1|Page
CIC INSURANCE COMPANY OPERATIONS EXAM AND
PRACTICE EXAM NEWEST 2025/ 2026 ACTUAL EXAM
COMPLETE 300 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+||LATEST EXAM!!!
why are premium audits important - ANSWER-since
premiums are estimated up front, premiums charged are
deposit premiums. after policy period expires, a company
must determine the actual exposure for an insured during
the time the policy was in force. this determination
requires a premium audit. the purpose of a premium audit
is to ascertain an actual exposure so the insurance
company can collect the premium developed by that
exposure
give justification for audits for medium and large accounts
- ANSWER-medium and large accounts may have multiple
classifications and exposure estimates. since these
exposures can fluctuate greatly during the policy year.
audits need to be completed to get proper premium based
on the actual exposure. also these accounts can add
services that require new classifications during the policy
term
how can these audits be carried out in a cost-effective way
- ANSWER-large insurers may have internal staff
dedicated to conducting premium audits. other insurers
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outsource premium Audit functions to a third-party audit
firm. some insurance companies require smaller insureds
to complete voluntary audits. an insured that uses a
payroll vendor may allow that vendor to report its payroll to
its insurer. some insurers waive the audit requirement for
small accounts
describe the reasons and tasks necessary for effective
software and hardware systems technology that can
handle different kinds of data interfaces within the
underwriting department and between other databases
such as that of a reinsurer - ANSWER--submission intake:
transaction process begins with the application data being
entered into policy mgmt system
-technology suite: often referred to as "upload/ download"
that provides direct transfer of submission data from
agency mgmt system into the carrier's system
-OFAC: insurers generally comply with OFAC
requirements be checking applicant info against OFAC
rules automatically in their systems
-clearance: to avoid providing multiple quotes policy mgmt
systems review apps when they are received to determine
whether they were previously submitted from another
producer
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-rating: the rating process involves collecting application
data and applying the rating rules for each product to
calculate price
-quoting: quoting capability is the means by which a
proposed product and premium are offered to a customer
-bind/ policy issuance: once a quote has been accepted,
policy management system delivers the supporting
documentation which may include a binder confirming
coverage and a policy which includes all of the details of
coverage
what are the 6 steps to the underwriting process in order
(IACPPF) - ANSWER-1. Initial Review
2. Additional Information Request
3. Coverage determination
4. Pricing
5. Policy Issuance
6. Follow-Up
applications from agents ______________ the only
resources needed to complete the underwriting process -
ANSWER-are not
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underwriters make the initial review of the insurance app
and supporting documents to determine the
_______________ of a submission - ANSWER-accuracy
discretionary pricing refers to the ability of an individual
underwriter to credit or debit an account or a portion of an
account based on
_______________________________________ -
ANSWER-the merits of the risk, program, or agency
segmentation
_______________________ allow policies to be delivered
electronically - ANSWER-certain regulators may not
match the type of business with the characteristics of
renewal underwriting for that type of business: Personal
lines and small commercial lines accounts - ANSWER--
are often referred to as commodity lines
-for these accounts, the renewal uw process is as
automated as possible
match the type of business with the characteristics of
renewal underwriting for that type of business: large
accounts - ANSWER--demands a more hands on
approach
CIC INSURANCE COMPANY OPERATIONS EXAM AND
PRACTICE EXAM NEWEST 2025/ 2026 ACTUAL EXAM
COMPLETE 300 QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+||LATEST EXAM!!!
why are premium audits important - ANSWER-since
premiums are estimated up front, premiums charged are
deposit premiums. after policy period expires, a company
must determine the actual exposure for an insured during
the time the policy was in force. this determination
requires a premium audit. the purpose of a premium audit
is to ascertain an actual exposure so the insurance
company can collect the premium developed by that
exposure
give justification for audits for medium and large accounts
- ANSWER-medium and large accounts may have multiple
classifications and exposure estimates. since these
exposures can fluctuate greatly during the policy year.
audits need to be completed to get proper premium based
on the actual exposure. also these accounts can add
services that require new classifications during the policy
term
how can these audits be carried out in a cost-effective way
- ANSWER-large insurers may have internal staff
dedicated to conducting premium audits. other insurers
,2|Page
outsource premium Audit functions to a third-party audit
firm. some insurance companies require smaller insureds
to complete voluntary audits. an insured that uses a
payroll vendor may allow that vendor to report its payroll to
its insurer. some insurers waive the audit requirement for
small accounts
describe the reasons and tasks necessary for effective
software and hardware systems technology that can
handle different kinds of data interfaces within the
underwriting department and between other databases
such as that of a reinsurer - ANSWER--submission intake:
transaction process begins with the application data being
entered into policy mgmt system
-technology suite: often referred to as "upload/ download"
that provides direct transfer of submission data from
agency mgmt system into the carrier's system
-OFAC: insurers generally comply with OFAC
requirements be checking applicant info against OFAC
rules automatically in their systems
-clearance: to avoid providing multiple quotes policy mgmt
systems review apps when they are received to determine
whether they were previously submitted from another
producer
,3|Page
-rating: the rating process involves collecting application
data and applying the rating rules for each product to
calculate price
-quoting: quoting capability is the means by which a
proposed product and premium are offered to a customer
-bind/ policy issuance: once a quote has been accepted,
policy management system delivers the supporting
documentation which may include a binder confirming
coverage and a policy which includes all of the details of
coverage
what are the 6 steps to the underwriting process in order
(IACPPF) - ANSWER-1. Initial Review
2. Additional Information Request
3. Coverage determination
4. Pricing
5. Policy Issuance
6. Follow-Up
applications from agents ______________ the only
resources needed to complete the underwriting process -
ANSWER-are not
, 4|Page
underwriters make the initial review of the insurance app
and supporting documents to determine the
_______________ of a submission - ANSWER-accuracy
discretionary pricing refers to the ability of an individual
underwriter to credit or debit an account or a portion of an
account based on
_______________________________________ -
ANSWER-the merits of the risk, program, or agency
segmentation
_______________________ allow policies to be delivered
electronically - ANSWER-certain regulators may not
match the type of business with the characteristics of
renewal underwriting for that type of business: Personal
lines and small commercial lines accounts - ANSWER--
are often referred to as commodity lines
-for these accounts, the renewal uw process is as
automated as possible
match the type of business with the characteristics of
renewal underwriting for that type of business: large
accounts - ANSWER--demands a more hands on
approach
