CPCU 520 Simulated Exam Questions and Correct Answers 2025/2026

CPCU 520 Simulated Exam Questions and Correct Answers 2025/2026 Which one of the following is a part of the solvency core principle of exiting the market and receivership? Select one: A. The reported financial results are assessed through the financial examination process and a determination is made of the insurer's compliance with legal requirements. B. The regulatory authority takes preventative and corrective measures to reduce the impact of risks identified during on-site regulatory monitoring. C. Insurers are required to maintain reserves and capital at all times and in such forms so as to provide an adequate margin of safety. D. Solvency is defined and a receivership scheme established to ensure the payment of insured obligations of insolvent insurers subject to appropriate restrictions and limitations. - Answer -D Benjamin has his home insured with Westfork Mutual under an HO-3 policy for $100,000. He is the named insured on the policy. There are three other residents of the home: Maria, Benjamin's mother; Daniel, his nephew; and Cian, a family friend. An accidental fire causes damage to the home and to personal property of all four occupants. Benjaminreports the loss to Westfork and Fatima, a claim representative, is assigned the claim. Which one of the following will most likely be Fatima's principal concern when analyzing coverage for the loss? Select one: A. Whether Maria's, Daniel's, and Cian's property would be covered B. Whether fire is a covered cause of loss under the H0-3 policy C. Whether the limit of insurance is sufficient to cover the damage D. Whether any policy exclusions preclude coverage for the loss - Answer -A Premium auditor Ralph became concerned about an increase in hazard from the insured's chemical operations. In an audit Ralph discovered the plant had added a product that could greatly increase the products liability exposure. Due to the misclassification of the current loss exposures, the information discovered by Ralph is most useful to which one of the following insurer functions?