CPCU 553 - Test Questions with |\ |\ |\ |\ |\ |\
answers
Which one of the following statements is true regarding no-fault
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
automobile insurance? - CORRECT ANSWERS ✔✔No-fault laws |\ |\ |\ |\ |\ |\ |\
generally apply only to injuries and not to damage to property.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
A state's no-fault automobile insurance law permits an injured
|\ |\ |\ |\ |\ |\ |\ |\ |\
party who experiences permanent disfigurement to sue the
|\ |\ |\ |\ |\ |\ |\ |\
responsible party for noneconomic loss. This feature of the no- |\ |\ |\ |\ |\ |\ |\ |\ |\
fault law illustrates - CORRECT ANSWERS ✔✔This example
|\ |\ |\ |\ |\ |\ |\ |\
illustrates a verbal threshold. |\ |\ |\
automobile insurance plan - CORRECT ANSWERS ✔✔A plan for |\ |\ |\ |\ |\ |\ |\ |\ |\
insuring high-risk drivers in which all auto insurers doing business
|\ |\ |\ |\ |\ |\ |\ |\ |\
in the state are assigned their proportionate share of high-risk
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
drivers based on the total volume of automobile insurance
|\ |\ |\ |\ |\ |\ |\ |\ |\
written in a state is an automobile insurance plan.
|\ |\ |\ |\ |\ |\ |\ |\
state automobile insurance plans - CORRECT ANSWERS ✔✔To be
|\ |\ |\ |\ |\ |\ |\ |\ |\
eligible to obtain insurance from state automobile insurance
|\ |\ |\ |\ |\ |\ |\ |\
plans, applicants must show evidence that they have been
|\ |\ |\ |\ |\ |\ |\ |\ |\
denied auto liability insurance within a certain number of days.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Jon is a 17-year-old driver with six speeding tickets and an at-
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
fault accident. Jon has chosen insurance as his preferred method
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to meet the automobile financial responsibility law in his state.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Jon's application for insurance in the standard market was
|\ |\ |\ |\ |\ |\ |\ |\ |\
, declined. All of the following programs (if available in his state)
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
would help Jon secure auto insurance, - CORRECT ANSWERS ✔✔a
|\ |\ |\ |\ |\ |\ |\ |\ |\
reinsurance facility, an automobile insurance plan and a
|\ |\ |\ |\ |\ |\ |\ |\ |\
specialty insurance plan...NOT modified no-fault system
|\ |\ |\ |\ |\
Monetary threshold - CORRECT ANSWERS ✔✔A state's no-fault
|\ |\ |\ |\ |\ |\ |\ |\
automobile insurance law permits an injured party to sue the |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
responsible party for noneconomic loss if the victim's medical |\ |\ |\ |\ |\ |\ |\ |\ |\
and lost-wage expenses exceed $5,000. This feature of the no-
|\ |\ |\ |\ |\ |\ |\ |\ |\
fault law illustrates
|\ |\
ABC Auto Insurance (ABC) is one of two servicing insurers in a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
state with a joint underwriting association (JUA), servicing 50
|\ |\ |\ |\ |\ |\ |\ |\ |\
percent of the market. XYZ Auto Insurance (XYZ) is not a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
servicing insurer, but writes 25 percent of the voluntary auto
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
insurance in the state. What percentage of the JUA's underwriting
|\ |\ |\ |\ |\ |\ |\ |\ |\
losses and expenses is XYZ's responsibility? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔In states that offer a JUA, all auto insurers pay
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
underwriting losses and expenses in proportion to their share of |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the voluntary market. Answer 25%
|\ |\ |\ |\
joint underwriting associations (JUAs) - CORRECT ANSWERS ✔✔A
|\ |\ |\ |\ |\ |\ |\ |\
servicing insurer receives applications, issues policies, collects
|\ |\ |\ |\ |\ |\ |\
premiums and settles claims. All insurers in state in the state
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
accept their proportionate share of underwriting losses and
|\ |\ |\ |\ |\ |\ |\ |\
expenses.
