ASLI 320 TEST PRACTICE QUESTIONS WITH VERIFIED ANSWERS
Correct 45
Incorrect 00
1 of 45
Term
Insurers are limited as to the amount of business they can accept by
state laws and regulations that specify
Give this one a try later!
The specific types of marketing The maximum number of employees
campaigns an insurer can run an insurer can hire in a given year
The minimal amount of
policyholders' surplus an insurer The interest rates an insurer must pay
must maintain relative to the on its policyholder surplus
amount of premiums it writes
Don't know?
, 2 of 45
Term
Fairway Insurance binds a policy on October 1, so that it is on their
books for one quarter of the year. If the policy premium is $1,000 and
the cost of acquisition (commission and underwriting expenses) is
$200, what amount can Fairway report on its year end income
statement under statutory accounting principles?
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$30 $50
$25 $75
Don't know?
3 of 45
Term
Which one of the following ratemaking data collection methods is the
least accurate?
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Accident-year Policy-year
, Calendar-year Loss-incurred Year
Don't know?
4 of 45
Term
Insurer Y is using the pure premium ratemaking method in estimating
expenses per exposure unit based on the insurer's past expenses.
Insurer Y knows that incurred losses are $4 million including loss
adjustment expenses of $500,000. All other expenses are $1.5 million.
The earned-car years used in the calculations are 100,000. The
expenses per exposure unit are
Give this one a try later!
Claim representatives must be
familiar with the bad-faith laws in
65
jurisdictions in which they handle
claims
$180,000 15
Don't know?
5 of 45
, Term
One of the responsibilities of underwriting management is to arrange
reinsurance. One type of reinsurance is arranged to automatically
reinsure a portion of all eligible risks of the primary insurer. This
arrangement is called
Give this one a try later!
Treaty reinsurance Excess reinsurance
Replacement cost reinsurance Quota-share treaty
Don't know?
6 of 45
Term
In determining A.M. Best's Financial Size Category (FSC) for an insurer,
adjusted surplus is calculated by modifying statutory surplus to
recognize the impact of statutory accounting practices on the
Give this one a try later!
Unearned premium reserves,
The total market value of the insurer's loss reserves, investment values,
stock portfolio and off-balance sheet
exposures
Correct 45
Incorrect 00
1 of 45
Term
Insurers are limited as to the amount of business they can accept by
state laws and regulations that specify
Give this one a try later!
The specific types of marketing The maximum number of employees
campaigns an insurer can run an insurer can hire in a given year
The minimal amount of
policyholders' surplus an insurer The interest rates an insurer must pay
must maintain relative to the on its policyholder surplus
amount of premiums it writes
Don't know?
, 2 of 45
Term
Fairway Insurance binds a policy on October 1, so that it is on their
books for one quarter of the year. If the policy premium is $1,000 and
the cost of acquisition (commission and underwriting expenses) is
$200, what amount can Fairway report on its year end income
statement under statutory accounting principles?
Give this one a try later!
$30 $50
$25 $75
Don't know?
3 of 45
Term
Which one of the following ratemaking data collection methods is the
least accurate?
Give this one a try later!
Accident-year Policy-year
, Calendar-year Loss-incurred Year
Don't know?
4 of 45
Term
Insurer Y is using the pure premium ratemaking method in estimating
expenses per exposure unit based on the insurer's past expenses.
Insurer Y knows that incurred losses are $4 million including loss
adjustment expenses of $500,000. All other expenses are $1.5 million.
The earned-car years used in the calculations are 100,000. The
expenses per exposure unit are
Give this one a try later!
Claim representatives must be
familiar with the bad-faith laws in
65
jurisdictions in which they handle
claims
$180,000 15
Don't know?
5 of 45
, Term
One of the responsibilities of underwriting management is to arrange
reinsurance. One type of reinsurance is arranged to automatically
reinsure a portion of all eligible risks of the primary insurer. This
arrangement is called
Give this one a try later!
Treaty reinsurance Excess reinsurance
Replacement cost reinsurance Quota-share treaty
Don't know?
6 of 45
Term
In determining A.M. Best's Financial Size Category (FSC) for an insurer,
adjusted surplus is calculated by modifying statutory surplus to
recognize the impact of statutory accounting practices on the
Give this one a try later!
Unearned premium reserves,
The total market value of the insurer's loss reserves, investment values,
stock portfolio and off-balance sheet
exposures
