AU 60 Chapter 1 Practice Questions And
Answers
Anpapplicantpforpcommercialppropertypinsurancepispfoundpunacceptablepbypanpunderwriterp
dueptopthepnaturepofpitspoperationspandpthepconstructionpofpthepbuildingpitpoccupies.pIfpthepa
pplicantpinstallspanpautomaticpfire-
extinguishingpsprinklerpsystem,pthepunderwriterpwillpapprovepthepapplication.pThisptypepofpu
nderwritingpmodificationpispknownpasp_____________?p-pCORRECTppANSWER-
Requiringplosspcontrolpmeasures.
Anpinsurerpdecidesptopusepitspresourcesptopincreasepthepvolumepofpaccountspinpanpareapthat
pofferspmoreppromisingpreturns.pThispneedptopredirectpthepfocuspforpdesiredpbusinesspispanp
examplepofpanpunderwritingpconstraintpdueptop______________?p-pCORRECTppANSWER-
Financialpcapacity.
Anpunderwriterpispworkingpwithpaplosspcontrolprepresentativeponpapnewpopportunity.pGivenpt
hepcomplexitypofpthepexposures,papphysicalpsurveypispconductedpbyptheplosspcontrolprepres
entative,pandpapformalpreportpispprepared.pThepreportprevealspthatpthepinsuredpownspsevera
lpunattendedpproperties,pandpthatptheypwerepunlockedpwhenptheplosspcontrolprepresentativ
epconductedpthepsurvey.pThispfailureptopproperlypsecurepanpunattendedpbuildingpwouldpbepa
npindicatorptopthepunderwriterpofpwhichptypepofphazard?p-pCORRECTppANSWER-Morale
Becausepunderwritingpguidelinespusuallypspecifypthepattributespofpaccountspthatpinsurerspa
repwillingptopinsure,pinsurerspconsiderpthemp____________?p-pCORRECTppANSWER-
Tradepsecrets.
Dependingponptheptypepofpinsurance,pinsurerspusepautomatedpunderwritingpsystemsptop___
____________.p-pCORRECTppANSWER-Encodepunderwritingpguidelines.
Duringpwhichpsteppinpthepunderwritingpprocesspwouldpanpunderwriterprequestpaplosspcontrol
pvisitptopapprospectiveppolicyholder'splocation?p-pCORRECTppANSWER-
Evaluatingpthepsubmission
Howpdopinsurer'spqualitypcontrolpcheckpforpuniformpapplicationpofpthepunderwritingpguidelin
espandpforpcontinuouspimprovement?p-pCORRECTppANSWER-Underwritingpaudits.
Namepaptaskpthatpispthepresponsibilitypofpapstaffpunderwriterpaspopposedptopaplinepunderwrit
er?p-pCORRECTppANSWER-Reviewpandprevisepratingpplans
Answers
Anpapplicantpforpcommercialppropertypinsurancepispfoundpunacceptablepbypanpunderwriterp
dueptopthepnaturepofpitspoperationspandpthepconstructionpofpthepbuildingpitpoccupies.pIfpthepa
pplicantpinstallspanpautomaticpfire-
extinguishingpsprinklerpsystem,pthepunderwriterpwillpapprovepthepapplication.pThisptypepofpu
nderwritingpmodificationpispknownpasp_____________?p-pCORRECTppANSWER-
Requiringplosspcontrolpmeasures.
Anpinsurerpdecidesptopusepitspresourcesptopincreasepthepvolumepofpaccountspinpanpareapthat
pofferspmoreppromisingpreturns.pThispneedptopredirectpthepfocuspforpdesiredpbusinesspispanp
examplepofpanpunderwritingpconstraintpdueptop______________?p-pCORRECTppANSWER-
Financialpcapacity.
Anpunderwriterpispworkingpwithpaplosspcontrolprepresentativeponpapnewpopportunity.pGivenpt
hepcomplexitypofpthepexposures,papphysicalpsurveypispconductedpbyptheplosspcontrolprepres
entative,pandpapformalpreportpispprepared.pThepreportprevealspthatpthepinsuredpownspsevera
lpunattendedpproperties,pandpthatptheypwerepunlockedpwhenptheplosspcontrolprepresentativ
epconductedpthepsurvey.pThispfailureptopproperlypsecurepanpunattendedpbuildingpwouldpbepa
npindicatorptopthepunderwriterpofpwhichptypepofphazard?p-pCORRECTppANSWER-Morale
Becausepunderwritingpguidelinespusuallypspecifypthepattributespofpaccountspthatpinsurerspa
repwillingptopinsure,pinsurerspconsiderpthemp____________?p-pCORRECTppANSWER-
Tradepsecrets.
Dependingponptheptypepofpinsurance,pinsurerspusepautomatedpunderwritingpsystemsptop___
____________.p-pCORRECTppANSWER-Encodepunderwritingpguidelines.
Duringpwhichpsteppinpthepunderwritingpprocesspwouldpanpunderwriterprequestpaplosspcontrol
pvisitptopapprospectiveppolicyholder'splocation?p-pCORRECTppANSWER-
Evaluatingpthepsubmission
Howpdopinsurer'spqualitypcontrolpcheckpforpuniformpapplicationpofpthepunderwritingpguidelin
espandpforpcontinuouspimprovement?p-pCORRECTppANSWER-Underwritingpaudits.
Namepaptaskpthatpispthepresponsibilitypofpapstaffpunderwriterpaspopposedptopaplinepunderwrit
er?p-pCORRECTppANSWER-Reviewpandprevisepratingpplans