In a state with a reinsurance facility for high-risk drivers, a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
private insurer that does not want to bear the risk of a high-risk
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
applicant may - CORRECT ANSWERS ✔✔Assign the premium and
|\ |\ |\ |\ |\ |\ |\ |\ |\
answers
Which one of the following statements is true regarding no-fault
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
automobile insurance? - CORRECT ANSWERS ✔✔No-fault laws |\ |\ |\ |\ |\ |\ |\
generally apply only to injuries and not to damage to property.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
A state's no-fault automobile insurance law permits an injured
|\ |\ |\ |\ |\ |\ |\ |\ |\
party who experiences permanent disfigurement to sue the
|\ |\ |\ |\ |\ |\ |\ |\
responsible party for noneconomic loss. This feature of the no- |\ |\ |\ |\ |\ |\ |\ |\ |\
fault law illustrates - CORRECT ANSWERS ✔✔This example
|\ |\ |\ |\ |\ |\ |\ |\
illustrates a verbal threshold. |\ |\ |\
automobile insurance plan - CORRECT ANSWERS ✔✔A plan for |\ |\ |\ |\ |\ |\ |\ |\ |\
insuring high-risk drivers in which all auto insurers doing business
|\ |\ |\ |\ |\ |\ |\ |\ |\
in the state are assigned their proportionate share of high-risk
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
drivers based on the total volume of automobile insurance
|\ |\ |\ |\ |\ |\ |\ |\ |\
written in a state is an automobile insurance plan.
|\ |\ |\ |\ |\ |\ |\ |\
state automobile insurance plans - CORRECT ANSWERS ✔✔To be
|\ |\ |\ |\ |\ |\ |\ |\ |\
eligible to obtain insurance from state automobile insurance
|\ |\ |\ |\ |\ |\ |\ |\
plans, applicants must show evidence that they have been
|\ |\ |\ |\ |\ |\ |\ |\ |\
denied auto liability insurance within a certain number of days.
|\ |\ |\ |\ |\ |\ |\ |\ |\
Jon is a 17-year-old driver with six speeding tickets and an at-
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
fault accident. Jon has chosen insurance as his preferred method
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to meet the automobile financial responsibility law in his state.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Jon's application for insurance in the standard market was
|\ |\ |\ |\ |\ |\ |\ |\ |\
, declined. All of the following programs (if available in his state)
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
would help Jon secure auto insurance, - CORRECT ANSWERS ✔✔a
|\ |\ |\ |\ |\ |\ |\ |\ |\
reinsurance facility, an automobile insurance plan and a
|\ |\ |\ |\ |\ |\ |\ |\ |\
specialty insurance plan...NOT modified no-fault system
|\ |\ |\ |\ |\
Monetary threshold - CORRECT ANSWERS ✔✔A state's no-fault
|\ |\ |\ |\ |\ |\ |\ |\
automobile insurance law permits an injured party to sue the |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
responsible party for noneconomic loss if the victim's medical |\ |\ |\ |\ |\ |\ |\ |\ |\
and lost-wage expenses exceed $5,000. This feature of the no-
|\ |\ |\ |\ |\ |\ |\ |\ |\
fault law illustrates
|\ |\
ABC Auto Insurance (ABC) is one of two servicing insurers in a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
state with a joint underwriting association (JUA), servicing 50
|\ |\ |\ |\ |\ |\ |\ |\ |\
percent of the market. XYZ Auto Insurance (XYZ) is not a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
servicing insurer, but writes 25 percent of the voluntary auto
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
insurance in the state. What percentage of the JUA's underwriting
|\ |\ |\ |\ |\ |\ |\ |\ |\
losses and expenses is XYZ's responsibility? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔In states that offer a JUA, all auto insurers pay
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
underwriting losses and expenses in proportion to their share of |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the voluntary market. Answer 25%
|\ |\ |\ |\
joint underwriting associations (JUAs) - CORRECT ANSWERS ✔✔A
|\ |\ |\ |\ |\ |\ |\ |\
servicing insurer receives applications, issues policies, collects
|\ |\ |\ |\ |\ |\ |\
premiums and settles claims. All insurers in state in the state
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
accept their proportionate share of underwriting losses and
|\ |\ |\ |\ |\ |\ |\ |\
expenses.
In a state with a reinsurance facility for high-risk drivers, a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
private insurer that does not want to bear the risk of a high-risk
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
applicant may - CORRECT ANSWERS ✔✔Assign the premium and
|\ |\ |\ |\ |\ |\ |\ |\ |\
