CPCU 540 Vocabulary Exam | Questions with
100% Correct Answers | Verified | Latest Update
2026/2027
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The primary financial statement prepared by insurers and required by every
state insurance department.
Choose an answer
1 Policyholders surplus 2 Loss ratio
3 NAIC Annual Statement 4 Reinsurer
Don't know?
Terms in this set (88)
, Policyholders surplus An insurer's assets minus its liabilities, which
represents its net worth.
Big data Sets of data that are too large to be gathered and
analyzed by traditional methods.
Good-faith claims handling The manner of handling claims that requires an
insurer to give consideration to the insured's
interests that is at least equal to the consideration it
gives its own interests.
Primary insurer In reinsurance, the insurer (also referred to as the
ceding company) that transfers or cedes all or part
of the insurance risk it has assumed to another
insurer in a contractual arrangement.
Reinsurer The insurer that assumes some or all of the
potential costs of insured loss exposures of the
primary insurer in an reinsurance contractual
agreement.
Ceding commission An amount paid by the reinsurer to the primary
insurer to cover part or all of the primary insurer's
policy acquisition expenses and other costs.
Large-line capacity An insurer's ability to provide larger amounts of
insurance for property loss exposures, or higher
limits of liability for liability loss exposures, than it is
otherwise willing to provide.
100% Correct Answers | Verified | Latest Update
2026/2027
Save
Practice questions for this set
Learn 1 /7 Study using Learn
The primary financial statement prepared by insurers and required by every
state insurance department.
Choose an answer
1 Policyholders surplus 2 Loss ratio
3 NAIC Annual Statement 4 Reinsurer
Don't know?
Terms in this set (88)
, Policyholders surplus An insurer's assets minus its liabilities, which
represents its net worth.
Big data Sets of data that are too large to be gathered and
analyzed by traditional methods.
Good-faith claims handling The manner of handling claims that requires an
insurer to give consideration to the insured's
interests that is at least equal to the consideration it
gives its own interests.
Primary insurer In reinsurance, the insurer (also referred to as the
ceding company) that transfers or cedes all or part
of the insurance risk it has assumed to another
insurer in a contractual arrangement.
Reinsurer The insurer that assumes some or all of the
potential costs of insured loss exposures of the
primary insurer in an reinsurance contractual
agreement.
Ceding commission An amount paid by the reinsurer to the primary
insurer to cover part or all of the primary insurer's
policy acquisition expenses and other costs.
Large-line capacity An insurer's ability to provide larger amounts of
insurance for property loss exposures, or higher
limits of liability for liability loss exposures, than it is
otherwise willing to provide.
