AU 60 - Assignment 3 - Underwriting
Information Questions with Complete
Solutions
B. Motor vehicle reports on drivers Laura is reviewing a commercial auto application for
a company that owns a large fleet of local delivery trucks. Which one of the following pieces of
underwriting information would be desirable, but not essential?
A. Three years of loss experience
B. Motor vehicle reports on drivers
C. List of vehicles to be insured
D. Coverage limits and deductibles
C. Application Which one of the following should provide an underwriter with most of
the essential information needed to arrive at a decision on a new business applicant?
A. Loss history
B. Physical inspection
C. Application
,D. Web site
C. Best's Underwriting Guide Vincent has been a commercial lines underwriter for less
than one year. He has received a new business application for Mellfor Manufacturing (Mellfor).
Vincent is not familiar with the manufacturing process used by Mellfor and would like to order a
physical inspection. Which one of the following would provide Vincent with general information
about the manufacturing process and might avoid the need for a physical inspection?
A. Dun & Bradstreet report
B. Insurer's underwriting guidelines
C. Best's Underwriting Guide
D. Predictive analytics
Front-line underwriter A producer performing account selection before submitting the
account to the insurer.
Application A legal document that provides information obtained directly from an
applicant requesting insurance and that an insurer can use for underwriting and claim handling
purposes.
,Loss history A listing of past claims, including the date of occurrence, the line of
business, the type or description of the claim, the date of the claim, the amount paid, the amount
reserved, and the claim's current status.
Experience rating plan A 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.
Loss frequency The number of losses that occur within a specified period.
Loss severity The amount of loss, typically measured in dollars, for a loss that has
occurred.
Frequency The underwriter also examines loss frequency and loss severity. Although both
are important, ____ is usually a better indicator of future loss experience.
B. Insurance department fines All of the following are consequences to an applicant who
provides false information on an insurance application, EXCEPT:
A. Criminal penalties
, B. Insurance department fines
C. Civil penalties
A. The application. Because underwriters must gather and process information efficiently,
they should make the best possible use of the information immediately available. The two
sources of information that are available as soon as the underwriter receives a submission are the
producer and
A. The application.
B. The insured.
C. Risk control reports.
D. Motor vehicle reports (MVRs).
B. The producer For obtaining information regarding an account, upon which one of the
following do underwriters most rely?
A. The applicant
B. The producer
C. The claim representative
Information Questions with Complete
Solutions
B. Motor vehicle reports on drivers Laura is reviewing a commercial auto application for
a company that owns a large fleet of local delivery trucks. Which one of the following pieces of
underwriting information would be desirable, but not essential?
A. Three years of loss experience
B. Motor vehicle reports on drivers
C. List of vehicles to be insured
D. Coverage limits and deductibles
C. Application Which one of the following should provide an underwriter with most of
the essential information needed to arrive at a decision on a new business applicant?
A. Loss history
B. Physical inspection
C. Application
,D. Web site
C. Best's Underwriting Guide Vincent has been a commercial lines underwriter for less
than one year. He has received a new business application for Mellfor Manufacturing (Mellfor).
Vincent is not familiar with the manufacturing process used by Mellfor and would like to order a
physical inspection. Which one of the following would provide Vincent with general information
about the manufacturing process and might avoid the need for a physical inspection?
A. Dun & Bradstreet report
B. Insurer's underwriting guidelines
C. Best's Underwriting Guide
D. Predictive analytics
Front-line underwriter A producer performing account selection before submitting the
account to the insurer.
Application A legal document that provides information obtained directly from an
applicant requesting insurance and that an insurer can use for underwriting and claim handling
purposes.
,Loss history A listing of past claims, including the date of occurrence, the line of
business, the type or description of the claim, the date of the claim, the amount paid, the amount
reserved, and the claim's current status.
Experience rating plan A 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.
Loss frequency The number of losses that occur within a specified period.
Loss severity The amount of loss, typically measured in dollars, for a loss that has
occurred.
Frequency The underwriter also examines loss frequency and loss severity. Although both
are important, ____ is usually a better indicator of future loss experience.
B. Insurance department fines All of the following are consequences to an applicant who
provides false information on an insurance application, EXCEPT:
A. Criminal penalties
, B. Insurance department fines
C. Civil penalties
A. The application. Because underwriters must gather and process information efficiently,
they should make the best possible use of the information immediately available. The two
sources of information that are available as soon as the underwriter receives a submission are the
producer and
A. The application.
B. The insured.
C. Risk control reports.
D. Motor vehicle reports (MVRs).
B. The producer For obtaining information regarding an account, upon which one of the
following do underwriters most rely?
A. The applicant
B. The producer
C. The claim representative
