AFSB 153 Sample Exam 2023 with 100% correct answers

The surety relationship includes all of the following parties, EXCEPT: a. Surety b. Fiduciary c. Obligee d. Principal - correct answer b. Fiduciary All of the following are recognized bond terms, EXCEPT: a. Noncancelable (open term) b. Definite term c. Continuous term d. Revolving term - correct answer d. Revolving term In addition to assisting bond applicants to complete applications and indemnity agreements, some surety producers a. Investigate commercial surety bond losses. b. Design commercial surety bond forms. c. Have underwriting authority to execute bonds. d. Investigate applicants' credit reports, financial statements, and loss experience. - correct answer c. Have underwriting authority to execute bonds A surety would use an indemnity agreement rather than a bond application when a. The underwriter is concerned that the surety faces a greater-than-average risk of loss. b. Several subsidiaries of a corporation require a number of bonds. c. A producer with power of attorney and underwriting authority executes a bond. d. The surety reuqires signed indmenity agreements for all bonds. - correct answer b. Several subsidiaries of a corporation require a number of bonds. An underwriter determines the surety's ability to cancel a bond and the period of subsequent liability by a. Reviewing the bond form