AU 60 Missed Practice Test Questions EXAM
(TESTING REAL EXAM QUESTIONS) AND VERIFIED
ANSWERS (MULTIPLE CHOICES) |A+ GRADED |100%
CORRECT!!
When insuring a partnership, it is essential to identify which one of the following
on the policy declaration page?
Choose one answer.
A. The partnership
B. All partners
C. General partners only
D. All partners and their share of the partnership - (ANSWER)A. The partnership
If a company's inventory turnover ratio is higher than the industry benchmark, it
indicates that
Choose one answer.
A. Its inventory is becoming obsolete compared to that of its competitors.
B. The company is holding its inventory longer than its competitors.
,C. The company is selling its inventory more quickly than its competitors.
D. The company's inventory is generating higher costs than that of its
competitors. - (ANSWER)C. The company is selling its inventory more quickly than
its competitors.
Which one of the following is determined by a company's underwriting policy?
Choose one answer.
A. The underwriting authority the insurer grants its producers
B. Composition of the insurer's book of business
C. The market pursued by the insurer
D. The rating organization to which the insurer will belong - (ANSWER)B.
Composition of the insurer's book of business
Which one of the following statements is true regarding ratemaking in different
types of insurance?
Choose one answer.
,A. Most losses from catastrophic events, such as hurricanes, are included in
ratemaking data in the affected states.
B. Trending of losses in fire insurance is generally restricted to claim severity.
C. The experience period used for property causes of loss other than fire is usually
five years or less.
D. Applying loss development factors to data is critical when claims settle quickly
and loss reserves are relatively small. - (ANSWER)B. Trending of losses in fire
insurance is generally restricted to claim severity.
Which one of the following types of individual rating plans can be used by
medium to large insureds in combination with risk control and allows the insured
to manage its cash flow by avoiding upfront payments?
Choose one answer.
A. Schedule rating plan
B. Large deductible plan
C. Individual risk premium modification plan
D. Expense modification plan - (ANSWER)B. Large deductible plan
, An insurer must decide what provision for profit and contingencies should be
included in the rate and should consider the overall desired rate of return,
including likely returns from investment income versus
Choose one answer.
A. Policyholder surplus.
B. Underwriting profit.
C. Loss reserve amounts.
D. Loss adjustment expenses. - (ANSWER)B. Underwriting profit.
The amount included in the insurance rate to protect insurers against the
possibility that actual claims or expenses will exceed projections is referred to as
Choose one answer.
A. The prospective loss costs.
B. The expense factor.
C. The loading for profits and contingencies.
(TESTING REAL EXAM QUESTIONS) AND VERIFIED
ANSWERS (MULTIPLE CHOICES) |A+ GRADED |100%
CORRECT!!
When insuring a partnership, it is essential to identify which one of the following
on the policy declaration page?
Choose one answer.
A. The partnership
B. All partners
C. General partners only
D. All partners and their share of the partnership - (ANSWER)A. The partnership
If a company's inventory turnover ratio is higher than the industry benchmark, it
indicates that
Choose one answer.
A. Its inventory is becoming obsolete compared to that of its competitors.
B. The company is holding its inventory longer than its competitors.
,C. The company is selling its inventory more quickly than its competitors.
D. The company's inventory is generating higher costs than that of its
competitors. - (ANSWER)C. The company is selling its inventory more quickly than
its competitors.
Which one of the following is determined by a company's underwriting policy?
Choose one answer.
A. The underwriting authority the insurer grants its producers
B. Composition of the insurer's book of business
C. The market pursued by the insurer
D. The rating organization to which the insurer will belong - (ANSWER)B.
Composition of the insurer's book of business
Which one of the following statements is true regarding ratemaking in different
types of insurance?
Choose one answer.
,A. Most losses from catastrophic events, such as hurricanes, are included in
ratemaking data in the affected states.
B. Trending of losses in fire insurance is generally restricted to claim severity.
C. The experience period used for property causes of loss other than fire is usually
five years or less.
D. Applying loss development factors to data is critical when claims settle quickly
and loss reserves are relatively small. - (ANSWER)B. Trending of losses in fire
insurance is generally restricted to claim severity.
Which one of the following types of individual rating plans can be used by
medium to large insureds in combination with risk control and allows the insured
to manage its cash flow by avoiding upfront payments?
Choose one answer.
A. Schedule rating plan
B. Large deductible plan
C. Individual risk premium modification plan
D. Expense modification plan - (ANSWER)B. Large deductible plan
, An insurer must decide what provision for profit and contingencies should be
included in the rate and should consider the overall desired rate of return,
including likely returns from investment income versus
Choose one answer.
A. Policyholder surplus.
B. Underwriting profit.
C. Loss reserve amounts.
D. Loss adjustment expenses. - (ANSWER)B. Underwriting profit.
The amount included in the insurance rate to protect insurers against the
possibility that actual claims or expenses will exceed projections is referred to as
Choose one answer.
A. The prospective loss costs.
B. The expense factor.
C. The loading for profits and contingencies.
