CPCU 520 Simulated Exam Questions with 100%
verified answers
Which one of the following statements is correct regarding rate
regulation?
Select one:
A. Rates should be high enough to pay all claims and expenses related to
those rates.
B. Rate regulation guarantees that insurance rates are adequate.
C. Insurers know when a policy is sold what their expenses for that
policy will be.
D. Insurers do not intentionally charge inadequate rates to retain market
share. - ANSWER -A
The source from which data was collected or derived, its timeliness or
historical value, and its independence from other data are all traits to
determine whether data is
Select one:
A. Reasonable.
B. Appropriate.
C. Comprehensive.
D. Adequate. - ANSWER -B
Angus, a claim representative for Premium Insurance Company, is
adjusting a liability claim where his insured, Josephine, lost control of
her brother Horace's car and caused $1,500 in damage to a grocery store.
Horace has auto coverage with Upland Insurance Company. Seeking to
determine whether other coverage applies, Angus refers to the Other
Insurance section of Josephine's Personal Auto Policy (PAP) and finds
that
, Select one:
A. Josephine's PAP is primary on non-owned vehicles.
B. Josephine's PAP provides no coverage on non-owned vehicles.
C. Josephine's PAP is excess over Horace's PAP.
D. Josephine's PAP and Horace's PAP will share the loss. - ANSWER -
C
Which one of the following insurance customers would fit in the middle
market group?
Select one:
A. A nail salon with six employees in a rented location
B. A family of five individuals that owns a house and two cars
C. A one-location furniture manufacturer with a risk manager on staff
D. A pharmaceutical company with manufacturing operations
throughout the United States and Canada - ANSWER -C
Risk control can assist premium auditing by
Select one:
A. Reporting the existence of new operations.
B. Designing product recall procedures.
C. Providing laboratory analyses.
D. Developing safety management programs. - ANSWER -A
Bill is an insurance producer for ABC Insurance Company (ABC). He
represents only ABC when marketing insurance products. ABC
compensates Bill primarily through salary, and he has no ownership
rights to policy expirations. Bill is a producer in the
Select one:
A. Captive agency marketing system.
B. Exclusive agency marketing system.
verified answers
Which one of the following statements is correct regarding rate
regulation?
Select one:
A. Rates should be high enough to pay all claims and expenses related to
those rates.
B. Rate regulation guarantees that insurance rates are adequate.
C. Insurers know when a policy is sold what their expenses for that
policy will be.
D. Insurers do not intentionally charge inadequate rates to retain market
share. - ANSWER -A
The source from which data was collected or derived, its timeliness or
historical value, and its independence from other data are all traits to
determine whether data is
Select one:
A. Reasonable.
B. Appropriate.
C. Comprehensive.
D. Adequate. - ANSWER -B
Angus, a claim representative for Premium Insurance Company, is
adjusting a liability claim where his insured, Josephine, lost control of
her brother Horace's car and caused $1,500 in damage to a grocery store.
Horace has auto coverage with Upland Insurance Company. Seeking to
determine whether other coverage applies, Angus refers to the Other
Insurance section of Josephine's Personal Auto Policy (PAP) and finds
that
, Select one:
A. Josephine's PAP is primary on non-owned vehicles.
B. Josephine's PAP provides no coverage on non-owned vehicles.
C. Josephine's PAP is excess over Horace's PAP.
D. Josephine's PAP and Horace's PAP will share the loss. - ANSWER -
C
Which one of the following insurance customers would fit in the middle
market group?
Select one:
A. A nail salon with six employees in a rented location
B. A family of five individuals that owns a house and two cars
C. A one-location furniture manufacturer with a risk manager on staff
D. A pharmaceutical company with manufacturing operations
throughout the United States and Canada - ANSWER -C
Risk control can assist premium auditing by
Select one:
A. Reporting the existence of new operations.
B. Designing product recall procedures.
C. Providing laboratory analyses.
D. Developing safety management programs. - ANSWER -A
Bill is an insurance producer for ABC Insurance Company (ABC). He
represents only ABC when marketing insurance products. ABC
compensates Bill primarily through salary, and he has no ownership
rights to policy expirations. Bill is a producer in the
Select one:
A. Captive agency marketing system.
B. Exclusive agency marketing system.
