AU60 Latest 2025 Practice Questions & Answers
TRUE/FALSE: Building or premises is one example of an ISO's Commercial Lines Manual (CLM)
classification - ✔✔TRUE
A book of business is a group of policies with common characteristics such as:
-_______
- type of ______
- policies written by a particular ______ or ______ - ✔✔-territory
-type of coverage
-insurer or agency
Policyholders surplus =
total ______ _____ - total ______ - ✔✔admitted assets - liabilities
Predictive modeling blends ______ ____ based on _______ and ______ to construct models of
anticipated future outcomes - ✔✔historical data based on behaviors and events
A catastrophe model estimates losses from _____ ______ catastrophic events. - ✔✔future
potential
The capacity an insurer is able to write is based on a comparison of the insurer's _____ _______
to its ________ ________ - ✔✔written premiums to policyholders' surplus
Underwriters ensure the adequacy of policyholders' surplus by:
- Identifying ____ ______
- Charging ______ ______
-Adhering to _______ ______ - ✔✔- Identifying loss exposures
,- Charging adequate premiums
- Adhering to underwriting guidelines
The commercial underwriting process determines which submissions will be accepted, and the
______, _____ , and _______ under which they are accepted - ✔✔amount (of insurance),
price, conditions
What is the first step of the commercial underwriting process? - ✔✔1. Evaluating the
application
During which step of the commercial underwriting process would an underwriter look to
understand the activities, operations and character of each applicant? - ✔✔1. Evaluating the
application
Sprinkler systems or fire alarms are examples of _____ ______ _____, often recommended
during which step of the underwriting process? - ✔✔Risk control measures, recommended
during step #2: developing underwriting alternatives
An underwriter would accept, reject or modify an application during which step of the
underwriting process? - ✔✔2. Develop underwriting alternatives
An underwriter may adjust the premium and amend policy terms and conditions during which
step of the underwriting process? - ✔✔step 2- Develop underwriting alternatives
After the developing underwriting alternatives step, an underwriter may choose to do what? -
✔✔3. Select underwriting alternatives
After selecting an underwriting alternative (if necessary), what is the next step in the
underwriting process? - ✔✔4. Determining an appropriate premium
,Underwriters make sure each loss exposure is accurately classified during which step of the
underwriting process? - ✔✔4. Determining an appropriate premium
After an underwriter has evaluated an application, made appropriate modifications, and
determined a premium, what is the next step in the underwriting process? - ✔✔5.
Implement the underwriting decision
Implementing an underwriting decision includes:
1. Communication decisions to ______
2. Issue _____ _____
3. Recording information about the _______ and _______ - ✔✔1. communicate to producer
2. Issue required documents
3. record info about applicant and policy
A temporary agreement providing insurance coverage until the formal policy is issued -
✔✔binder
What is the final step in the underwriting process? - ✔✔6. Monitor underwriting decision
Selecting insureds is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Ensuring accurate classification and pricing is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Recommending or providing coverage is typically the responsibility of a:
, A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Managing a book of business is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Supporting producers and insureds is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Formulating underwriting policy is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔B. Corporate Underwriter
Market research is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔B. Corporate Underwriter
Supporting marketing objectives is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Revising underwriting guidelines is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔B. Corporate Underwriter
TRUE/FALSE: Building or premises is one example of an ISO's Commercial Lines Manual (CLM)
classification - ✔✔TRUE
A book of business is a group of policies with common characteristics such as:
-_______
- type of ______
- policies written by a particular ______ or ______ - ✔✔-territory
-type of coverage
-insurer or agency
Policyholders surplus =
total ______ _____ - total ______ - ✔✔admitted assets - liabilities
Predictive modeling blends ______ ____ based on _______ and ______ to construct models of
anticipated future outcomes - ✔✔historical data based on behaviors and events
A catastrophe model estimates losses from _____ ______ catastrophic events. - ✔✔future
potential
The capacity an insurer is able to write is based on a comparison of the insurer's _____ _______
to its ________ ________ - ✔✔written premiums to policyholders' surplus
Underwriters ensure the adequacy of policyholders' surplus by:
- Identifying ____ ______
- Charging ______ ______
-Adhering to _______ ______ - ✔✔- Identifying loss exposures
,- Charging adequate premiums
- Adhering to underwriting guidelines
The commercial underwriting process determines which submissions will be accepted, and the
______, _____ , and _______ under which they are accepted - ✔✔amount (of insurance),
price, conditions
What is the first step of the commercial underwriting process? - ✔✔1. Evaluating the
application
During which step of the commercial underwriting process would an underwriter look to
understand the activities, operations and character of each applicant? - ✔✔1. Evaluating the
application
Sprinkler systems or fire alarms are examples of _____ ______ _____, often recommended
during which step of the underwriting process? - ✔✔Risk control measures, recommended
during step #2: developing underwriting alternatives
An underwriter would accept, reject or modify an application during which step of the
underwriting process? - ✔✔2. Develop underwriting alternatives
An underwriter may adjust the premium and amend policy terms and conditions during which
step of the underwriting process? - ✔✔step 2- Develop underwriting alternatives
After the developing underwriting alternatives step, an underwriter may choose to do what? -
✔✔3. Select underwriting alternatives
After selecting an underwriting alternative (if necessary), what is the next step in the
underwriting process? - ✔✔4. Determining an appropriate premium
,Underwriters make sure each loss exposure is accurately classified during which step of the
underwriting process? - ✔✔4. Determining an appropriate premium
After an underwriter has evaluated an application, made appropriate modifications, and
determined a premium, what is the next step in the underwriting process? - ✔✔5.
Implement the underwriting decision
Implementing an underwriting decision includes:
1. Communication decisions to ______
2. Issue _____ _____
3. Recording information about the _______ and _______ - ✔✔1. communicate to producer
2. Issue required documents
3. record info about applicant and policy
A temporary agreement providing insurance coverage until the formal policy is issued -
✔✔binder
What is the final step in the underwriting process? - ✔✔6. Monitor underwriting decision
Selecting insureds is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Ensuring accurate classification and pricing is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Recommending or providing coverage is typically the responsibility of a:
, A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Managing a book of business is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Supporting producers and insureds is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Formulating underwriting policy is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔B. Corporate Underwriter
Market research is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔B. Corporate Underwriter
Supporting marketing objectives is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔A. Field Underwriter
Revising underwriting guidelines is typically the responsibility of a:
A. Field Underwriter
B. Corporate Underwriter - ✔✔B. Corporate Underwriter
