if dealership fails to comply with
laws. What bond describes this requirement?
Answer: Compliance bonds with third party
◉ What best describes surety's payment obligation when a principal
defaults under a forfeiture bond?
Answer: The surety must pay the entire bond penalty, regardless of
the actual amount of loss incurred.
◉ A bookkeeper prepares all deposits, signs all company checks and
preforms the monthly bank account reconciliations. What is a
concern?
Answer: The person reconciling the bank statements should also not
be responsible for preparing deposits or singing checks.
◉ Michael Torres is a bond producer who is in the process of
completing a request for power of attorney with a surety. Which of
the following items must be included in the request?
, Answer: Proof of the producer's current professional liability
insurance coverage
◉ Under a standard letter of authority, which of the following bonds
requires surety approval before a producer can execute it?
Answer: Judicial bonds
◉ Under the Fair Credit Reporting Act, what is the maximum
number of years that information about paid tax liens may be
included in a consumer credit report?
Answer: 7 years
◉ What accurately applys from the Equal Credit Opportunity Act
(ECOA) and Regulation B?
Answer: They apply to all credit transactions, both commercial and
personal, regardless of the type of credit or creditor.
◉ The credit term '2/10 N 30' signifies that
Answer: a 2 percent discount applies if the balance is paid within 10
days; otherwise, full payment is due within 30 days.
◉ When a bank reports a 'floor plan loan' on a credit report,
Answer: the bank has financed the borrower's purchase of goods for
resale and secured the loan with a lien on those specific goods
