ARM 400 SEGMENT C WITH ALL CORRECT & 100%
VERIFIED ANSWERS|UPDATED TO PASS
Which one of the following regulatory approaches provides an organization with more certainty and
greater predictability? ✔Correct answer-Rules-based
Which one of the following statements is true regarding Basel III? ✔Correct answer-Basel III was
developed to address both the risk of individual organizations and systemic risk in the banking sector.
Based on Basel III principles, which one of the following groups should take the lead in establishing a
strong risk management culture? ✔Correct answer-Board of directors
Which one of the following standards was developed in response to the financial crisis that began in
2007? ✔Correct answer-Basel III
All of the following are true regarding the Federal Sentencing Guidelines, EXCEPT: ✔Correct
answer-They are mandatory.
Examples of Principles-Based Regulations include all of the following, EXCEPT: ✔Correct answer-
Restaurant employees must wash their hands every time they use the restroom.
Which one of the following statements about standards—risk management, Solvency II, and Basel II
and III— is true? ✔Correct answer-Many risk management standards, such as ISO 31000, are
voluntary.
Solvency II is a new regulatory standard in the European Union (EU) to establish principles for risk
management and consistency in regulation for which one of the following industries? ✔Correct
answer-Insurance
The Chief Compliance Officer's responsibilities include all of the following, EXCEPT: ✔Correct
answer-Being the legal expert on employment laws
Claim representative Klee is reviewing an auto liability claim concerning a two-car collision that has
just been assigned to him. He discovers that the insured was clearly 100 percent at fault for the
accident and although nobody was injured, it is company policy for him to set a $500 reserve. Klee
sets the reserve and then calls the insured driver involved in the accident for a recorded statement.
During the conversation with the insured driver, Klee takes it upon himself to recommend a
company-approved collision center where the insured driver can have her vehicle repaired to pre-
accident condition. Klee's application of setting reserves and mentioning the collision repair center
would best represent which two compliance requirements in this case? ✔Correct answer-Internal
and voluntary
Tom is the Chief Underwriting Officer (CUO) of a large commercial insurance carrier and has been
tasked with updating the current compliance program. The internal audit results for the past few
years have been poor and highlight a need for immediate correction in certain functional areas.
Instead of modifying the current program, Tom decides to start from scratch and build a new,
ground-up program. What is a fundamental component Tom should be implementing to ensure his
company's compliance program is effective? ✔Correct answer-Use due diligence to prevent and
detect criminal behavior.
VERIFIED ANSWERS|UPDATED TO PASS
Which one of the following regulatory approaches provides an organization with more certainty and
greater predictability? ✔Correct answer-Rules-based
Which one of the following statements is true regarding Basel III? ✔Correct answer-Basel III was
developed to address both the risk of individual organizations and systemic risk in the banking sector.
Based on Basel III principles, which one of the following groups should take the lead in establishing a
strong risk management culture? ✔Correct answer-Board of directors
Which one of the following standards was developed in response to the financial crisis that began in
2007? ✔Correct answer-Basel III
All of the following are true regarding the Federal Sentencing Guidelines, EXCEPT: ✔Correct
answer-They are mandatory.
Examples of Principles-Based Regulations include all of the following, EXCEPT: ✔Correct answer-
Restaurant employees must wash their hands every time they use the restroom.
Which one of the following statements about standards—risk management, Solvency II, and Basel II
and III— is true? ✔Correct answer-Many risk management standards, such as ISO 31000, are
voluntary.
Solvency II is a new regulatory standard in the European Union (EU) to establish principles for risk
management and consistency in regulation for which one of the following industries? ✔Correct
answer-Insurance
The Chief Compliance Officer's responsibilities include all of the following, EXCEPT: ✔Correct
answer-Being the legal expert on employment laws
Claim representative Klee is reviewing an auto liability claim concerning a two-car collision that has
just been assigned to him. He discovers that the insured was clearly 100 percent at fault for the
accident and although nobody was injured, it is company policy for him to set a $500 reserve. Klee
sets the reserve and then calls the insured driver involved in the accident for a recorded statement.
During the conversation with the insured driver, Klee takes it upon himself to recommend a
company-approved collision center where the insured driver can have her vehicle repaired to pre-
accident condition. Klee's application of setting reserves and mentioning the collision repair center
would best represent which two compliance requirements in this case? ✔Correct answer-Internal
and voluntary
Tom is the Chief Underwriting Officer (CUO) of a large commercial insurance carrier and has been
tasked with updating the current compliance program. The internal audit results for the past few
years have been poor and highlight a need for immediate correction in certain functional areas.
Instead of modifying the current program, Tom decides to start from scratch and build a new,
ground-up program. What is a fundamental component Tom should be implementing to ensure his
company's compliance program is effective? ✔Correct answer-Use due diligence to prevent and
detect criminal behavior.
